Out With the ATM Card, In With the Debit Card

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Question:

Our bank is considering converting the ATM cards connected to the checking accounts of current customers into Visa debit/check cards. Would this be considered a substitution or renewal of a solicited card or must we follow the rules for an unsolicited card?

Answer:

If one card replaces the other and no additional deposit accounts will be accessed through this, I would consider it a substitution of a solicited issuance under 205.5(a).

Keep in mind that you will now have different disclosures to provide. Your current disclosure probably tells the consumer they will have a $50 liability in the event of some unauthorized transfers. You will need to amend that language to reflect the zero liability rules Visa has, as that will now be your contractual obligation.

First published on BankersOnline.com 11/01/04