Whether the gift card is donated to the school or to the individual teacher is up to the bank. If donating to the school, it may be possible to designate that the gift card must be used in a particular teacher’s classroom, but that will depend on the school district’s policies. We recommend contacting the local school board for more information about this. Notably, there are third parties that handle donations to teacher’s classrooms, such as DonorsChoose.org, FundmyClassroom.com, AdoptaClassroom.org, and many more, which your bank may wish to explore as well.

We would recommend treating the $100 donation as an account bonus, even if your bank will be donating the gift cards directly to a teacher’s school. Since the gift cards donations are being offered to potential customers in exchange for their business, we believe they would fall under Regulation DD’s definition of an account “bonus,” in which case Regulation DD’s disclosure and advertisement requirements would apply equally to the $100 whether given to the customer or donated on the customer’s behalf.

We are not aware of any requirements to provide disclosures to the schools that would be receiving the gift cards. We do recommend inquiring about possible disclosure requirements from your local school boards and any third party websites used for the donations, if applicable.

In general, there could be some concerns under the fair lending laws when offering a promotion to a particular profession or occupation. Although a profession such as teaching is not a protected class, a promotion offered only to teachers could have a disparate impact on a protected class. For example, if the majority of teachers in your area are female, the promotion might disproportionately exclude males, or vice-versa.  While the planned promotion would apply only to deposit accounts, and the fair lending laws per se apply only to credit products, an affected person could attempt to creatively press for a disparate impact analysis in this context. And if the deposit accounts do include one or more credit features, then the Equal Credit Opportunity Act and other fair lending laws would be directly applicable.

We recommend consulting with your bank counsel on your question and at least being sensitive to the potential for disparate impact scrutiny of the promotional program. The FFIEC Interagency Fair Lending Procedures include a helpful explanation of the disparate impact concept and how institutions can mitigate the risks of a disparate impact finding. The FFIEC procedures state that a policy resulting in a disparate impact can be justified by a “business necessity,” with documentation of any factors that went into deciding the policy. Even if the deposit accounts would not fall under the definition of “credit” because they lack any credit features, the FFIEC’s approach could be helpful in understanding disparate impact in the context of deposit accounts.

For resources related to our guidance, please see:

• Regulation DD, 12 CFR 1030.2(f) (“Bonus means a premium, gift, award, or other consideration worth more than $10 (whether in the form of cash, credit, merchandise, or any equivalent) given or offered to a consumer during a year in exchange for opening, maintaining, renewing, or increasing an account balance. . . .”)

• Regulation DD, 12 CFR 1030.4(b)(6) (Savings account disclosures must include “the amount or type of any bonus, when the bonus will be provided, and any minimum balance and time requirements to obtain the bonus.”)

• Regulation DD, 12 CFR 1030.8(d) (“. . . if a bonus is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously: (1) The ‘annual percentage yield,’ using that term; (2) The time requirement to obtain the bonus; (3) The minimum balance required to obtain the bonus; (4) The minimum balance required to open the account, if it is greater than the minimum balance necessary to obtain the bonus; and (5) When the bonus will be provided.”)

• Equal Credit Opportunity Act, 15 USC 1691 (“It shall be unlawful for any creditor to discriminate against any applicant, with respect to any aspect of a credit transaction—(1) on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract); (2) because all or part of the applicant’s income derives from any public assistance program; or (3) because the applicant has in good faith exercised any right under this chapter.”)

• Equal Credit Opportunity Act, 15 USC 1691a(d) (“The term ‘credit’ means the right granted by a creditor to a debtor to defer payment of debt or to incur debts and defer its payment or to purchase property or services and defer payment therefor.”)

• FFIEC Interagency Fair Lending Procedures, page iv (“When a lender applies a racially or otherwise neutral policy or practice equally to all credit applicants, but the policy or practice disproportionately excludes or burdens certain persons on a prohibited basis, the policy or practice is described as having a ‘disparate impact.’ . . . The fact that a policy or practice creates a disparity on a prohibited basis is not alone proof of a violation. When an Agency finds that a lender’s policy or practice has a disparate impact, the next step is to seek to determine whether the policy or practice is justified by ‘business necessity.’ The justification must be manifest and may not be hypothetical or speculative. Factors that may be relevant to the justification could include cost and profitability. Even if a policy or practice that has a disparate impact on a prohibited basis can be justified by business necessity, it still may be found to be in violation if an alternative policy or practice could serve the same purpose with less discriminatory effect.”)