Q: Would a credit card meet the definition of debit card under Regulation II if the credit line is secured by a deposit held in an account at the issuer in the individual cardholder's name, but the funds in the account are not accessible by the cardholder nor used to repay the card balances unless the cardholder defaults on the credit?
A: No. For the card to be deemed a debit card, the "account" referred to in comment 2(f).4.ii (see Q1 above) does not refer to an account that holds a security deposit that is inaccessible to the cardholder unless and until the cardholder defaults on card obligations. (Added May 18, 2015).
This Q&A was obtained from FRB’s website, in a section for Regulation II (Debit Card Interchange Fees and Routing) Frequently Asked Questions, which may be found here: