Can a bank market or offer a certain area or branch a promotional rate loan as long as it is not discriminatory?

Yes, but discrimination is the key issue and it is a big one. You should take several steps to ensure that discrimination is not a result of the rate. This includes looking at the demographics of the market for the branch that offers the favorable rate and comparing that information to the demographics around other branches. Is anyone left out of access to the favorable rate on a disproportionate basis?

Also look at competition. This may be the reason you want to offer the favorable rate. Staying in business is an over-riding justification for market differences such as special rate offers. Just make sure that the need is real.

Ultimately, you need a sound, business-based reason for offering different rates or different products based on location. You also need to be prepared to respond to customers who find out about it and ask why they can't have the product at their branch.

I would add that you should carefully document what is done differently and why. This may come up years later at a fair lending exam or require justification on your CRA list of products and services offered.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

Andy makes a very important point. Document the decision, including the reason why. And keep that documentation for as long as an examiner or investigator may observe the difference in rates. The Department of Just rule is: If it isn't documented, you didn't do it.