We have a free checking account and advertise it as such. The marketing people want to start imposing an inactive fee. Would this fee prevent us from calling the account "free"?

Thanks

Refer to the Commentary to section 230.8(a)#3 & #4 for more info on what is considered a fee:

3. Fees affecting “free” accounts. For purposes of determining whether an account can be advertised as “free” or “no cost,” maintenance and activity fees include:
i. Any fee imposed when a minimum balance requirement is not met, or when consumers exceed a specified number of transactions
ii. Transaction and service fees that consumers reasonably expect to be imposed on a regular basis
iii. A flat fee, such as a monthly service fee
iv. Fees imposed to deposit, withdraw, or transfer funds, including per-check or per-transaction charges (for example, $.25 for each withdrawal, whether by check or in person)
4. Other fees. Examples of fees that are not maintenance or activity fees include:
i. Fees not required to be disclosed under Sec. 230.4(b)(4)
ii. Check printing fees
iii. Balance inquiry fees
iv. Stop-payment fees and fees associated with checks returned unpaid
v. Fees assessed against a dormant account
vi. Fees for ATM or electronic transfer services (such as preauthorized transfers or home banking services) not required to obtain an account

Sounds like a dormant fee which is listed in 4(v). If this is true, I believe you can charge this fee and still call in "free."

Prior to giving the go-ahead to marketing, you may want to review your state's Unclaimed Property Laws as they relate to imposing fees on accounts for inactivity. If your state has adopted the Uniform Unclaimed Properties Act - it is not as simple as it seems. And don't get caught in the semantics argument on inactivity and dormant - it works out to be the same.