Answer:
This is neither a bonus for Reg. DD nor interest for Reg Q purposes. Rather it is compensation paid to a contract-type employee. It is reportable to the IRS if you pay $600 or more and you would report this on a 1099-MISC. You will need their SSAN and other information for reporting purposes. So you'll need an internal system to track this.
You'll also need to discuss with counsel the privacy concerns. The customer opening the new account will have to allow you to release the fact that they have opened an account with you, in order for you to pay the referring customer.
First published on BankersOnline.com 9/11/06