Certified Regulatory Compliance Manager (CRCM) — Question 254

Martha Smith of First National Bank is attempting to close a large commercial loan to a manufacturing equipment company. In negotiating the interest rate on the loan Martha states that if the company will move some of its demand accounts to the bank, it could get a lower interest rate. Is this wrong?

Answer options

• A. Yes. It violates the anti-tying provisions.
• B. Yes. It is a restraint of trade.
• C. No, unless moving the accounts is a condition of the loan.
• D. No. The bank may condition the loan on the customer placing a deposit in the bank.

Correct answer: D

Explanation

The correct answer is D because banks are permitted to set conditions, such as requiring customers to open accounts, in exchange for favorable loan terms. Option A is incorrect as it does not apply in this context, and B is not relevant since there is no restraint of trade involved. Option C suggests a limitation that does not reflect the bank's rights to negotiate loan conditions.