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#2254411 - 05/25/21 08:57 PM Debit Card Access to HELOC
Jen J Offline
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Joined: Dec 2015
Posts: 131
Yes, we're looking at adding debit card access directly to our HELOCs. One of my points of resistance was that this card would not fit the definition of "debit" under the MasterCard rules, which say, " 'Debit' includes any consumer signature debit, stored value, prepaid, payroll, electronic benefit transfer, and deferred debit Card of Program. 'Debit' does not include any Card or Program that accesses, debits, holds, or settles funds from the user's demand deposit or asset account fourteen or more days after the date of the purchase. 'Credit Card' means a card or other device that may be used to defer payment of debt or incur debt and defer its payment."

I received this response from our core provider and am feeling pretty squishy about it (especially because of their last comment):

MasterCard removed all their rules in 2020 (so you can really hook up a savings or HELOC account now to a debit card)

MasterCard’s prohibition on Debit Card linkage to a HELOC account is no longer effective. Accordingly, each customer (FI / Issuer) may determine whether to tie HELOCs to Credit or Debit, or both. Of course, the customer (FI / Issuer) must determine that its decision is in accordance with applicable Federal and State laws.

If we [core provider] create a BIN extension, the FI can hook up a HELOC account. MasterCard will still consider the entire BIN as a DEBIT bin, which is fine. If the FI wants this BIN to be a credit card bin, they would need a brand new BIN. [Core provider] sees most institutions just use the debit BIN and tie either a checking or savings account to the card.

Anyone able to call their bluff on this? I have a copy of the MasterCard Rules from December 2020. To be fair, I don't see any direct prohibition on tying a debit card to a deferred payment account other than in the definitions I quoted above. Have there been new rules issued in 2021? Am I over-interpreting the definitions? I also don't know why most institutions would tie a checking or savings account to the card (as they stated above) if it is totally fine to connect it to a HELOC.

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#2254412 - 05/25/21 09:21 PM Re: Debit Card Access to HELOC Jen J
BrianC Offline
Power Poster
Joined: Nov 2004
Posts: 6,011
Calling it a "debit card" or "credit card" under Mastercard rules really only impacts what Mastercard program you are offering, what set of interchange fees you will be paid, and what set of processing and licensing fees you will pay.

It's a credit card for the purposes of Regulation Z regardless of what Mastercard calls it.
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!

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