Here is my scenario - XYZ bank opens a new branch located near one of the largest factories in this town that does not bank with XYZ bank. To promote this new branch, XYZ bank wants to waive their $10.00 non customers not drawn on us fee for just these factory workers that come into cash their payroll checks? Is this a type of discrimination? If so, what regulation would they be violating. Thanks!

It's not discriminatory in any illegal fashion. However, it does take away any incentive those employees might have for opening an account with you because your branch is close to their work.

I'm still rattled at the thought of a bank cashing a check drawn on another institution for a non-customer. Or did I read that incorrectly?

Well, Dutchess, let's think it through (with liberal reading between the lines).

I'm XYZ bank and new to town. My consumer bankers are beating the bushes for consumer to open accounts, but we've got to get them through the door first.

By business bankers have been busy pulling D&Bs (fill in whatever you want, I'm not promoting them) and have found that this factory has "gold plated" credit (whatever that means). They think that making this offer to their employees might "grease the skids" and get them in the door. It is not likely that the payroll checks will bounce.

What will it "cost" us? The $10 a pop we wouldn't have gotten anyway if we didn't make this offer and the employees go to XYZ's bank and the float caused by giving immediate credit (cash) for items we have to collect from the drawee bank.

Doesn't sound too expensive to me, plus my tellers are not sitting around with nothing to do.

Been there, done that and have the t-shirt to prove it.

Al

What if XYZ's idea is to waive this fee temporally to get the employees use to cashing with them...then they approach the factory and convinces them to change banks because their employees are going to start having to pay the fee to cash. Their employees might pressure the employer to change banks.

Al...you beat me to it.

Duchess Skittles - You read it right. This Bank is willing to cash this one business' payroll check for a non customer with a check drawn on another institution AND not charge them a fee. If I am a worker from any other factory in town and a non customer with a non drawn on us payroll check, I have to pay the fee. Plus, the Bank has three branches in town but want to only promote it at this new branch. IMO it just doesn't seem right.

Al and Skyline - Then in both your opinions, you do not see anything wrong with this? Waiving a fee for a set period of time was never stated. The whole purpose of the bank is to get the workers used to dealing with them and then hopefully get them to open an account with the bank.

By the way Duchess Skittles, your dog is beautiful, what kind is it?

Thanks. Sheltie puppy - although she's grown since that picture was taken. She's going to be tiny, too - probably no more than 12-15 pounds full grown.

LUVDogs, am I correct in reading between the lines that you are with ABC bank, the current bank of account for the factory?

I always said my best customers were my most dangerous. If I lost them, I not only had to get a new customer for growth, but I also had to get another new customer to replace them.

Now you need an even better idea to keep them happy. Good luck.

Al

Actually no, ABC Bank issues the factories payroll check to the factory employee who comes into my XYZ Bank and wants to cash it. We therefore have a non customer, not drawn on our bank check that my bank, XYZ Bank, wants to go ahead and cash plus waive the fee. XYZ Bank wants to market to the employees and hopefully have them get used to cashing checks and us being so nice and waiving the fee, that they will open accounts with us. XYZ Bank only wants to do this in my branch located near the factory even tho two other XYZ branches are in this town.