It is possible that your contemplated promotion could create fair lending concerns, but a full analysis would require additional facts comparing your bank’s customer base with the closing bank’s customer base. Although a customer base is not a protected class, a promotion offered only to customers of a particular bank conceivably could have a disparate impact on a protected class.

For example, if the closing bank’s customer base consists predominantly of a certain race or ethnicity, the promotion might disproportionately favor that race or ethnicity. While the planned promotion would apply only to deposit accounts, and the fair lending laws apply only to credit products, an affected person could attempt to creatively press for a disparate impact analysis in this context (for example, if you offer overdraft protection on your deposit accounts). And if your deposit accounts do include one or more credit features, then the Equal Credit Opportunity Act and other fair lending laws also would be 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 promotion. 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.

While we cannot address the use of the closing bank’s name in advertisements, as we do not specialize in trademark law, we do note that a business can legally use a competitor’s mark or brand as necessary to fairly and accurately describe its products, or to fairly and accurately compare its products and services to those of the competitor. Again, we recommend consulting with your bank’s counsel on this question.

For resources related to our guidance, please see:

• 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.”)