Any fair banking concerns with a high yield savings account that is only for current CD customers? Some other requirements would be a minimum dollar balance. The product will be offered to maturing CD customers only and will most likely not be published as an ad (targeted marketing for this group of individuals). The institution offers a variety of other deposit products but was questioning this proposal as it is specific (and only available to) a small group of current customers.

As with any product, evaluate the demographic of individuals who hold CDs at your institution to see if there is any potential discrimination.
You are free to offer whatever deposit products with whatever rates you like, You ALCO committee should be considered in the interest rate risk and liquidity risk depending balances current CD customers keep.

Any fair banking concerns with a high yield savings account that is only for current CD customers?

ABSOLUTELY, yes.

Just to clarify, there are other savings deposit products offered, this is just a potential new product for current CD holders with a better rate than a rollover CD rate. If an institution only offered this one savings account and offered it to only a subset of customers, I would agree. But I don't think we are excluding others by offering a new product for maturing CD holders, while still offering a suite of other deposit accounts to all.

Devil's advocate: but aren't you offering this potential new product to a class of your customers? Customers that clearly have the means to put dollar (high dollar?) amounts in a CD? I understand the reasoning behind it.

On the flip side, if I am a current customer and want to invest in a high return account, I am only being offered the CD?

It could also be a schrewd marketing gimic for the branch.

Long-long time ago, the S&L had branches near 55+ communities. The CSR's found out that they could get more deposits by offering (as you are proposing) a bonus for good customers. The caveat, they told the depositor, "This is special, and only for you. Don't mention it to anyone". Sure as ever, when they got back, they mentioned it to their friends, who came in and asked for the same thing. The customers never failed to advertise for us and the branch never failed to exceed goals.

A new anon is jumping in here but, didn't "fair banking" get struck down? Isn't that just more "CFPB made it up" hokum that a court found had no basis in law?

(Fair Lending laws exist...fair banking is a matter of guidance and possible regulator overreach, isn't it? Or am I confused?)

A new anon is jumping in here but, didn't "fair banking" get struck down? Isn't that just more "CFPB made it up" hokum that a court found had no basis in law?

(Fair Lending laws exist...fair banking is a matter of guidance and possible regulator overreach, isn't it? Or am I confused?)

Depends on how you define "fair banking." UDAAP, which is how some define fair banking, is the law of the land. "Discrimination in non-credit products is a UDAAP" was overturned.

Stay tuned - the CFPB is appealing that decision.

Unfortunately since they lack Congressional oversight, they have unlimited funds to pursue court action, even frivolously and when it is clearly against Congressional intent. They can even hire over 6 dozen new attorneys at will, to flaunt Congressional intent.


"The American Banker article was based on an internal memo from Eric Halperin, CFPB Enforcement Director, which was sent to CFPB employees on September 21. As reported by American Banker, the memo indicates that Director Chopra has allocated about 75 new full-time employees to the Enforcement Division. As the CFPB currently has approximately 150 enforcement attorneys and support staff, the addition of the 75 new full-time employees would increase the number of full-time employees in the Enforcement Division by 50%."
https://www.consumerfinancemonitor....enforcement-attorneys-to-increase-by-50/