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#568781 - 06/16/06 04:37 PM
Senior Checking
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100 Club
Joined: Jan 2004
Posts: 164
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Is there anything that I have to worry about in offering a senior checking account? Do I have to offer it ONLY to those over 62, or 65, or can I call it something nicer and offer it to those 50 and over (don't want to offend anyone). That being said, if we do offer an account like that are we discriminating against those younger than our age requirement of the account????
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#568782 - 06/16/06 04:56 PM
Re: Senior Checking
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Diamond Poster
Joined: Oct 2005
Posts: 1,562
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You can make the age anyhting you want. The only thing you can not do is offer any type of favorable loan offering to them, unless they are 62+.
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#568783 - 06/16/06 09:44 PM
Re: Senior Checking
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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Fellow Red Sox Fan:
Just be cautious if you offer either overdraft protection or a true overdraft line of credit connected to those senior accounts and to other accounts offered by your institution.
If your seniors get preferred pricing on their deposit accounts that's not available to people less than your qualifying age for the senior group, that can be interpreted by regulators (and it's been done) as providing an account with credit features at a preferred price to persons based on age. Age is a prohibited criterion for discrimination unless your qualifying age is 62 ("elderly" in Regulation B).
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
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#568784 - 06/16/06 10:02 PM
Re: Senior Checking
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Member
Joined: Jan 2005
Posts: 77
Reading on the riverbank
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Quote:
Fellow Red Sox Fan:
Just be cautious if you offer either overdraft protection or a true overdraft line of credit connected to those senior accounts and to other accounts offered by your institution.
If your seniors get preferred pricing on their deposit accounts that's not available to people less than your qualifying age for the senior group, that can be interpreted by regulators (and it's been done) as providing an account with credit features at a preferred price to persons based on age. Age is a prohibited criterion for discrimination unless your qualifying age is 62 ("elderly" in Regulation B).
John--are you referring to discrimination pertaining only to overdraft protection plans because of the loan feature they have? I have been told by numerous compliance regulators and have it in writing (somewhere!) that, for some reason known only to those who write compliance regulations, it is not considered discriminatory to favor seniors with something not available to those younger. That it is only discriminatory if you offer something favorable to a younger population that wouldn't be available to those of us who are seniors. Just thought I'd ask--you know--stir the waters a little!  
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#568785 - 06/16/06 10:26 PM
Re: Senior Checking
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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The problem is that those "numerous compliance regulators" didn't explain or didn't make it clear that it's only OK to favor seniors in credit matters if your definition of seniors is persons who have attained the estimable age of 62. And, of course, you can refuse to extend credit to those who aren't old enough yet to enter into a binding contract. Otherwise, you can't discriminate based on age.
Take a look at this comment to paragraph 202.6(b)(2):
Paragraph 6(b)(2)
1. Favoring the elderly. Any system of evaluating creditworthiness may favor a credit applicant who is age 62 or older. A credit program that offers more favorable credit terms to applicants age 62 or older is also permissible; a program that offers more favorable credit terms to applicants at an age lower than 62 is permissible only if it meets the special-purpose credit requirements of § 202.8.
Last edited by John Burnett; 06/16/06 10:28 PM.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
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#568786 - 06/19/06 08:54 PM
Re: Senior Checking
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Power Poster
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
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We made the mistake of including a $100 discount towards closing costs for mortgages through our affiliate in our 50+ package. That benefit is no longer available!
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Life without Jesus is like an unsharpened pencil - it has no point.
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#568787 - 06/19/06 09:00 PM
Re: Senior Checking
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Member
Joined: Jun 2006
Posts: 72
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We still have a closing fee discount of $250 offered to 50+ accounts but it has been removed also....
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#568788 - 06/20/06 08:34 PM
Re: Senior Checking
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Member
Joined: Jan 2005
Posts: 77
Reading on the riverbank
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Quote:
The problem is that those "numerous compliance regulators" didn't explain or didn't make it clear that it's only OK to favor seniors in credit matters if your definition of seniors is persons who have attained the estimable age of 62. And, of course, you can refuse to extend credit to those who aren't old enough yet to enter into a binding contract. Otherwise, you can't discriminate based on age.
Take a look at this comment to paragraph 202.6(b)(2):
Paragraph 6(b)(2)
1. Favoring the elderly. Any system of evaluating creditworthiness may favor a credit applicant who is age 62 or older. A credit program that offers more favorable credit terms to applicants age 62 or older is also permissible; a program that offers more favorable credit terms to applicants at an age lower than 62 is permissible only if it meets the special-purpose credit requirements of § 202.8.
Thanks, John. Appreciate the clarification. Their explanation has always puzzled me.
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#568789 - 06/22/06 01:53 PM
Re: Senior Checking
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Gold Star
Joined: Nov 2005
Posts: 265
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Quote:
Fellow Red Sox Fan:
Just be cautious if you offer either overdraft protection or a true overdraft line of credit connected to those senior accounts and to other accounts offered by your institution.
If your seniors get preferred pricing on their deposit accounts that's not available to people less than your qualifying age for the senior group, that can be interpreted by regulators (and it's been done) as providing an account with credit features at a preferred price to persons based on age. Age is a prohibited criterion for discrimination unless your qualifying age is 62 ("elderly" in Regulation B).
John,
What would you consider preferred pricing, in terms of a deposit accounts? Would such incentives as no minimum balance,free services (i.e. travelers/cashiers checks, etc.), or no penalty or higher interest rate CD be considered "pricing?" Thanks.
