Are there limits or reporting requirements on the dollar amount for gifts being provided to customers and non-customers attending a bank grand opening?
There will be no requirements to open an account. Anyone who attends the grand opening will receive a gift. What regulation would apply to this?
We are trying to develop a Refer-a-friend program. We will offer a $50 bonus" for referring customer and a $50 bonus for the referred customer once the account is opened with direct deposit and they use a debit card a predetermined number of times in 60 days. We have a third party company that tracks referrals and bonuses which is trying to tell me I don't have to 1099 anyone because we're not paying the bonus at account opening - we're paying the bonus for meeting the qualifications of the program. Is a 1099 required for a $50 refer-a-friend bonus?
This is about an advertisement that offers a bonus to a customer and one of the conditions to be met in order to qualify for the bonus is having a set
number of debit transactions posted to the customer's account within a specific period of time. When disclosing this qualification in the ad for
the customer, should it be specified as "posted and cleared to your account" to be more clear and conspicuous or is the language "posted to your account"
Does Reg DD indicate the need to specify the term "cleared or completed"
when referring to posted?
I have been trying to find what the requirements are for giving bonuses to open a new account. There are advertisements everywhere of cash offerings, freebies, or giveaways. We’re still stuck on the value of offer cannot exceed $10, however we see TV ads offering $300 to open an account.
What compliance issues do we need to address if our offerings go beyond $10? As an example, April is Teach your Children to save month. Marketing has come up with a campaign that if you come by and get a piggy bank and bring it back full of coin with your child and use it to open an account, the bank will also deposit $10 into that new account, or it could be an existing account.
I would like to know what (if any) parameters surround banks giving bonuses to customers. I am familiar with the typical $10 refer a friend program but I am looking at amounts exceeding $10,000 on more than one occasion. The bonus or referral fee (I’m not sure how it is categorized) is paid based on how many people sign up for pre-paid cards on a monthly basis. I was able to find this article (noted below) but I think it misses the mark regarding what I’m looking for. The reason why I saved this article was
the bonus payments I’m referring to do not fall within the guidelines of numbers 1-3. “Now let’s look specifically at Regulation Q and what it has to say about paying a bonus on an account. In fact, §217.101 is specifically titled “Premiums on Deposits.” (a) Section 19(i) of the Federal Reserve Act and 217.3 of Regulation Q prohibits a member bank from paying interest on a demand deposit. Premiums, whether in the form of merchandise, credit, or cash, given by a member bank to a depositor will be regarded as an advertising or promotional expense rather than a payment of interest if: (1) The premium is given to a depositor only at the time of the opening of a new account or an addition to an existing account; (2) No more than two premiums per account are given within a 12–month period; and (3) The value of the premium or, in the case, of articles of merchandise, the total cost (including taxes, shipping, warehousing, packaging, and handling costs) does not exceed $10 for deposits of less than $5,000 or $20 for deposits of $5,000 or more. “
Is a bank able to give a fee (10 or 20 dollars) to a both the customer and the non-customer if they refer a non-customer to the bank and they invest in a CD account?
Could you please settle a disagreement we’re having regarding MLOs as defined by the S.A.F.E. Act? All of our mortgage (as defined by the S.A.F.E. Act) underwriters receive only straight salary compensation. They receive no additional compensation, e.g. incentive pay, bonuses, commissions, based on the number of mortgages they underwrite or the rates and terms of those mortgages and they do not engage in any solicitation of mortgage loan business. All rates and terms are set by senior management. There are no rate spreads and all underwriters are bound by the set rates and terms. They engage in no negotiating of rates or terms with applicants. Although manufactured home underwriters are permitted to consider a written request from an applicant for a deviation from the posted terms, the granting of the requested term does not affect the underwriter’s compensation. Do you believe these underwriters would be considered MLOs as defined by the Act.
We have businesses that write checks to employees for bonus money or for change orders. If the amounts are over $10,000, how do we fill out the CTR? Under the business or the person who walks away with the cash?
We would like to give away tickets to a sporting event to customers who open new accounts, but our compliance officer says that the value of a gift to a customer cannot exceed $10.00.
Even though I read through the white paper "Bonus on Accounts" that David Dickinson wrote, I am having trouble determining the compliance impact to our bank if we elected to pay for the first order of checks and the cost of the checks exceeds the $10/$20 "premium rule."I would appreciate feedback on any of the following:<ol><li>We could not exceed the $10/$20 premium rule if the account was a true demand deposit.<li>If the value of the $10/$20 premium rule is $12.00, but the cost ends up being less than $10.00 because the vendor provides a volume discount, which amount is the bank allowed/required to apply?<li>Under Reg. DD, is the payment of the first order of checks considered the absorption of expenses or the reduction of fees? </ol>