We offer a secured visa credit card that requires a hold on a savings account for the credit line amount. The problem is that occasionally the owner of a savings account with a secured visa will exceed the limits for Reg D to a point that closing the account would be required. Obviously we don't want to close the account.

I am trying to brainstorm all the necessary things we need to say in the various letters, disclosures, agreements so that we can keep the savings account open but restrict it so that the customer can no longer make any limited withdrawals or transfers from the account before it reaches the 3rd instance of excess transaction in a rolling 12 months and so that we don't have to close it.

All our excess transaction notifications state that if the limits continue to be exceeded that we will remove transfer and withdrawal capabilities on the account. This is also in our EFT disclosures and a standalone transaction limitation disclosure given on commercial MMDA and Savings accounts. The agreement for the secured visa card speaks about the hold on the savings account and that a separate assignment of deposit is executed but it does not touch on transaction limits for savings accounts.

Is this sufficient for disclosure of the consequences? Are we within our rights to remove transfer and withdrawal capabilities for limited transactions with only what we have disclosed up front and with the Reg D notifications?

Most banks that take and require a savings account as collateral for a card do not allow the customer any access to the account. It only exists for the amount of security required and for the duration of the card account. It is the limitation language not in the depositor's agreement that you give when they open the savings account. If so, you can impose the transfer limits any time that you wish.