The anti-tying provisions of 12 U.S.C. § 1972 are among the most significant restrictions governing how banks market and price their products. Generally, a bank may not condition the availability or pricing of one product on a customer’s purchase of another product. However, the combined-balance discount exception provides meaningful flexibility for banks seeking to reward full-relationship customers.
Safe Harbor for Combined Balances
Under 12 CFR 225.7(b)(2), a bank may condition product availability or pricing on a customer obtaining a “loan, discount, deposit, or trust service.” The Federal Reserve has identified 20 categories of qualifying services, including but not limited to:
- All types of extensions of credit, letters of credit, and financial guarantees
- All forms of deposit accounts, safe deposit box services, and escrow services
- Cash management, payroll, and payment/settlement services
- Fiduciary, custody, and transfer agent services
- Credit card and merchant processing services
- Remote/mobile deposit capture and deposit sweep services
Expanded Definition of “Customer”
For combined-balance discount purposes, “customer” may include not only the natural person but also any members of that person’s “immediate family” (as defined in 12 CFR 225.41(b)(3)) who reside at the same address. This allows household-level product bundling. Additionally, financial products including insurance products may count toward the combined balance.
This exception offers banks significant latitude to design relationship-based pricing programs, but careful documentation is essential to demonstrate compliance.
DM Tip: Review your product bundling and discount programs to ensure they fall within the safe harbor. Document which products count toward combined balances and maintain records showing that household-level aggregation is limited to immediate family members residing at the same address.