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#716616 - 04/16/07 11:26 AM a bonus?
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 530
Midwest
Our account terms state that we reserve the right to require 7 days advance notice of withdrawal for all accounts. Does this suffice to get us around all bonus issues? We still include the bonus disclosures required under Reg DD, however we do require a minimum deposit and closing fee if closed within 6 months. For some time now, our defense has been that our account rules allow us to require these and not get us into hot water. Thoughts on this?

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#716625 - 04/16/07 12:08 PM Re: a bonus? M&M
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Are any of your checking accounts held by persons (such as for-profit businesses) who are not eligible for NOW or ATS accounts? If so, your reservation of right to receive notice of withdrawal won't buy you any cover from the challenges of Regulation Q.
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#716845 - 04/16/07 05:18 PM Re: a bonus? John Burnett
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 530
Midwest
I don't believe so. We perform Reg Q monitoring to move/change non-eligible accounts monthly.

Those aside, no concerns with this practice?

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#716922 - 04/16/07 06:59 PM Re: a bonus? M&M
MN Banker Offline
Platinum Poster
Joined: Aug 2006
Posts: 980
Originally Posted By: M&M
we reserve the right to require 7 days advance notice of withdrawal for all accounts.


So, are you saying that you essentially don't have any demand deposit accounts?

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#717419 - 04/17/07 05:06 PM Re: a bonus? MN Banker
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 530
Midwest
I believe that is the intent, i.e. an alternate door, if you will.

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#717507 - 04/17/07 06:36 PM Re: a bonus? M&M
MN Banker Offline
Platinum Poster
Joined: Aug 2006
Posts: 980
In that case you could still have a problem. I'm assuming here, but basically your checking accounts would be considered NOW accounts. Certain types of businesses aren't eligible to hold NOW accounts such as for profit businesses, LLCs, etc.

Even if you don't regularly pay interest on these accounts, the bonuses you're describing would be considered interest under reg Q, and could not be paid on accounts held by these types of entities.

Hopefully a guru will correct me if I'm wrong!

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