CMG Bonus Rules Questions

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    Here are a couple of question we received during our sessions last week on Reg DD Bonus Rules.

    1) Can you please give some more examples of when you can offer a gift over $10 (such as gift cards or money) without triggering the bonus regulations.

    ANSWER: The definition of bonus does not include:
    *discount coupons for goods or services at restaurants or stores
    *value that consumers receive through the waiver or reduction of fees (even if the fees waived exceed $10) for banking-related services such as the following:
    i. A safe deposit box rental fee for consumers who open a new account.
    ii. Fees for travelers checks for account holders.
    iii. Discounts on interest rates charged for loans at the institution; or
    *items with a de minimis value of $10 or less.

    Any other gift/thing of value offered in exchange for opening, maintaining, renewing, or increasing an account balance would be a bonus and would need to meet the disclosure and advertising requirements.

    2) When must you send a 1099 to customers who receive bonuses? Is there an amount limitation?

    ANSWER: Generally, a 1099-INT should be filed for every person to whom you paid $10 or more of reportable interest during the year, but you should consult a tax professional regarding IRS reporting requirements.

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