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#89284 - 06/18/03 01:07 PM Early Closure Fee
AMXSteve Offline
Joined: Jun 2001
Posts: 75
Wilmington, OH, USA
I know it's common practice to charge a fee for early closure of an account. We assess a $15 fee if the customer closes the account within 180 days. This is disclosed in our TISA disclosure. Our compliance officer is saying that we can't do this for our free checking because this no longer makes it "free." I disagree. This isn't a monthly maintenance fee and there is no min bal requirement. The customer just has to keep the account open. Are other institutions assessing the same type of early closure fee for free checking accounts.

Additionally, our free checking comes with an imaged statement. If the customer desires actual checks returned, there is a monthly fee. I feel we can do this on the free account and it remains a "free" account because it's an optional service, much like check printing.

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General Discussion
#89285 - 06/18/03 01:17 PM Re: Early Closure Fee
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I agree that an "early closure fee" is not a maintenance or activity fee. Therefore, you should be able to still call this account free.
David Dickinson

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#89286 - 06/18/03 02:32 PM Re: Early Closure Fee
Andy_Z Offline
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Joined: Oct 2000
Posts: 27,542
On the Net
While one could read into the reg that this would make an account no longer free, I don't see that as it wouldn't be a fee as you described or charged on a regular basis. It is a termination fee.

As to the imaged statements, that is an additional service added to an account like an ATM charge or for bill pay. I agree it too should not disqualify an account from being advertised as free.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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