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#2258647 - 08/25/21 01:46 PM Reg DD Bonus Definition
Learned Hand Offline
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Joined: Feb 2019
Posts: 20
There are several other threads on this site indicating that if you give a bonus just for opening an account, it is a Reg DD bonus; but if you have to open an account and do anything else to qualify, it is not a Reg DD bonus.

What is that position based on? I haven't been able to find any official interpretation, supervisory guidance, etc., saying anything about whether or not the inclusion of additional requirements removes an account-opening bonus from the Reg DD definition.

Putting my lawyer hat on, unless a law specifically provides a requirement or a prohibition, it doesn't exist. From that perspective, because the bonus definition in Reg DD does not say that bonus means consideration given "in exchange for opening, maintaining, renewing, or increasing an account balance with no limitations, restrictions, or other requirements," then having limitations, restrictions, or other requirements would not remove a bonus program from the Reg DD definition. If opening an account is one of the requirements, then it would qualify.

Of course, I've been in compliance long enough to know that a regulation is not a law, and that what really matters re. regulatory interpretation is what the regulators think it means. So, does anyone have a link or reference they can provide supporting the idea that "opening, maintaining, renewing, or increasing" actually means "opening, maintaining, renewing, or increasing, with no other requirements?"

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#2258649 - 08/25/21 01:54 PM Re: Reg DD Bonus Definition Learned Hand
rlcarey Offline
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rlcarey
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Posts: 77,216
Galveston, TX
If you have a promotion that requires additional steps, then it is not typically a bonus. If I get a bonus for opening the account and applying for a debit card and using that debit card 7 times in the first month, the bonus is not for opening the account.
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#2259037 - 08/31/21 05:35 PM Re: Reg DD Bonus Definition Learned Hand
Learned Hand Offline
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Joined: Feb 2019
Posts: 20
Has there ever been anything from a regulator supporting that interpretation? I'm not doubting that is the standard practice, but I'd like to have something I can point to other than "my vendor said so." I guess I could use the Bankers Online consensus as support for saying "this is the industry-standard interpretation," but I'd feel more comfortable if there was an actual statement from a regulator I could use.

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#2259041 - 08/31/21 06:02 PM Re: Reg DD Bonus Definition Learned Hand
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,216
Galveston, TX
Why do you need support other than the definition of Bonus:

(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.

I open an account and I do not get a premium, gift, award, or other consideration.

I open an account and I do 10 debit card transactions and I get a premium, gift, award, or other consideration after I do the 10 transactions.

Tell me how doing 10 debit card transaction falls into the category of opening, maintaining, renewing, or increasing an account balance.

I fail to see why there is such confusion.
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#2259043 - 08/31/21 06:19 PM Re: Reg DD Bonus Definition Learned Hand
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,333
Cape Cod
Under Regulation DD, it's only a bonus if it is paid for opening, maintaining, renewing, or increasing an account balance. If you don't get the "gift" unless you also request a debit card and use it 10 times, the bonus is conditioned on the debit card, not on opening, maintaining, renewing, or increasing.
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#2259044 - 08/31/21 06:21 PM Re: Reg DD Bonus Definition Learned Hand
John Burnett Offline
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John Burnett
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Cape Cod
Understanding Reg DD is the same as understanding most other regulations. You have to start with the definitions.
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