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Business Debit Cards Linked to Personal Accounts

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Question: 
We are starting a business debit card program. While working on our disclosures we have come across something we're not sure how to address: business customers who request to have personal accounts linked to their business debit cards. Is this a permissible practice, and what are some liabilities facing us in such a situation?
Answer: 

Permissible? Probably, but that turns the card into one that is subject to Reg E when it's used in connection with the personal account. Having a card with transactions that are sometimes subject to Reg E and sometimes not could present some significant operational and compliance challenges. There's also a concern that using a card to bridge a business account and a personal account might be considered a poor business practice, since conventional audit trails would be broken. Finally, check with your MasterCard or Visa card representative. You may have a contractual issue with the card association. One thing that comes to mind is the associations' zero liability policies, which are different for business and personal cards.

First published on BankersOnline.com 3/10/08

First published on 03/10/2008

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