HELOC Overdraft Protection

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Question:

We would like to allow overdraft protection through a home equity line of credit, but want to make sure that any debit card does not become a credit card through this process. Can you point me to some specific guidance on this?

Answer:

First, make sure it a allowed under state law. For instance, this would not be legal in Texas. You can refer to Regulation E 12 CFR 205.12, which clearly indicates that Reg E governs transactions under the circumstances that you describe.

First published on BankersOnline.com 12/03/07