Regulation DD and Free Safe Deposit Box for Account Opening

Issue/Inquiry

The Bank would like to offer a free safe deposit box for one year along with one direct deposit when a checking account is opened. This promotion will only be offered at one location. Does the Bank need to include disclosures for the qualifying checking accounts or can the disclosures be general?

Response Summary

Giving a free safe deposit box for opening a new account is not considered a bonus under Regulation DD. As such, disclosures appropriate for bonuses are not required to be made in the account opening disclosures for qualifying accounts.

Response Detail

When a bonus is offered, Regulation DD requires the account opening disclosures to disclose the amount or type of the bonus, when the bonus will be provided, and any minimum balance and time requirements to obtain the bonus. 12 CFR §1030.4(b)(7).

The question in this case is whether offering a free safe deposit box is considered a bonus and would require such disclosures to be made.

Regulation DD defines the term “bonus” as a premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance. 12 CFR §1030.2(f).

The official commentary states that bonuses do not include the value that consumers receive through the waiver or reduction of fees regarding banking-related services, such as a safe deposit box rental fee, for consumers who open a new account, even if the fees waived exceed $10. Official Interpretations, 1030.2(f) – 4.

Therefore, the Bank giving a free safe deposit box to a consumer for opening a new account is not be considered a bonus, and no disclosures regarding such need to be made in the account opening disclosures for qualifying accounts.

This response is for informational purposes only and is not intended for legal guidance.

This entry was posted on Monday, March 9th, 2020 at 9:22 am.