The marketing department wants to send a gift certificate to families of newly born infants within our community to open an account with us for them. Do the regulations prohibit this?

No regulatory prohibition

If the amount is over $10 and it is paid in connection with opening a new account, it is considered a bonus and subject to the advertising requirements of 1030.8(d).

I would be curious to know how marketing is planning to obtain its list of names. Are we requesting birth records from the county clerk's office, reading announcements in the newspaper? There may be some risk of customers viewing the bank as 'Big Brother watching."

Also has marketing performed a cost/benefit analysis? What volume of deposit accounts are we expecting to bring in with this promotion and will the cost of the bonuses be offset by the income we can generate making loans against those deposits. I find that minor accounts tend to be low balance and expensive to the bank to manage in terms of staff time, monthly/quarterly statements, etc.

The infants born within our community are not published in our newspapers. They stopped doing this when identity theft became an issue with minors in our area. This would be by word of mouth from our customer base if mentioned to our Frontline representatives. They do not plan to advertise this in any sort of media campaign.

Anon, I had been with a bank that had a similar promotion (a long time ago). We could easily identify them 1 and 2 years later when they became inactive, then dormant. Parents are too busy to think of adding to the account.

Like Brian mentioned, " I find that minor accounts tend to be low balance and expensive to the bank to manage in terms of staff time, monthly/quarterly statements, etc."

Check with your local hospital. They might have a gift basket they give to parents of new borns with gifts and coupons from local business. The hospital could include your offer in the basket without you having to worry about privacy issues.