Waiving Fees For Certain Business Customers

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Question:

Would it be discriminatory if we waived fees on some business customer (large depositors) and not allow waivers for other business customers (small depositors)? If this is allowed, do we need to establish a policy?

Answer:

Discriminatory practices are not just those associated with loans so this is a good question.Certainly if there was evidence that only one class was receiving benefits from this process and a protected class was on the other side of the scale paying fees, there could be reputational risks.

If you have a policy in place and apply it based on acceptable and reasonable business practices and there is no evidence of discriminatory practices you will be fine. You can test this if you review a list of accounts and genuinely know the account holders or business types. Monitoring information is not available for deposit customers so this may be difficult based on your size and geography.

Overall this should not be such an issue if the refunds are based on the relationship's income to the bank as I would acquaint it to an analyzed statement.

First published on BankersOnline.com 06/2/03