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Reg Q - Cash Bonuses for Opening Accounts

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Our bank would like to conduct a promotion on our non-interest bearing checking accounts by giving cash bonus ($25) for opening a new account with a $100 opening deposit requirement. We do not require customer to keep the account open or the opening deposit for any period of time. Are we compliant with Reg. Q or in violation of paying interest on DDA?

While one might wonder whether such an offer might be an invitation to rip off the bank by opening accounts and immediately closing them, it appears that your plan may satisfy the requirements of section 217.101(b). I recommend that you run your plan by your regulator to see if it agrees, since my interpretation hinges on how the Federal Reserve Staff interprets the word "and" in the regulation's language.

First published on 5/19/08

First published on 05/19/2008

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