Responding to questions from a federal savings bank, the OTS issued Q&As on a proposed discount program to be offered to consumers through a third-party vendor. The discount program would provide services such as roadside assistance, emergency reimbursement, and car rental and lodging discounts, and the bank would retain a portion of the membership fee as compensation. The Q&As suggest that: (1) these activities are permissible under the Home Owners’ Loan Act, (2) there is no legal issue with accepting a percentage of the program fee as compensation, and (3) if the bank decides to use its logo on the membership card, it should be careful in doing so and should provide adequate disclosures that make clear that a third-party vendor is providing the products and services. Click here for the Q&As.
Alert August 26, 2008