Overdraft Protection linked to a HELOC


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  • #16181

    If we offer an option of linking a customer’s checking account to their home equity line of credit where the checking account when overdrawn will automatically pull from the HELOC, and the fee for the transfer is disclosed in the HELOC early program disclosure, are there any other disclosures needed, or implications, any other term to disclose?

    Want to double check since the open end line of credit would be secured by the borrower’s residence rather than unsecured.


    One thing to consider, if a Visa or Mastercard debit card is attached to the checking account, you need to review your Visa/Mastercard agreement. If a Visa/Mastercard debit card purchase/advance caused the overdraft that pulls from the line of credit, make sure your BIN number allows for this type of transaction.

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