Would an UTMA (I'm from Ohio, OTMA) savings account be covered by Regulation E for Debit Card disputes. Thanks!

If the account is considered a bona fide trust agreement under Ohio law, it would not be covered by Regulation E. Otherwise, the bona fide trust agreement exception would not apply.

John,

I'm not sure that State law might be the qualifier. The IRS treats UTMA and UGMA as trust accounts.


Reg. E commentary:

2. Custodial agreements. 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 purposes of Regulation E.

The questions in my mind is why is there a debit card issued on the UTMA account? Depending on who possesses the debit card, this could violate State law provisions and the recordkeeping requirements and most likely also violates the bank's agreement with the card issuer as I don't think issuing cards on a custodian or trust account is authorized in the standard card issuing agreements.

Good call, Randy, on the IRS issue. I'll agree, on that basis, that an UTMA (or OTMA, as Ozzie calls it), would not be subject to Regulation E.