Compliance Question of the Week

If a credit offers a debit card that is tied to an HSA account, is that covered under Reg E?

Actually no. From the definitions section of Reg E, an account does not include an account held by a financial institution under a bona fide trust agreement. The official staff commentary explains further that an account held under a custodial agreement that qualifies as a trust under the Internal Revenue Code, such as an individual retirement account, is considered to be held under a trust agreement for the purposes of Regulation E.

Health savings accounts (HSAs) are held as a trust under the Internal Revenue Code.

This is not to say that a credit union cannot provide Reg E coverage on debit cards that are tied to HSA accounts. Credit unions may choose to exceed the requirements provided for by the regulation.

Related Links

12 CFR 205.2 (b)(3)
Reg E Official Commentary

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News.