Skip to content
BOL Conferences
Thread Options
#958755 - 05/14/08 01:37 PM Reg Z - Credit Card Offset & Auto Payments
Last Mango Offline
Gold Star
Joined: Mar 2001
Posts: 293
Too Far From the Beach
226.12(d)(1) prohibits a bank from using an offset of deposit accounts before or after termination of card privileges. However, (d)(3) does not prohibit a plan from “periodically” deducting all or part of the debt from a deposit account if the customer agrees to the plan in writing, subject to the restrictions in (d)(1). Someone has informed me that if our bank has an automatic payment plan, we can offset a deposit account.

Question: Even if we set up a card plan with automatic deductions, we would still be subject to the prohibition of offset in (d)(1), right?
_________________________
If you keep living straight from the heart, you will know when to stop and to start.

Return to Top
Lending Compliance
#959035 - 05/14/08 05:04 PM Re: Reg Z - Credit Card Offset & Auto Payments Last Mango
Andy_Z Offline
10K Club
Andy_Z
Joined: Oct 2000
Posts: 27,746
On the Net
That is my understanding, yes.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top
#959062 - 05/14/08 05:34 PM Re: Reg Z - Credit Card Offset & Auto Payments Andy_Z
Dan Persfull Online
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,482
Bloomington, IN
I agree. If you notice section (d)(3) says you are still subject to the restrictions of (d)(1).

Having an automatic payment plan is not the same as having a security interest in the deposit account.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

Return to Top
#959091 - 05/14/08 06:11 PM Re: Reg Z - Credit Card Offset & Auto Payments Dan Persfull
Last Mango Offline
Gold Star
Joined: Mar 2001
Posts: 293
Too Far From the Beach
Thank you for your assistance! It is a good day when both Andy and Dan agree with my opinion.
_________________________
If you keep living straight from the heart, you will know when to stop and to start.

Return to Top
#959395 - 05/15/08 12:27 PM Re: Reg Z - Credit Card Offset & Auto Payments Last Mango
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,170
Toano, VA
FWIW, I agree, too. The offset prohibition deals with unforeseen events that are not required by the contract, whereas, the EFTs are required.
Last edited by Richard Insley; 05/15/08 12:27 PM.
_________________________
...gone fishing.

Return to Top

Moderator:  Andy_Z