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#2211763 - 04/22/19 05:45 PM Checking Rewards for Debit Card Usage
Matt Offline
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Joined: Sep 2015
Posts: 2
If a bank sends a marketing piece about encouraging debit card usage, are the rewards defined as a "bonus" under Regulation DD?

Example 1: use your debit card 3 times from XX/XX to XX/XX and you will receive a $10 credit in your checking account.
Example 2: use your debit card 3 times from XX/XX to XX/XX and receive a $50 rebate coupon from XXXXXX.com.

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#2211786 - 04/22/19 07:09 PM Re: Checking Rewards for Debit Card Usage Matt
Skittles Offline
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TN
While I don't know the answer to your question without looking it up - I will caution you to have some additional information. Do these debit card transactions have to post (if so - you must disclose that)?
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#2211797 - 04/22/19 08:05 PM Re: Checking Rewards for Debit Card Usage Matt
rlcarey Offline
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Galveston, TX
Using a debit card does not qualify as a bonus under Reg. DD:

(f) Bonus means a premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance.
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#2211823 - 04/23/19 12:59 PM Re: Checking Rewards for Debit Card Usage Matt
Matt Offline
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Joined: Sep 2015
Posts: 2
Thank you both.

So, even if a gift or award is over $10, the fact that the bank is encouraging use of the debit card does not mean Reg DD bonus disclosures are required on the marketing piece?

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#2211824 - 04/23/19 01:02 PM Re: Checking Rewards for Debit Card Usage Matt
rlcarey Offline
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Galveston, TX
Your proposed rewards are not in exchange for opening, maintaining, renewing, or increasing an account balance.

That doesn't mean that any marketing material is void of potential UDAAP issues.
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#2244796 - 10/29/20 03:11 PM Re: Checking Rewards for Debit Card Usage Matt
fretzer Offline
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Joined: Dec 2008
Posts: 76
Pennsylvania
I have a follow-up in regards to advertising Cash Back Rewards accounts. If a single print ad states the bank offers Cash Back Rewards Checking, would that trigger a "one click" for more details? It wouldn't fall under TISA, but I wasn't sure from a UDAAP perspective if it would cause an issue by not providing enough information for the consumer to make an informed decision. If the print ad provided the bank's website, would that be sufficient? Am I thinking too deep?!

Thank you!

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#2244876 - 10/30/20 03:58 PM Re: Checking Rewards for Debit Card Usage Matt
Inspector Offline
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Joined: Apr 2016
Posts: 263
While I think you are overthinking the specific print ad, UDAP requires a bigger picture analysis of the whole process. A general advertisement that mentions the existence of a service is probably fine but you could always add the "see website/employee for details and limitations." The important thing is that you don't make any misrepresentations or claims in the advertisement that are proven inaccurate/sketchy by subsequent disclosure and that the material terms of the service are provided to the customer clearly before they sign up.
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#2266205 - 02/11/22 05:38 PM Re: Checking Rewards for Debit Card Usage Matt
terpsfan Offline
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Joined: Feb 2007
Posts: 1,972
For a similar promotion if the bonus is provide 90 days after the transaction but the account must be opened would this become a bonus since they have to maintain the account for at least 90 days to obtain the bonus even though the bonus is triggered by using the debit card?

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#2266207 - 02/11/22 05:51 PM Re: Checking Rewards for Debit Card Usage Matt
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,967
Galveston, TX
No - your bonus is based on debit card activity and not on the account remaining open. I leave my account open without debit card activity - I get squat.
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