ABA Banking Journal - May/June 2016 - (Page 46)
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Can I Require a
Safe Deposit Box Renter
to Have a Deposit or
Under the Anti-Tying
Rule, would a bank be
prohibited from requiring
a person to have a deposit or
loan account at the bank in order
to get a safe deposit box?
No. Requiring a customer to have an
account relationship with the bank
does not violate anti-tying rules. The
anti-tying rule specifically allows a
bank to condition both the availability
and price of any bank product (the
desired product) on the requirement
that the customer obtain a "traditional
bank product" (the tied product)
from the bank. One of the purposes
of this exception is to allow banks
and their customers to continue to
negotiate their fee arrangements on
the basis of the customer's entire
banking relationship with the bank.
Several facts are important in
determining whether the traditional
bank product exceptions apply in a
given situation. Among those is that the
exceptions are available only if the tied
product is a traditional bank product.
The statute defines a traditional bank
product to be a "loan, discount,
ABA BANKING JOURNAL | MAY/JUNE 2016
deposit, or trust service." The
statute also defines a "trust service"
to mean any service customarily
performed by a bank trust department.
Products that fall within the scope
of these terms include, among other
things, safe deposit box services.
(Response provided Feb. 2016)
We have a loan to a
director's wife that is
unsecured and the
proceeds are for home improvements.
Since her husband, our director,
did not sign the note, would
we report it as a Regulation O
loan since he receives "benefit"
from the funds of this loan?
It depends, but it may be prudent to do
so. The issue, as you have indicated,
is that it may be viewed as made with
the intent to bypass the provisions of
the regulation, especially as the insider
will arguably receive some benefit from
the proceeds (i.e., improvement of
the dwelling which they both share).
However, depending on the specific
facts and circumstances of the
transaction it may be possible to argue
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ABA Banking Journal - May/June 2016