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Two Reg Q Questions

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Question: 
(1) If a bank offers new checking customers $10 for opening the account and an additional $25 if the customer signs up for Direct Deposit, is it true that we can avoid issuing a 1099 because the $10 is within Reg Q guidelines and the $25 is tied to a service, and not the opening of the account? (2) Is it true that Reg Q does not apply if a minimum balance is required in order for a new checking account customer to receive a specific cash premium? For example: The promo offer is that if you open a new checking account with a deposit of $2,500 or more, the bank will give you a $50 cash deposit/premium (payable on a specific date following the promotion as long as the account is active and in good standing) and a 1099 is issued. If so, can the offer be extended to both interest bearing and non-interest bearing checking accounts?
Answer: 

1) If you are talking about a Demand Deposit Account - Yes, as long as you meet the other conditions in Reg Q.

2) No - Reg Q comes into play if you require a deposit. You could not pay a $50 premium for opening a Demand Deposit Account under these conditions.

First published on BankersOnline.com 11/07/05

First published on 11/07/2005

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