Independent Banker - March 2021 - 27

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and completeness of your messaging.
" Community banks should ensure
their advertising is honest and
transparent, " says Rhonda ThomasWhitley,
ICBA's vice president and
regulatory counsel. " They must
adhere to fundamental technical
rules and established guidelines, such
as prohibitions on using terms like
'free' or 'no cost,' and ensure that
all material information about that
product or service is disclosed clearly
and conspicuously. "
Both Regulation DD and Z stipulate
standards for " clear and conspicuous "
information and " actually available
terms. " The Unfair, Deceptive,
or Abusive Acts or Practices Act,
or UDAAP, has broad coverage
and applies to any inaccurate
information, omitted information
or misinterpretation of information
including advertisements. Whether
the information presented in an
advertisement for a bank product or
service is clearly and conspicuously
presented, is complete and accurate,
and describes the actually available
terms may be a matter to be
determined on a case-by-case basis.
HUD guidelines
The U.S. Department of Housing
and Urban Development (HUD)
provides advertising guidelines for
the Fair Housing Lender/Equal
Housing Lender logotype or tagline
in advertising. The Fair Housing Act
requires all advertising of residential
real estate for sale, rent or financing
contain an equal housing opportunity
logotype, statement or slogan as a
means of educating homebuyers that
the property is available to all persons
regardless of race, color, religion, sex,
handicap, familial status or national
origin. The choice of logotype,
statement or slogan will depend on
the type of media used-visual or
auditory-or, with display advertising,
" [Community banks] must adhere to
fundamental technical rules and established
guidelines ... and ensure that all material
information about that product or service is
disclosed clearly and conspicuously. "
-RHONDA THOMAS-WHITLEY, ICBA
on the size of the advertisement.
With respect to fair lending, a
community bank's advertising should
reflect the population in its market.
It should be inclusive to portray
diversity in images that represent a
variety of genders, ages, ethnicities,
marital statuses and so forth.
" Community banks should ensure
the medium used and content are
reflective of the population in the
market area, " Thomas-Whitley
says. " Even if the advertisement
unintentionally misrepresents the
market area, banks could be exposed
to reputational, regulatory and
substantive consequences. "
FDIC membership
FDIC Rules and Regulations Part
§ 328.3 covers disclosure of FDIC
membership. It addresses the
proper statement, proportions of
the size and print, and the use of
the official advertising statement in
advertisements. It is required for " all
advertisements that either promote
deposit products and services
or promote nonspecific banking
products and services offered by the
institution. " The section also describes
circumstances that do not require
the official advertising statement,
including those advertisements for
nondeposit investment products.
Separate rules outlined in the
Interagency Statement on Retail Sales
of Nondeposit Investment Products
govern those products.
Website and social media
advertising bring unique compliance
challenges. According to ThomasWhitley,
community banks must
recognize that most regulations were
established prior to the growth of
digital media, from bank websites
to social media platforms. Print
advertising may now play a smaller
role in a community bank's marketing
in favor of advertising via websites or
social media. " Every way in which a
community bank is communicating
with its customers or prospective
customers should be assessed from a
compliance perspective, " she adds.
Controlling and managing
advertising compliance demands
a comprehensive approach across
all media channels. Best practices
for compliant advertising include
staff training to raise awareness;
formulating consistent messaging,
especially for promotions that will be
conducted on a broad scale; internal
controls over the advertising process,
including compliance reviews and
third-party vendor management;
and periodic compliance monitoring
and auditing. 
Mary Thorson-Wright, a former Federal
Reserve examiner, is a writer in Virginia.
independentbanker.org Q 27
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Independent Banker - March 2021

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