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#2247720 - 01/15/21 12:03 PM Free Checking
Anonymous
Unregistered

Hello - I have seen an advertisement for Free Checking with eStatements. Then the footnote states that if you don't choose eStatements there will be minimum balance fees, etc. I thought this shouldn't be advertised as free? Thoughts?

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#2247722 - 01/15/21 01:07 PM Re: Free Checking Anonymous
Adam Witmer Offline
Power Poster
Joined: Sep 2010
Posts: 2,658
A minimum balance fee is a "maintenance or activity fee" that cannot be charged if the account is advertised as free.

1030.8 of Regulation DD says this:
(a) Misleading or inaccurate advertisements. An advertisement shall not:
(2) Refer to or describe an account as “free” or “no cost” (or contain a similar term) if any maintenance or activity fee may be imposed on the account. The word “profit” shall not be used in referring to interest paid on an account.


And the commentary explains that minimum balance requirements are considered maintenance or activity fees:
3. Fees affecting “free” accounts. For purposes of determining whether an account can be advertised as “free” or “no cost,” maintenance and activity fees include....i. Any fee imposed when a minimum balance requirement is not met, or when consumers exceed a specified number of transactions.
_________________________
Adam Witmer, CRCM

All statements are my opinion, not those of my employer, and should not be taken as legal advice.
www.compliancecohort.com

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#2247730 - 01/15/21 02:54 PM Re: Free Checking Adam Witmer
Smokey Offline
New Poster
Joined: Jan 2010
Posts: 7
Thanks Adam. I agree. However, there's a bank in the area doing that and I'm being asked why we can't do that. And......I was told by a banking organization that as long as you explain the condition - Free checking with eStatements that it's fine. We have always avoided the word free.

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#2247731 - 01/15/21 03:03 PM Re: Free Checking Anonymous
BrianC Online
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
One of my clients received a Severity 3 Exam finding from the FDIC and was ordered to perform a two year lookback and refund all these fees.

"But the other guy is doing it!" was never an excuse I accepted from my kids when the were doing something wrong and I won't accept it from my coworkers either.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

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#2247736 - 01/15/21 04:23 PM Re: Free Checking Anonymous
Smokey Offline
New Poster
Joined: Jan 2010
Posts: 7
That's good information Brian. Thanks.

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