Using the Term "Free" to Describe Account Services or Features
Written by Steve Van Beek
There have been quite a few articles (and blog posts) on the future of "free" checking. Â It is certain that downward pressure on non-interest income will cause some institutions to move away from "free" checking. Â And, you can bet that the CFPB will be keeping a close eye on advertisements that could potentially mislead consumers/members.
We have gotten a few questions about calling a particular service or feature "free" rather than calling the checking product "free."  The official staff commentary to Part 707.8 of NCUA's Truth in Savings regulation includes the answer:
"6. Specific account services. Credit unions may advertise a specific account service or feature as free as long as no fee is imposed for that service or feature. For example, credit unions offering an account that is free of deposit or withdrawal fees could advertise that fact, as long as the advertisement does not mislead members by implying that the account is free and that no other fee (a monthly service fee, for example) may be charged."
While the example used isn't exactly up to date (a better example might be "free" billpay), the staff commentary specifically allows a credit union to describe a particular account service or feature as "free" even though other fees might apply to the account. Â