$10 Sure Thing

Biting back at regulations

It was precisely the sort of bureaucratic nonsense that drives U.S. businessmen wild and costs the consumer uncounted millions each year. Because of an act of Congress that became effective last year, banks belonging to the Federal Reserve system were required to explain to their customers the intricacies and protections built into the method of paying bills and making other money transfers by means of electronic banking.

Like other financial institutions, Minneapolis' Northwestern National Bank had to draw up and mail a pamphlet explaining the new rules, known as Amended Regulation E. to its 120,000 customers. Demurring, the bank argued that it was following the regulations already and that its customers were not interested in the minutiae of Government rules. Brushing aside Northwestern National's objections, the Fed told it to get on with the job.

Paul M. Eisen, the bank's senior vice president for marketing, had the document "translated" from federalese into passable English. And then, because he was convinced that no customer would wade through the booklet, Eisen inserted a readership test. In 100 of the 120,000 copies, he placed a special paragraph that read: "Any customer who receives a disclosure that includes this paragraph, can get $10 simply by writing 'regulation' and the customer's name and address." At a cost of $69,000, the bank in May and June sent out the 4,500-word pamphlet on Regulation E. So far, not one person has collected the $10.

This file is automatically generated by a robot program, so viewer discretion is required.