Customers Drawing for a Bonus on Free Checking

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Question:

Our Bank is considering a promotion that would allow a new customer to select their bonus (premium-$5-$100) for opening a free checking account (no minimum balance, no time requirement). This bonus will be printed on various slips of paper and placed in a container from which the customer will select. Do we have any compliance issues? Is this considered a sweepstakes?

Answer:

Whether or not this would be considered a sweepstakes would be a matter of State law. It would not appear to be a lottery as contemplated by the Federal banking regulations as all individuals opening an account would be receiving a bonus.

First published on BankersOnline.com 05/1/06