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CDs Only Offered in Bank's Geographic Market Area

Answered by: 
Andy Zavoina

Question: 
We will be offering CDs tied to money market accounts, both at premium rates, for a short time as a way to get new customers in the door. We do not want to offer these accounts to people outside of our geographic market area. If we have a "no out of area accounts at these rates" policy, are we required to disclose that in print advertising that only runs in our local area?
Answer: 

I don't know that there is a hard and fast rule. Unlike a loan, you don't have a direct discrimination issue but you do want to be fair. If one of your customers from out of the area wants the rate, do you tell him no, and to take their business elsewhere. If you get a new customer who isn't in the deposit area (which I assume you have defined, even for CRA) do you tell them the same thing?

So I believe the easy answer is, you don't have to provide the same products and rates at all branches. But working with some customers could make it difficult. Hopefully these would be isolated cases.

First published on BankersOnline.com 2/21/05

First published on 02/21/2005

Filed under: 
Operations
Filed under operations as: 
Branches
Discrimination
IT

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