Does the Bank Bribery Act prohibit bank employees from receiving referral fees?

The Bank Bribery Act (18 U.S.C. § 215) applies to corrupt intent — bribes to influence bank decisions. It does not prohibit bank employees from receiving legitimate referral compensation for introducing clients to non-bank lenders. However, many institutions have internal policies that require disclosure or approval. Consult your compliance officer.

Will referring clients hurt my CRA rating?

Referring declined applicants to alternative lenders can be viewed positively for CRA purposes. It demonstrates community service by ensuring declined applicants receive assistance rather than being left without options. Document these referrals appropriately with your CRA officer.

Can my bank be liable if the referred client has a bad experience with the MCA?

No. You are facilitating an introduction, not acting as an agent or co-lender. The funding agreement is between the client and T.A.G. exclusively. Your liability is limited by your role as a referrer.

Does referring clients constitute a violation of fiduciary duty?

Referral is not fiduciary advice. You are providing information about an available resource. Disclose the referral arrangement to the client, make clear it is non-obligatory, and you have met the standard of care for a referral context.

What happens if the client I referred does not qualify for MCA?

If a referred client does not qualify, T.A.G. Business Funding informs the client directly. The banker is notified and can follow up. No referral fee is earned for declined applications — fees are paid only when funding closes. There is no risk to the banker for referring clients who ultimately do not qualify.

Banker Referral FAQ — Compliance, Regulation & Process

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Regulatory & Compliance

Does the Bank Bribery Act prohibit me from receiving a referral fee?

The Bank Bribery Act (18 U.S.C. § 215) is targeted at corrupt intent — payments made to influence a banking decision in violation of the bank's duty. It does not prohibit bank employees from receiving legitimate referral compensation for connecting clients with non-bank lenders. However, your institution's internal policy is likely more restrictive than the statute. Most banks require at minimum internal disclosure; some require prior compliance approval. Start with your compliance officer or HR.

T.A.G. can provide a written program description for your compliance officer upon request. This helps most applications move faster.

Does this need to be reported as an outside business activity?

Yes, in most institutions. Bank employees are typically required to disclose outside compensation arrangements, including referral fees. This is independent of whether the activity is permitted — most institutions permit it upon review. File the disclosure with HR or compliance before beginning any referrals. The process typically takes 1–2 weeks.

Could referring clients help or hurt our CRA rating?

Referring declined applicants to legitimate alternative lenders is generally viewed positively in CRA examinations under the "community development service" component. It demonstrates that the institution is helping community businesses access capital even when they can't serve the client directly. Document these referrals through your CRA officer. This does not substitute for CRA lending activity but is a supplementary positive factor.

Am I creating any liability for the bank by making a referral?

In a properly structured referral, no. You are facilitating an introduction — not acting as an agent, co-lender, or underwriter. The funding agreement is exclusively between the client and T.A.G. Your bank has no contractual relationship with the outcome. Ensure your referrals include clear disclosure language that makes this distinction evident to the client.

Fees & Payment

Can the referral fee be paid to the bank instead of to me personally?

Yes. Some institutions prefer that referral fees flow to a department budget or charitable fund rather than to the individual employee. T.A.G. can structure fees to a business entity, department account, or individual as your compliance arrangement requires. Contact us to discuss the structure before registering.

How much are referral fees and when are they paid?

Referral fees are up to 2% of the funded advance amount (per your partner agreement). Examples:

$50,000 advance at up to 2% = up to $1,000
$100,000 advance at up to 2% = up to $2,000
$200,000 advance at up to 2% = up to $4,000

Fees are paid within 5 business days of funding via ACH or check. A 1099-NEC is issued annually for fees exceeding $600.

The Client Experience

What will my client experience after I refer them?

Your client will:

Complete a 10–15 minute online application
Upload 6 consecutive months of bank statements
Receive an underwriting decision within 24–48 hours
Review the term sheet — no obligation to accept
Receive funding within 24–48 hours of acceptance

T.A.G. does not solicit your client for other bank relationships or share their information with your institution.

Will T.A.G. compete for my deposit relationships or cross-sell banking products?

No. T.A.G. is a funding specialist, not a bank. We do not offer deposit accounts, checking accounts, savings products, or any banking services. Your deposit relationship with the client is unchanged. In fact, many successfully funded clients deepen their banking relationship after accessing capital to grow — and your institution is already positioned as the partner who helped them.

What if my referred client has a bad experience or disputes the advance terms?

T.A.G. handles all disputes, modifications, and service issues directly with the client. You are not a party to the transaction and have no responsibility for its performance. If a client contacts you about an issue with the advance, direct them to T.A.G.'s client services team. Protecting your client from bad outcomes starts with the Client Qualification Checklist — don't refer clients who are poor candidates.

Banker Referral FAQ

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