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#1455083 - 10/14/10 02:06 PM Discrimination?
beegee Offline
Diamond Poster
Joined: Feb 2004
Posts: 1,110
South
Given the drop in OD fee income our bank has analyzed its free checking customers and determined which customers are profitable and which are nonprofitable. The end goal is to do away with our free checking account. If you are a profitable account you can be "grandfathered" into the existing free account but if you are unprofitable you will be slotted into an account with a service charge.

Could this be interpreted as discrimination if the "unprofitable" accounts are a protected class or low income individuals or geographies?

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#1455134 - 10/14/10 03:14 PM Re: Discrimination? beegee
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
I would be concerned whether there could be a claim under UDAP. You advertised and enticed clients into a product and you are now moving SOME of them into a fee-based product. Discrimination? I don't know. Slippery slope? Definitely. I would consider the potential for reputational risk.

All of these issues depend on so many factors. How long has the product existed. How was it advertised. How distinct are the markets you reference. Lots of variables to consider.
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