I hope you all took time out of your day on Thursday to celebrate the one year anniversary of Dodd-Frank. On this day, the CFPB spread its wings and Regulation Q was repealed. The Durbin Amendment was also scheduled to kick in, but the actual implementation of interchange fee reform has been pushed to October 1.
Over the last few months, the most frequently asked question in my client meetings has been something akin to “What are your other banks doing about commercial interest account pricing?”.
My answer: Most community banks are asking this question but are waiting to see what the big banks do before any major product rollout.
Thursday morning, as I drove to the office, I heard a new Capital One add on the radio. They were promoting their new business checking product. Capital One business customers in all their markets except Louisiana can earn a promotional rate of 1.10% for the first year, but all those loyal Hibernia customers in Louisiana who stuck around after the acquisition only earn 0.50%. I guess that when you already have the state’s largest deposit market share (20% of total LA deposits as of June 2010), you don’t have to pay up for deposits.
As with most highly promoted products, there are lots of strings attached to this account. In case you don’t want to read the fine print on Capital One’s website, here are the details:
- 25 transactions per month required to earn promotional rate (default rate is 0.05%)
- Promotional rate only applies to balances between $10,000 and $100,000.
- All other funds earn a tiered promotional rate of 0.05% to 0.50% (0.05% to 0.25% in LA)
- $8.00 monthly maintenance fee if you don’t maintain an average daily balance of $10,000
- Transactions over 300 per month are charged $0.17 each
- Existing customers must deposit $10,000 of new money within 30 days or promotional rates disappear
I haven’t seen any other big banks roll out an aggressive product, yet. If you have, please send details and I will begin compiling a list for future dissemination. In the meantime, be sure you have some sort of product to offer if asked, and make sure your front line team members know about it.
