Requiring a loan applicant to have an account

Hello Mary,
These matters relate to the legal concept of: legal or illegal "tie-ins".  The question would be best posed to your counsel. I researched the question decades ago when a competitor bank was making a company and loan and requiring them to move their 401K relationship as well.   However, my lay person's understanding of the matter is that you can "tie-in" the purchase of other banking products so long as the "tie-in" product is a standard banking product (certainly the case in your example) and that there is a benefit to the client for acquiring the tie-in product (such as a better price on the loan vs. if not buying the tie-in product). 

But I've never had a law degree so you best to seek professional advice.  I will say, however, there ARE laws that govern the question.

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Alvin Stolen
President & CEO
Providence Bank
Columbia MO
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Original Message:
Sent: 08-22-2019 10:14
From: Mary Fowler
Subject: Requiring a loan applicant to have an account

We are getting mixed messages on whether we are allowed to require that a customer have a deposit account with us before making them a loan.  Anyone have the answer?

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Mary Fowler
Chief Executive Officer
The Peoples Bank
Magnolia AR
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