The business of benefits: Compliance considerations for offering employee incentives

In this hyper-competitive talent market as of late, cash (salary) is not always king.  A nice benefits package can be as much of a draw to a certain position or employer as a big fat paycheck.  In addition to health insurance, vision insurance, and a 401(k) match, credit unions also have the unique opportunity to offer employee incentives on banking products, such as loans and deposit accounts.  Since the Compliance Team periodically receives questions about what is permissible, and with open enrollment coming up, now seemed like the perfect time to address some compliance considerations for offering employee perks on credit union products.

So, what kind of perks are we talking about, exactly?  As your HR department knows, there are many options out there for employee perks and incentives, all which may come with their own potential compliance concerns.  However, this post will focus on interest rate discounts for employee loans, and higher APY offerings on deposit accounts opened by employees

In general, section 701.21(d)(5) of NCUA’s regulations prohibits preferential treatment for officials, their immediate family members, and certain individuals with related interests:

(5) Nonpreferential treatment.  The rates, terms and conditions on any loan or line of credit either made to, or endorsed or guaranteed by –


continue reading »