$25 Promo for Credit Card Applications

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Question:

The bank wants to give a gift under $25 for all customers who fill out applications for credit cards or loans. This promotion will be held at branches in certain areas, but not statewide. Flyers will be available at all the personal bankers' desks. What would be the compliance requirement?

Answer:

You are talking about a loan so common Reg Q and DD prohibitions do not apply. Reg Z has no prohibition. RESPA prevents payments to third parties. Since the accounts you are mentioning aren’t likely RESPA and aren’t payments to third parties, you are fine. The only issue you may have is tax reporting. You’ll have to determine what would be the maximum you’d pay to any one person and if that fits in a 1099-MISC or some other tax reporting category. A 1099-MISC isn’t required until you hit $600.

First published on BankersOnline.com 10/18/10