WASHINGTON (12/22/14)--The concept of "free" checking accounts comes with plenty of requirements from federal regulators, a concept the Credit Union National Association's CompBlog examined in a recent entry.

Colleen Kelly, CUNA's senior assistant general counsel for federal compliance, broke down the requirements for financial institutions to claim an account is "free."

"Earlier this year the Consumer Financial Protection Bureau (CFPB) penalized a bank for advertising a 'free checking' account without disclosing its minimum activity requirement in the ad," Kelly wrote. "The minimum activity requirement was explained in the one-page disclosure provided to each customer, but not in the advertisements."

The bureau required the bank in question to repay customers $2.045 million in maintenance fees, as well as a $200,000 civil money penalty for violating the prohibition of unfair, deceptiveor abusive actions or practices and the CFPB's Truth in Savings regulation.

The bureau's regulation prevents credit unions from describing accounts as "free" or "no cost" if any type of maintenance fee is charged on the account.

These can include:

• Any fee imposed if a minimum balance requirement is not met, or if the member exceeds a specified number of transactions;
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• Transaction and service fees that members reasonably expect to be imposed on an account on a regular basis;
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• A flat fee, such as a monthly service fee; and
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• Fees imposed to deposit, withdraw or transfer funds, including per-check or per-transaction charges.

Kelly lists several types of fees that are not considered maintenance fees, including check printing fees, balance inquiry fees, ATM fees and stop payment fees.