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#568790 - 06/22/06 02:57 PM
Re: Senior Checking
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Gold Star
Joined: Nov 2005
Posts: 265
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#568791 - 06/23/06 04:50 PM
Re: Senior Checking
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100 Club
Joined: Jul 2005
Posts: 191
Kentucky
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I'm confused. Is it allowable to offer special checking accounts to consumers 50+ as long as there is no credit involved (ODP, etc)? But that if there is some form of credit extended either via ODP or a bounce program, that it only then violates the Reg?
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The above is my opinion, and is frequently valued at USD 2¢ or less.
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#568792 - 06/23/06 06:13 PM
Re: Senior Checking
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Diamond Poster
Joined: Jun 2004
Posts: 1,115
Where the wind comes sweeping ...
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BB - You've got it. Other things that could cause an ECOA violation are loan discounts. If you do want to offer ODP or a loan discount, the minimum account holder age must be 62.
I have no idea why 62...
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#568793 - 06/23/06 06:59 PM
Re: Senior Checking
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Power Poster
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
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It is my understanding that it is OK to offer the ODP bounce protection on the senior account as long as you offer it to customers in other accounts as well. If that is not correct, I really need to know!
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Life without Jesus is like an unsharpened pencil - it has no point.
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#568794 - 06/23/06 07:06 PM
Re: Senior Checking
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Junior Member
Joined: Feb 2006
Posts: 26
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So, to offer ODP on an account with age restrictions, the age must be 62 or older? We curretnly have ODP available on all accounts, however not advertised, including 3 accounts for 50 yrs and over. Do I have a major problem?
Thank you.
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#568795 - 06/23/06 08:37 PM
Re: Senior Checking
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100 Club
Joined: Jul 2005
Posts: 191
Kentucky
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BrendaC: John's response indicates that if the accounts have ODP and they also have preferred pricing on the deposit account itself, it can be interpreted to be in violation. (Since the account has credit features by virtue of having ODP)  So, if you offer reduced-fee checking, and that checking account has ODP, then the age limit has to be 62 or above, or you could be found to be in violation. I'm surprised that the AARP hasn't jumped on this to get the age lowered. IIRC their membership age starts at 50.
_________________________
The above is my opinion, and is frequently valued at USD 2¢ or less.
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#568797 - 06/24/06 12:47 AM
Re: Senior Checking
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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If it's a pricing incentive, yes, you have a problem. Because an account with a credit feature is being provided to the senior group at a discount not available to non seniors. But if the qualification for your senior discount is attainment of elderly (age 62) status, you're OK.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
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#568798 - 06/26/06 01:59 PM
Re: Senior Checking
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Gold Star
Joined: Nov 2005
Posts: 265
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John,
I am still not sure as to what would be considered a pricing incentive. Are things such as free travelers checks, etc., minimum deposits, free checks considered pricing? We offer different packages with our different accounts and if these things are considered pricing we have a problem b/c our age limit for some of the accounts is 50+. Thanks.
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#568799 - 06/26/06 06:43 PM
Re: Senior Checking
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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If the account itself is available at a preferential cost (service charges, maintenance fees) and customers who don't qualify using your age criterion cannot get the same pricing benefit in other ways, but you provide a credit feature (such as an OD line of credit or an ODP program) on all account types, you may have a problem. The FDIC is the agency that is, apparently, the prime mover on this issue. But I'd suggest you discuss the particulars of your bank's account offerings with your lead examiner to get his or her recommendations.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8
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#749051 - 06/07/07 07:40 PM
Re: Senior Checking
Sugarbaker
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Platinum Poster
Joined: Apr 2002
Posts: 597
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Would it be discrimination if we offer Prime 50 a higher ODP limit? We would also offer higher ODP limit on one other type of checking acct.
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"If you only laugh and enjoy life when your problems are all solved, you'll never enjoy life."
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#749068 - 06/07/07 07:49 PM
Re: Senior Checking
Lu
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Power Poster
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
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Wouldn't that be a favorable loan offering to someone under 62?
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Life without Jesus is like an unsharpened pencil - it has no point.
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#749250 - 06/07/07 10:50 PM
Re: Senior Checking
BrendaC
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10K Club
Joined: Jul 2001
Posts: 83,350
Galveston, TX
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ODP is credit under the ECOA and the practice of offering higher limits at a 50-year cut-off is going to cause you grief.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#750480 - 06/11/07 03:06 PM
Re: Senior Checking
rlcarey
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Platinum Poster
Joined: Apr 2002
Posts: 597
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Would it still be a problem if the higher ODP limit was also available through another checking product (Preferred Checking)?
Thank you so much for your help.
_________________________
"If you only laugh and enjoy life when your problems are all solved, you'll never enjoy life."
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#751513 - 06/12/07 04:44 PM
Re: Senior Checking
Lu
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Platinum Poster
Joined: Apr 2002
Posts: 597
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Ken, John or anyone that knows,
We want to offer higher ODP limit to senior ckg (50 & over) but also to the Prefered ckg accounts (no age limit).
Would this still be an age discrimination problem even though a customer can get the same benefit by another means?
_________________________
"If you only laugh and enjoy life when your problems are all solved, you'll never enjoy life."
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#751571 - 06/12/07 05:47 PM
Re: Senior Checking
Lu
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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We offer higher based on class of account. One of those higher limit accounts is senior rewards...like your's it also applies to a couple/few other accounts as well...we have received no grief since it's not just to the senior (under 62) account.
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My opinion only. Not legal advice.
Say you'll haunt me - Stone Sour
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