We would like to run a promotion to encourage businesses to open commercial accounts with our bank. This would be a limited promotion, but any business that would open account would have those terms for the life of that account.

We would like to market this in only one of the cities in which we have a branch. This is mainly due to one branch being only a few years in that area. We are trying to drum up commercial customers in that area.

Can we do this, only offer the promotion in one area/city?

You can run a promotion in one area; just make sure you document the reason for the promotion, etc. You do not have to do all advertising and promotions in all areas at the same time. You can have special promotions like this one where you find a need and for regular advertising as long as over time (like a 12 month cycle) you run ads to all markets, all demographics, you are fine. Just keep everything document, show that you have a plan and that you are encompassing all markets and all potential customers in those markets over the cycle.

"any business that would open account would have those terms for the life of that account"

Wow, talk about putting the bank in a box. Who knows what the market place conditions might be in the future (say 25 years), hyper-inflation, changes in processing or regulatory requirements, etc. The regulators might deem this a safety and soundness issue. They are not too excited about evergreen accounts.

Didn't we hear about some banks last year that didn't have a floor on floating rates on loans and the rates went negative? Randy is correct, it pays to think ahead on pricing, etc.

We have two branches in this particular city. One branch is only a few years old. The commercial lending is strong. But we need to grow the deposits at that one branch. The plan is to offer a low fee business checking account. For the customers that sign up for the account they will receive the terms of that account until if some future date we decide to revamp that account and notify customers. Saying "life of the account" was misleading. I meant that the terms are not a limited time only, like low fee for six months then the terms change.

This account would not be available at any of our other branches except maybe the other branch in that city. Management has not set a time limit to how long we will offer this type of business checking.

We do not have plans for any other promotions in the next 12 months. Our deposits are strong at all our other branches.

What laws or regulations should I be looking at for this?

I would offer at both branches in that city.

Also, I would offer for a limited period of time, not that this city gets a lower cost product as a permanent product offering. It is a special "sale" to beef up deposits in that city.

Thanks Kathleen...I would like to educate myself on this, where should I start?

Our Business Financial Services would like to offer higher CD rates to local customers that are receiving a substantial windfall from new gas wells in the area. I'm concerned about this type of targeted offering. I know there are no "Fair Lending" rules for deposits but can we offer this type of benefit to a limited group of customers.

You mean without teeing off all your other customers - probably not.