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#323155 - 02/28/05 02:51 PM HELOCs and Debit Cards
upstateNY Offline
Platinum Poster
Joined: Apr 2003
Posts: 933
New York State
Somewhere in the back of my mind I remember that we are prohibited from allowing access to a home equity line of credit via a debit card in NYS. Does anyone have any recollection of this, or can point me in the right direction? Thanks

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#323156 - 02/28/05 08:31 PM Re: HELOCs and Debit Cards
PatrickG Offline
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PatrickG
Joined: Jun 2001
Posts: 165
Binghamton, NY, USA
I recall it also from an NYBA seminar that Grace (now I can't remember her last name) put on. There was a Banking Dept. letter about it in the handouts. My file is in Binghamton and I am in Utica this week. Maybe someone else who was at the seminar can help sooner.

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#323157 - 02/28/05 08:34 PM Re: HELOCs and Debit Cards
upstateNY Offline
Platinum Poster
Joined: Apr 2003
Posts: 933
New York State
Thanks, that would be Grace Sterrett. I have sent an e-mail to her. She's great. At least I know that I didn't dream this up - maybe.....

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#323158 - 02/28/05 08:36 PM Re: HELOCs and Debit Cards
PatrickG Offline
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PatrickG
Joined: Jun 2001
Posts: 165
Binghamton, NY, USA
She is the best! I wish I would stop forgetting her last name. But, when I say "Grace", everyone knows who I am talking about.

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#323159 - 03/01/05 04:45 AM Re: HELOCs and Debit Cards
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,755
Galveston, TX
First off - not related specifically to New York - is that it would not be a "debit" card - it would be a "credit" card.

Second - I believe that VISA and Mastercard both prohibit issuers from issuing their debit cards when they are directly tied to a credit account - you may want to review their rules. I don't have a copy, so sorry, I am unable to give you a citation. This has been discussed previous in some of the other threads.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#323160 - 03/09/05 02:52 PM Re: HELOCs and Debit Cards
Jim Offline
100 Club
Joined: May 2004
Posts: 127
New York State
We are looking into using a Mastercard credit card to access their HELOC. I would appreciate knowing what you hear from Grace

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#323161 - 03/09/05 05:19 PM Re: HELOCs and Debit Cards
PatrickG Offline
100 Club
PatrickG
Joined: Jun 2001
Posts: 165
Binghamton, NY, USA
There is a 1991 NYSBD letter covering the use of credit and debit cards to access home equity lines. The letter restated the prohibiton of issuing a credit card secured by real property and the policy concerns raised by issuing a debit card to access a home equity line. The NYS Legislature, when it created the authority for debit cards, made it clear that it did not want debit cards used as "disguised" credit cards by use of a zero balance checking account tied to a debit card. The implication being that using a debit card to access a Home Equity Line of Credit utilizes the zero balance checking account method not allowed by NY.

The Banking Department letter applies only to credit or debit cards issued in New York.

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#323162 - 03/10/05 03:16 PM Re: HELOCs and Debit Cards
Jim Offline
100 Club
Joined: May 2004
Posts: 127
New York State
I checked further with the NYSBD and they indicated you cannot use a credit card to access a HELOC. They feel the credit card is secured by real estate and that violates section 413.12a of the Personal Property Law.

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