Answer by David Dickinson:There is no discrimination regulations for deposit products. Your institution can do this, but it may be a customer service nightmare for those that don't qualify.
Answer by Andy Zavoina:One question the bank really needs to ask is how it would respond to a news article about this interest rate variance. It could be a real problem in the local market.
Answer by Richard Insley:This practice can be an effects test backdoor to a credit discrimination problem. After concentrating your deposit gathering efforts in affluent areas, credit discrimination is only one step away. By providing any preferential treatment to credit applicants on the basis of their deposit relationships or deposit balances, you are redlining.
First published on BankersOnline.com 1/19/09