Good morning,

Marketing is considering a promotion for new checking products where anyone who opened a particular checking account would receive a credit on closing costs on a first mortgage. I am thinking we would treat this as a bonus and provide all the terms and conditions at account opening. Am I correct in this thinking?

I do not see it as a bonus. I don't get anything unless I apply for a mortgage.

(f) Bonus means a premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance. The term does not include interest, other consideration worth $10 or less given during a year, the waiver or reduction of a fee, or the absorption of expenses.

Hmm. Ok, I was looking at that same definition and was thinking it would be considered a bonus and terms would be applying for the mortgage within whatever timeframe marketing came up with.

So, because its not just open the account, get the premium, gift etc., it would not fall under that definition?

As always, I appreciate your answers!!

Even if you thought it might be included, it also is one of these is it not? the waiver or reduction of a fee, or the absorption of expenses.

They are not really receiving anything.

If the bank offering was to make a donation to a charity of your choice (in your name) for opening a specific account with a specific deposit amount (for example $50,000 CD). That would be a bonus since the customer could claim it on their taxes, since it is in their name?

It's a wash - it is income and a donation whether or not you have to file a 1099MISC, they are still supposed to report it as income. You might make a donation in their name, but I am not sure how they get to claim it as a donation if they never earned it. All this should be properly disclosed to the accountholder, so they are not mislead into believing otherwise.