Does anyone know of any Fed Letters regarding allowing personal accounts to be tied to account analysis of a corporate account for waiving of service charges? Let's say that Joe Smith keeps below minimum balances in a personal DDA, but that because it is tied to an analysis system and the corporate account has excess earnings credits the account fees are not charged to the personal account. Or John Attorney keeps a ton of money in his personal DDA but below minimum balances in his Corporate General Account for his practice, but the balances of both together have sufficient earnings to waive the hard dollar charges. Anyone have any thoughts?

You can any waive fees you want based on any type of relationship or combination of traditional banking products (as long as you comply with the anti-tying provision).

Randy,
Since our attorney gave us the opinion that we could not tie personal accounts to analysis of a business account, do you know of any specific documentation that points to your opinion?

Well, if it was prohibited, you would most likely have to find it in Reg Y - but as long as you are talking about traditional bank products, I don't think you are going to find anything. Was the attorney basing this on some privacy concern maybe? In his opinion - did he provide a citation to support his analysis? The law usually tell you want you can't do - it is normally pretty hard to point to a citation that says you can do something.

I am not familar with Rg Y. Can somone give some examples. I have read it and still don't quite understand it.

The Bank Holding Company Act Section 106 states that:

A bank shall not in any manner extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition or requirement--

(A) that the customer shall obtain some additional credit, property, or service from such bank other than a loan, discount, deposit, or trust service;

(B) that the customer shall obtain some additional credit, property, or service from a bank holding company of such bank, or from any other subsidiary of such bank holding company;

(C) that the customer provide some additional credit, property, or service to such bank, other than those related to and usually provided in connection with a loan, discount, deposit, or trust service;

(D) that the customer provide some additional credit, property, or service to a bank holding company of such bank, or to any other subsidiary of such bank holding company; or

(E) that the customer shall not obtain some other credit, property, or service from a competitor of such bank, a bank holding company of such bank, or any subsidiary of such bank holding company, other than a condition or requirement that such bank shall reasonably impose in a credit transaction to assure the soundness of the credit.

Reg Y includes exceptions to this rule, such as:

Vary the consideration for any product or package of products based on a customer's maintaining a combined minimum balance in certain products specified by the bank (eligible products), if:

(i) The bank offers deposits, and all such deposits are eligible products; and

(ii) Balances in deposits count at least as much as nondeposit products toward the minimum balance.

So if the bank lets say does a construction loan and commits to the end loan; and then in its documents it states that it will charge a release fee if not finance through the bank for the end loan...This would be considered violation?