students to make 18 deposits of $1.00 or more per week for 20 weeks (allowing two missed weeks). If the student makes all 18 deposits, they will receive a trophy at the end of the program. I have some questions after reviewing the proposed flyers/advertising and disclosures: • If we are giving a $2.00 voucher to open the “Champion Savers” savings account, and they may earn (if they complete all 18 deposits in 20 weeks) a prize equal to $50 (a trophy), does that mean they will have earned $52.00 in bonuses? • We are also giving each student a piggy bank when they open the account. Does that count as a bonus as well? o If so, how should we disclose the APY? Currently, we say that the “bonus does not earn an Annual Percentage Yield,” but the $2.00 voucher (deposited into the account) will earn interest. The trophy cannot earn interest, though, obviously. • Even though the child is receiving a voucher to open the account, do we still need to list that there is a requirement of $2.00 minimum to open a “Champion Savers” account? • Since the program is supposed to be teaching students how to save, one of the requirements is that the student must be present at each deposit. Can we do this? Parents can make deposits whenever they want, but we will only count the deposits made by the child towards the 18-deposit minimum. A: There is clearly a “bonus” with the voucher, piggy bank and trophy — their values must be aggregated because they are all related to the same promotion. This does not impact the APY because the APY is based solely on interest earned, not on any bonus payments, promotional items, etc. The disclosure of any bonus is pretty straightforward, as spelled out in Regulation DD, 12 CFR 1030.4(b)(7). The bank must disclose the amount or type of any bonus, when the bonus will be provided, and any minimum balance and time requirements to obtain the bonus. Your bonus disclosure gets a little longer since there are three elements to the total bonus, but you just need to disclose each. For example, “The bank provides a piggy bank at account opening, as well as a $2.00 voucher (which counts toward the required minimum opening deposit). Then, if at least 18 weekly deposits (of at least the required minimum amount) are made within the first 20 weeks, the bank will give the student a trophy.” Or similar language. It might be best to drop the sentence about the bonus not earning interest since it is not a required disclosure and is not true for part of the bonus (the voucher amount). Since there is a required minimum opening deposit (even though it is covered by the bank’s voucher), the minimum opening deposit of $2.00 should be disclosed. Community Banker 11
RkJQdWJsaXNoZXIy MTg3NDExNQ==