April 26 2017

5 Compliance Rules for Bank and Credit Union Digital Marketers

Most financial services marketers have experienced the heartache of having their perfectly crafted campaigns ripped apart by their legal or compliance teams. Marketing financial services products is a highly-regulated practice, and for good reason. The key is to understand top advertising regulations so that you can proactively strategize and create around them rather than having them stifle your creativity. Explore the top five advertising regulations that financial institutions must follow online. 

1. Truth in Savings Act - Regulation DD: Deposit Accounts 

Banks, but not credit unions, need to abide by as Regulation DD, which implements the Truth in Savings Act (TISA). This regulation is meant to give consumers specific details about deposit accounts so they can make an informed choice. Deposit accounts include checking accounts, savings accounts, CDs, money market accounts, and variable rate accounts. 

At a high level this act states that banks cannot mislead consumers about the contract of the account, and must disclose key information. If the ad or post mentions a trigger term like "bonus" or "APY," then subsequent details must be disclosed, at least one click away from the original ad or statement. Banks must also not use the word, “free”, as in a free checking account if there could be any maintenance or activity fees imposed on the account. If the bank is advertising their overdraft services, then additional disclosures need to be displayed. 

To illustrate, if you put out a social media post that promotes a $300 bonus for opening a new account on Facebook, then to be compliant, that post needs to have a link to “Learn More”, which leads consumers to a page on your site that outlines all terms and conditions, in a readable font size. 

2. Deposit or Share Insurance: Advertising the Institution or Deposit Accounts

For banks that are advertising a deposit account, or advertising the Bank itself, a Member FDIC statement needs to be present within the ad or post. This can be displayed as text or the Member FDIC logo can be used. Member FDIC shouldn’t be used when the bank is advertising or posting about non-deposit related products, like investments or insurance. 

Credit unions that are insured by the National Credit Union Administration must include the statement "Federally insured by NCUA" or the logo within their ads and content. Like any rule, there are exceptions, as listed in CUNA’s training

3. The Not-Not-Not Disclosure for Investments

Alternatively, if a bank produces content or advertising about investment or insurance-related products, then the Member FDIC statement cannot be used, and instead, a disclosure, affectionately referred to in the banking industry as the “not-not-not” or “not-not-may” disclosure, needs to be displayed. Investing falls into a different category, and is subject to more stringent regulations. Your legal and compliance team will provide the exact verbiage required for your institution, but typically it follows a convention like the following example for a Bank: 

Investment and insurance products are:
•    Not guaranteed by the Bank
•    Not FDIC Insured
•    Not a Deposit
•    Not Insured by Any Federal Government Agency
•    May Lose Value Including Loss of Principal

4. Fair Lending Laws 

Bank and credit union marketers need to abide by fair lending laws, including Regulation B, which implements the Equal Credit Opportunity Act and the Fair Housing Act. These regulations prohibit discriminating against people or discouraging certain people to apply for credit or residential real-estate related transactions and loans, like mortgages or home equity loans or lines of credit. Financial institutions need to show diversity in their marketing and should select imagery that represents a variety of ages, ethnicities, marital statuses, genders and so forth. 

Both credit unions and banks must include the Equal Housing Lender logo within their advertising and digital content that markets a loan to buy, construct, improve, repair or maintain a home. It’s also required to archive any prescreened criteria for solicitations. When it comes to social media, institutions shouldn’t use any information found on personal social media profiles when making credit decisions, as that could constitute as discrimination. 

5. Community Reinvestment Act

Banks that are subject to comply with the Community Reinvestment Act must show that they are helping meet the credit needs of those within their footprint, regardless of income level. Although not an advertising regulation, this is important to be aware of because many banks create content on their blog or resource center which may receive positive consideration under the CRA Act. Financial literacy or education, credit counseling, home buyer programs and certain community service activities are examples of bank support for CRA, as outlined by the OCC’s fact sheet. Marketers should also archive any related comments received by the public that are from social media, their blog, or other online channels that speak to how the Bank is helping their community meet their credit needs. The bank’s response communications also need to be archived. 

Being aware of these key compliance rules will help in executing your marketing campaigns across your digital and print tactics – from your website and social media presence to display and print advertising. Remember that these regulations are in place to protect consumers, a goal that both legal/compliance and marketing professionals can all agree upon. 

Note: This article does not constitute legal advice, and has not been authorized by legal or compliance professionals. The content in this article is based on ZAG Interactive’s experience working with hundreds of banks and credit unions, as well as learnings from personnel who have previously worked for financial institutions in a marketing capacity.

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