Who doesn’t love to get something for free! The Great Iowa State Fair starts today and as a regular attendee, I will be partaking in the freebies…free concerts, free koozies, free pencils, free Iowa State University football posters (yes, they have the Iowa Hawks too!) and the list goes on….
However, when it comes to advertising an account or service as “free” we in the credit union world need to be careful. NCUA Rules and Regulations 707.8 (TIS) provides that advertisements must not be misleading or inaccurate and cannot refer to or describe an account as “free” or “no cost” if any maintenance or activity fee may be imposed on the account.
So, you’re probably thinking what is a maintenance or activity fee? NCUA has graciously provided a list in the Appendix C of the TIS rule that includes:
- Any fee imposed if a minimum balance requirement is not met, or if the member exceeds a specific number of transactions.
- Transaction and service fees that members reasonably expect to be imposed on an account on a regular basis.
- A flat fee, such as a monthly service fee.
- Fees imposed to deposit, withdraw or transfer funds, including per-check or per-transaction charges.
So, the next time you advertise something as “free” make sure you do your homework and determine that the account or service is truly free. Anything else could be considered misleading and inaccurate and we don’t want to go down that road! One Final Note: Come and enjoy the Iowa State Fair….Nothing Compares.