No, we are not aware of any prohibitions on paying referral fees related to deposit accounts. However, you do have a duty to maintain your customers’ privacy. As a result, we recommend obtaining a new deposit account customer’s authorization before notifying the referring party that they are entitled to a fee.

As you noted, the Real Estate Settlement Procedures Act (RESPA) prohibits kickbacks for referrals of real estate settlement services involving “federally related mortgage loans.” While we are not aware of any similar prohibitions for deposit accounts, Regulation P’s privacy requirements generally prohibit your bank from disclosing “the fact that an individual is or has been one of your customers or has obtained a financial product or service from you.” The Illinois Banking Act also requires that a bank obtain a customer’s authorization before disclosing their financial records or financial information to a third party.

Consequently, we recommend obtaining a new deposit account customer’s authorization before notifying the referring customer that they are entitled to a referral fee. When advertising your referral program, you also may wish to clarify that you cannot pay a referral fee (thus exposing information about your new deposit account customer) unless you receive the new customer’s authorization to discuss their account relationship with your bank.

For resources related to our guidance, please see:

• RESPA, 12 USC 2607(a) (“No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.”)

• RESPA, 12 USC 2602(1) (For the purposes of this chapter . . . the term ‘federally related mortgage loan’ includes any loan (other than temporary financing such as a construction loan) which . . . is secured by a first or subordinate lien on residential real property (including individual units of condominiums and cooperatives) designed principally for the occupancy of from one to four families, including any such secured loan, the proceeds of which are used to prepay or pay off an existing loan secured by the same property . . .”)

• Regulation P, 12 CFR 1016.10(a) (“Except as otherwise authorized in this part, you may not, directly or through any affiliate, disclose any nonpublic personal information about a consumer to a nonaffiliated third party unless: . . .”)

• Regulation P, 12 CFR 1016.3(p)(1) (“Nonpublic personal information means: . . . (i) Personally identifiable financial information . . .”)

• Regulation P, 12 CFR 1016.3(q)(2)(i) (“Personally identifiable financial information includes: . . . (C) The fact that an individual is or has been one of your customers or has obtained a financial product or service from you . . .”)

• Illinois Banking Act, 205 ILCS 5/48.1(c) (“Except as otherwise provided by this Act, a bank may not disclose to any person, except to the customer or his duly authorized agent, any financial records or financial information obtained from financial records relating to that customer of that bank unless: (1) the customer has authorized disclosure to the person . . .”)