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#2154954 - 11/27/17 10:26 PM using a credit card to make a loan payment
JacksTigger Offline
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JacksTigger
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lost in compliance land
I'm trying to find where it states that a financial institution can't allow a borrower to make a loan payment via a credit card. (Besides the whole issue of just transferring debt from one thing to another). I thought it was in Truth in Lending, but I'm not finding anything there.

I have found in the Visa Core Rules where it state that you could accept a Visa Debit Card for a loan payment, but not a Visa credit card. I have not been able to find the same language in the MasterCard rules. Am I missing it or remembering something that really wasn't there, but just a good practice.

Appreciate any help
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#2155095 - 11/28/17 06:38 PM Re: using a credit card to make a loan payment JacksTigger
JacksTigger Offline
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JacksTigger
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lost in compliance land
anyone????
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#2155159 - 11/28/17 08:16 PM Re: using a credit card to make a loan payment JacksTigger
BrianC Online
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The citations may be a little out of date, but the rules haven't changed in the last 5 years.
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#2155168 - 11/28/17 08:31 PM Re: using a credit card to make a loan payment JacksTigger
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Knee Deep in Regs
You will find in the MC and Visa Rules not in Reg Z.

5.11.5 Existing Mastercard Cardholder Obligations
A Merchant must not submit to its Acquirer, and a Customer must not submit to the
Interchange System, any Transaction that:
1. Represents the refinancing or transfer of an existing Mastercard Cardholder obligation
that is deemed to be uncollectible; or
2. Arises from the dishonor of a Mastercard Cardholder’s personal check.
A Merchant may submit a Transaction identified with MCC 6051 (Quasi-Cash—Merchant) for
the payment of an existing Cardholder obligation owed to the Merchant.
NOTE: Modifications to this Rule appear in the “Europe Region” and “United States Region”
chapters.
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#2155186 - 11/28/17 09:35 PM Re: using a credit card to make a loan payment JacksTigger
JacksTigger Offline
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JacksTigger
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lost in compliance land
Thanks I knew you guys could help me. I missed it in the MasterCard rules.

But I need to question-- this would be for a normal scheduled loan payment--not for uncollectible debt. It appears that MasterCard states you can't use the credit card for uncollectible debt, but possiblely could for regular loan payments??

I want to get all my ducks in a row and be able to counter any arguments.

Thanks
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#2155192 - 11/28/17 09:59 PM Re: using a credit card to make a loan payment JacksTigger
BrianC Online
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You read Mastercard correctly. However, does your institution have a license to process payments in this way with the correct merchant category codes (6051) and pay the correct interchange fees or do the powers that be think they will be processing cash advances?
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#2173384 - 04/13/18 02:28 PM Re: using a credit card to make a loan payment BrianC
JoAnne Offline
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Brian,

What do you mean by "does you institution have a license to process payments in this way" - License with whom?
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#2173385 - 04/13/18 02:35 PM Re: using a credit card to make a loan payment JacksTigger
rlcarey Online
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Mastercard
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