A credit card tied to a checking account: If the checking account is overdrawn, the amount overdrawn will be covered by a transfer in $50 increments from the credit card. The credit card limit is NOT made available for authorizing transactions that would be in excess of the consumer's own funds in the checking account. There is no access device associated with the checking account that can access the credit card limit directly. If an unauthorized transaction hits the checking account, that transaction overdraws the account and $50 is transferred from the credit card to the checking account, then Reg E rules apply to the unauthorized transaction (we are assuming it is an EFT) and since the consumer will not want to pay the $50 charged to their credit card, the Reg Z rules at 1026.13(d)(right to withhold disputed amount; prohibited collection action, adverse credit reports, etc.) and (g)(creditor's rights and duties after resolution) apply. Correct?

An overdraft service as defined at 1005.17 (not a line of credit under Reg Z or a sweep from another account): Transaction in error would only be handled under Reg E, correct?

Thanks in advance.

Regulation E:

1005.12(a) Relation to Truth in Lending. (1) The Electronic Fund Transfer Act and this part govern:

(ii) The issuance of an access device (other than an access device for a prepaid account) that permits credit extensions (under a preexisting agreement between a consumer and a financial institution) only when the consumer’s account is overdrawn or to maintain a specified minimum balance in the consumer’s account, or under an overdraft service, as defined in § 1005.17(a) of this part;