We have an electronic checking product that pays interest only if a debit card is used 10 times or more. We have been told that it may be a violation of RegDD. Our FDIC rep said there was a product that someone "sells" that had been "blessed" by the regulators. Do you know what that product is, who "sells" it and/or what it's characteristics are?

I think we may have this type of product, and there is a company that sells it, but we did ours in-house, and have been thru an exam with no problems whatsoever. Ours is based on several factors: must accept e-statements and have a valid e-mail address, must use debit card 10 time or more per month, must have a direct deposit. Our customer really seem to like it, especially since we pay a much higher rate of interest on the account than other types of accounts.

At WaMu, my checking account gets no interest but I get 3 cents per each debit card transaction. My debit card use is high - 50+ times a month, so that far outweighs any interest I'd receive at current market rates.

Do you pay any interest if the debit card is not used 10 times?

There are no penalties of any sort.

On ours, no, we do not pay interest if the card is not used 10 times. However, there are no penalties (service charges) either.

We are considering a reward program for debit card use...similar to credit card reward programs. The user will earn points based on dollar amount of transactions. The user can accumulate and then redeem the points for merchandise. The bank "pays" for the points (with a vendor that sells the merchandise) as the points are earned.

Any compliance issues?

So is this really interest? Or just a reward feature?

Well, it is coded as interest. They just fail to receive it if they don't do their 10 debit transactions in a cycle, because they failed to meet the terms of the account.