We are looking at creating an account where if the customer meets certain criteria we will make a donation on behalf of the customer to a list of charitable organization that the customer can choose from. We would send the donation directly to the organization.

At first glance at the Reg. DD definition of bonus I thought this would be considered a bonus; but the definition states “given or offered to a consumer” which in this case we wouldn’t be giving the funds to the consumer but would be giving the funds to the charitable organization.

(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. The term does not include interest, other consideration worth $10 or less given during a year, the waiver or reduction of a fee, or the absorption of expenses.

Would a charitable donation made on behalf of the customer be considered a bonus under Reg. DD? In my opinion, we are offering the charitable donation made on behalf of the customer and this is is definitely consideration.

Unless this is made in a manner where the customer can deduct the charitable contribution from their taxes, it is not made on their behalf.

Even then, if the amount donated can be claimed as a charitable deduction, I don't think the taxpayer gets $10 in value unless the deduction is large enough to impact their tax bill by $10.