Requiring a loan applicant to have an account

I agree with Alvin.  The tie in issue is complex.  In addition to legal counsel, I would suggest that you reach out to the regulatory agencies through your case managers or compliance examiners and get their opinion on the matter.  I also, years ago, looked into the issue.  I found at that time that while it may be legally permissible, the regulators had a lot of issues with it.  There are UDAAP and fair lending issues that loom large in this area.  I would suggest you proceed with extreme caution and have significant amounts of supporting documentation as to the purpose behind the tie in.  Good luck.​

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Robert Hemsath
Chief Executive Officer
Mills County State Bank
Goldthwaite TX
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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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