As an incentive to use electronic statements, a feature of one of our savings accounts charges $10.00 per paper statement. We've had some strong consumer push-back. It brought up several staff questions:

1. May we waive the paper statement fee for people over a certain age?
2. Is there a regulatory minimum age to waive the fee, or is it simply a matter of clearly disclosing whatever it is we choose as an account feature in advertising and account disclosures?
3. May we waive the fee only for "local customers", such as with an account address in our state?
4. May we waive the fee just because someone yelled a lot?

Did you do the "ESIGN dance" before laying this fee on your savings customers? If you issue a statement on these accounts, Regulation DD requires that it be in writing. You can use ESIGN to make your electronic statement the legal equivalent for written statements. Check out section 7001(c) of E-SIGN at https://www.bankersonline.com/regulations/esign-7001 to see what you need to do to obtain a consumer's "demonstrable consent" for electronic statements.

Note that you can include in the information you send out to solicit that consent information about whether paper statements can be obtained and at what cost.

I'll be candid with you and suggest that part of the push-back may be about the size of the fee. That's a heck of a lot more, I think, than your costs for rendering and mailing a statement.

Yes, we did the ESIGN dance...thanks for bringing that up.

Any regulatory issues on the questions about foregoing the fee based on age, location, crabbiness factors?

Thanks.

Probably your biggest risk is your customers comparing notes. Myself, there would be no complaining, I would just go to the next bank up the street unless everyone charges $10. Also, be aware that advertising the account as "No Monthly Maintenance Fee" and then footnoting a $10 paper statement charge is probably going to get you a UDAAP.

How did this fee become part of the product? Was it there the day each depositor opened an account...or imposed later via a change in terms?

Fee was there from Day One.

So, then, this boils down to a case of buyers' remorse? If numerous accountholders are now asking for fee waivers, that could be telling you there wasn't enough market research before the product was rolled out. Case-by-case fee waivers are tough to control and can easily lead to customer hard feelings. The cleanest way to correct a pricing error is a rollback--it works for Wal-Mart! Once you get to a fee level that's generally accepted, hold the line.

Thanks for your feedback.

Does anyone see a regulatory issue with these items below:
1. May we waive the paper statement fee for people over a certain age?
2. Is there a regulatory minimum age to waive the fee, or is it simply a matter of clearly disclosing whatever it is we choose as an account feature in advertising and account disclosures?
3. May we waive the fee only for "local customers", such as with an account address in our state?

Besides any state laws that may apply, the only regulatory issue I can think of if you disclose your fees/waivers correctly (to avoid UDAAP) is possibly Reg B. If any of your products have loan discounts or loan perks, you would want to ensure that your age cut off aligns with Regulation B, which is age 62. If you had a cut-off of 55 to waive a fee on an account with a loan perk, there could be fair lending implications when a 54 yr old woman has to pay the fee to get the loan discount/perk but the 55 yr old man doesn't have to pay the fee to get the discount/perk. If your checking accounts don't have loan perks/discounts, fair lending is a non-issue on deposit accounts.

Thanks!

I believe you've got your answer, it's one mostly of disclosure and internal justification. I'll add one more precaution for those reading this thread. Check your state laws. Some states, Texas as an example, includes (or did, I'm not aware of any changes) a requirement that a consumer be provided some number of statement copies annually free of charge. There have also been some regulatory concerns over charging for a document that is required to be provided. My point is, ensure you're aware of these laws and how you might combat them if needed.

While I'm in favor of imposing a nominal fee for statements, at your bank I'd be following Randy out the door and to a competitor. $120 a year for statements would be the poster child of arguments against such a fee for anyone who can't afford a computer or doesn't want one. This argument may be tempered if the bank offers other products, similar in nature, without such a fee. I would also point out that no consumer I know considers a $10 fee a "feature" of an account. The term is usually reserved for positive things.

Don't you mean a nominal fee, not for the statement itself, but rather for a non-standard delivery method?

To piggy back off the original question, my institution is wanting to charge a $3 fee on ALL deposit accounts that receive a paper statement. We currently advertise our checking accounts as free which I would presume would need to change since we would be tying the maintenance fee to the account. Also, would you say there is a UDAAP concern since we are placing it on all our deposit accounts, so lower income or senior customers who don't have access to the internet wouldn't be able to avoid the fee?

+1

Like Randy, I will move my accounts to a competitor. Earlier this year, I did just that and closed a long-term relationship when the bank imposed an across-the-board $2 fee in order to continue the paper statements I had received since inception of the account.

I'm a "senior customer" with almost 25-years' internet experience (as both a service provider and consumer) and have used the internet for almost anything (legal) you can imagine...but my bank's pricing decision was a slap in the face. I might have reacted differently if the fee was attributed to discretionary use of a feature of the account, but a statement is a legal requirement, not a feature.