We are not aware of any limitations on paying referral fees to employees for selling certain types of deposit accounts. While Regulation Z’s loan originator (LO) compensation rules limit referral fees that can be paid to bank employees, those rules apply only to residential loans, and we do not believe that they would apply to deposit account sales. 12 CFR 1026.36.

We are also not aware of any limitations on paying referral fees for credit life insurance, but any employee who receives an incentive for referring credit insurance customers would have to obtain an insurance producer’s license from the Department of Insurance. In Illinois, the Insurance Code permits bank employees to enroll consumers in group credit insurance without obtaining insurance producer licenses, but only if they are not paid any commission, service fee, or other valuable consideration. 215 ILCS 5/500-20(b)(2)215 ILCS 5/500-80(a). The Department of Insurance has published a bulletin explaining how licensing requirements apply to sales of credit and other types of group insurance. CB 2009-04 (May 28, 2009).