Paying Fees to Employees of an Affiliate

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Question:

We would like to pay employees of an affiliate fees to bring in core deposits to the bank (small state bank). The affiliate is a securities company. What should I worry about at the bank level, if anything? The fee would be $100-$200 determined by deposit size.

Answer:

There are two areas you should study before implementing this policy. First, make sure that there are no connections to any lending or settlement service providers that would be subject to RESPA's Section 8 prohibitions.

The other area you should consider are SEC rules that may affect what an employee of a securities company may receive.

First published on BankersOnline.com 2/6/06