We currently have a checking account with a $9.95 fee but if you open a "credit building" loan at the same time, the service charge will be waived for the first year. You can open the checking account without the loan and get the loan without the checking account. The fee is listed on the TIS disclosure as a monthly service charge and nothing is listed on the disclosure about fee being waived if the customer has a loan. First, should the TIS disclosure have a statement that the service charge may be waived in the first year if the customer has the loan? Second, should the service charge be listed on the monthly account statement with an off setting entry during the time it is waived or is it ok to just leave the fee off the statement?

Thanks for any help with this.

"credit building" loan - Well that term begs a lot of questions.

However, I'm not sure that it requires any specific disclosures depending on how you market it.

What I can tell you is that you better have some really good tracking, because if the regulators find one instance where a customer didn't receive this benefit and you market it as such, all UDAAP heck is going to break lose.

If for no other reason than to save yourself a lot of headache, show the fee then refund the fee on the statements. 12 months is a long time for a customer to remember that there is, in fact, a fee associated with the checking account. Sometimes customers "conveniently" forget.

"Why am I getting this fee?" "You [never] told me I'd have a fee on the account." "I've never been charged before!"

......I'm sure you've never heard these questions/arguments before, right?!

Thanks for the information. If I understand correctly, we would not be required to change the TIS for the checking account to include a statement that if they also have the "credit building" loan the $9.95 fee is waived for the first year. We may want to list the fee on the statement and then show a refund so the customer will remember there is a fee but it would not be required.

Just verifying...ops and marketing don't want to make the changes.