Freebies, Bonuses and Contests


Presented by John Burnett and Andy Zavoina

Regulation Q has been gone for over two years, but should it be forgotten? Have all the old limits on premiums for checking accounts disappeared, or do you still need to watch out for them? Have NOW accounts been eliminated? If not, can you offer them to businesses? Regulation Q's demise hasn't affected IRS reporting requirements at all, so you still need to know when you're paying interest and when your payments will be reportable in a different way.

In today's economy customers need a banking relationship, but what will attract them to open a new account at your bank? How do you get their attention? Your Marketing Department will have several suggestions and Compliance needs to know how to make those ideas work to get the new customers while staying out of trouble with regulators. Should you consider a contest or a drawing? Perhaps a new account bonus will sweeten the deal? Maybe a sweepstakes or lottery will entice them? Are the rules different for an employee-only raffle that is used to build excitement and sales?

As the pressure to attract new customers intensifies, bankers are often tempted to try new sales techniques to capture market share. Should your bank be on Facebook, or Twitter? It is easy to get on these social networking sites; however the legal and regulatory limits that are put on sales efforts can be tedious and confusing. Those limits apply to what you do with customers, and may apply to what you do with employees to promote different programs. What can and can't you do on these sites, and what controls need to be in place to keep everyone happy?

Consider this scenario: To attract new customers to a newly opened branch, Marketing has proposed to pay higher interest rates on new money for one year. The offer will be the published rate plus 50 basis points. For a limited time a $100 bonus will be paid for direct deposits. A promotion will temporarily erase any transaction penalties and unlimited withdrawals will be allowed, and every new account will be entered into a drawing for a fabulous vacation trip. For the first time the bank will also advertise on Facebook and Twitter to get the word out and to get feedback from new customers. They'll be like testimonials.

Compliance has to outline what will be required to ensure this campaign is made legal. Marketing believes designing the campaign features was the hard part and compliance is just following a checklist. We know it is more than just a checklist, but let's start there. You will have to address Reg. DD disclosures, IRS reporting, and serious work on what could otherwise be an illegal lottery. You've been here, or you could be. You have to know how to handle this situation, and Marketing needs to understand the basic rules so that as a team, you can successfully bring in the customers needed to make this branch thrive from its opening day.

Attend this BOL Learning Connect webinar to find out about:
  • What happened to the Reg Q definitions of "interest"
  • Knowing what you're selling - is it a DDA or a NOW account?
  • When limits may still apply to the payment of bonuses
  • How advertising rules affect your bonus offerings
  • Reporting interest and bonuses to the IRS
  • Bonus requirements under Reg. DD
  • How state and federal rules affect promotional sweepstakes and other contests
  • How far your bank can go with lotteries
  • How you should address incentive programs for employees
  • The pros and cons of being on Facebook, Twitter and other social networking sites.

    The rules are complex. If you're going to use promotions to attract and retain customers, you'll want to be sure to attend this webinar. You can't get away with just anything someone dreams up. Your advertisements are viewed daily by customers, lawyers, your competition, and even regulators. Your advertisements on the Web can live on forever. This program is designed for anyone involved in the planning, execution, and review of contests, sweepstakes, bonuses and other incentive programs.

    Find out how to help your marketing department craft campaigns that accomplish their goals without violating the rules.

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    • Complete presentation (including slides and audio)
    • Written Materials
    • Follow-up Q & A
    You have the right under this license agreement for this CD-ROM to use this presentation on a single-workstation. Use on a network is in violation of the copyright agreements. CD may be used by multiple users at a given institution but may not be placed on a network or in any other multi-user environment.

  • About the Speakers:

    John Burnett is a 1979 alumnus of the ABA National Compliance School, and served on its faculty for several years. He graduated with honors with the Class of 1990 from ABA's Stonier Graduate School of Banking. He is also a graduate of the BAI's and the Massachusetts Banker Association's Schools of Banking.

    He joined Cape Cod Bank and Trust Company in 1971 and assumed his role as Compliance Officer in 1976. He also served as corporate secretary and secretary of CCBT's Board of Directors, as well as Clerk of the bank's holding company. John joined Glia Group, Inc., and became a part of the BOL Team in June, 2004.

    Mr. Burnett is a former member chair of the Massachusetts Bankers Association Legal and Regulatory Compliance Committee, and of the American Bankers Association Compliance Executive Committee and NCS/NGCS Advisory Board. He served on ABA's Truth in Savings Task Force, and has served on several ABA and Massachusetts Bankers seminar panels.

    Mr. Andy Zavoina, CRCM, is an Executive Vice President with the Glia Group, best known for its involvement with

    Mr. Zavoina has been in finance and banking for 23 years. Over 20 years were with a holding company with two Central Texas community banks that had $534 million in assets, 89 branches spanning Texas and nearly 500 ATMs. After starting in loan workouts, Mr. Zavoina has been a consumer, commercial and real estate lender and managed those departments as well as being the banks first Webmaster. He was responsible for compliance- management, -auditing, and -training for both banks.

    Mr. Zavoina is a past Chairman of the American Bankers Association's Compliance Executive Committee. He was the 2003 recipient of the American Bankers Association's Distinguished Service Award for his involvement and accomplishments in the field of regulatory compliance management. He was chairman of the Editorial Advisory Board for the ABA's Compliance Magazine, Compliance Action magazine, was a member of the ABA's Compliance School Board and is a BankersOnline Guru. He also served on the Texas Bankers Association's Compliance Committee.

    He is a graduate of the ABA National Commercial Lending School, National Compliance and National Graduate Compliance School and is a Certified Regulatory Compliance Manager with the Institute of Certified Bankers. He has written numerous articles and lectured on compliance, the use of the Internet and technology as a tool, as well as compliance in cyberspace to local, state and national associations. Internet policies and other compliance related programs are made available on his personal Web site.

    This program was recorded in its entirety in December 2014. The CD-ROM includes program slides, materials (if available) and follow-up Q & A document.

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    This product was added to our catalog on Sunday 11 September, 2005.

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