Hi all. My institution offers unsecured personal loans and lines of credit. We have 3rd parties facilitate the marketing and credit application processes on our behalf. These 3rd parties register with us, and may be registered with other lenders as well. Conceptually, it's similar to, say, opening a line of credit at a jewelry store in order to buy an engagement ring. Or maybe like indirect auto lending. As part of a marketing initiative to hopefully create loyalty with providers who submit applications to us, we are considering paying off the outstanding balance of one lucky customer.
This, frankly, isn't something I've ever seen before, although quite possibly it's reasonably common. I tend to think there are few compliance hurdles with this, and that the work, if any, is more on the legal side of things. In terms of compliance, I think of fair lending in terms of treating one borrower better than others (but don't really see a huge problem), and I think of sweepstakes and lotteries, but don't see much there, either. Am I crazy? Or just bad at my job after 10 years in? Are there significant issues I'm failing to take into account? Any insight much appreciated!