Offering Gas Coupons

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Question:

Our consumer lenders and marketing departments have figured out a way to increase car loan volume. For newer cars and requests greater than $5,000 they'll offer gas coupons. For customers who don't qualify for the government's Clunkers Program, this may be an incentive to choose us for borrowing. What issues do we need to watch?

Answer:

There are no red flags of which I am aware. Just be certain to gather address and TIN information for IRS purposes should any individual receive $600 or more from this promotion, combined with others you may offer, during the calendar year. The area of concern is in RESPA related loans and referral fees to third parties. This is not the case in the scenario you present.

First published on BankersOnline.com 8/10/09