When it comes to advertising and marketing, banking institutions have no shortage of rules and regulations governing what they do. Aside from the Federal Trade Commission’s (FTC) exhaustive list of guidelines that apply to all businesses, banks must consider numerous other regulations and statutes specifically targeting how and what they communicate about their products. The resulting interplay between marketing and compliance goals can become confusing and chaotic, to say the least. Understanding the bigger picture and having a list of basic guidelines to follow, however, can go a long way in avoiding this difficult paradox. So, to clear the air and help you get the most out of your marketing efforts, here’s a list of six key tips to remember to keep your bank’s ads and marketing messages in compliance.
Always strive to be clear, concise, and true.
Providing false information about products, services and features, or withholding information that a reasonable consumer would want or need to know should be avoided whenever possible. Not only can this deceive consumers, cause financial harm, and hurt the bank’s reputation, it violates the Dodd-Frank Act of 2010 and Section 5 the FTC Act. Both laws strictly prohibit Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) and place a legal responsibility on banks to follow certain practices to ensure that advertising is truthful and not deceptive. Review the actual law(s) for specific examples if you’re ever in doubt.
For deposit products, make sure to include all the required disclosures.
Whether it’s a checking account, savings account, or other deposit-based product, consumers need to know the specific terms and conditions of what they’re being offered or signing-up for. Under the Truth in Savings Act (TISA), Regulation DD spells out specific requirements for what information to disclose and when to disclose it. For example, a brochure promising an interest rate on an account must visibly state the Annual Percentage Yield somewhere on the same page. In practice, using a Reg. DD checklist to keep track of specific requirements can be a great way to save time and energy, and preserve your sanity.
Loans require specific disclosure too—make sure to include all those necessary.
Loans have their own compliance requirements that you have to consider when you’re creating advertising. Under the Truth in Lending Act (TILA), Regulation Z provides guidelines for the types of disclaimers that are triggered when certain terms are used. There are different sets of rules for mortgage or consumers loans with a fixed term versus open-end revolving loans, including specific language that must be stated depending on the product advertised. Above all, be sure to include the Annual Percentage Rate or APR if you’re planning to advertise any interest rate.
Be sure your advertising represents all types of customers.
When picking images to include in your ads, strive to represent the entire population in your market area, including a variety of ages, races and genders. Under fair lending regulations such as the Equal Credit Opportunity Act, marketing that doesn’t appeal to all your customer segments or that inadvertently excludes certain people consistently can cause your bank to be dinged for discriminatory advertising practices.
Automate the process for sending compliant marketing emails.
Under the CAN-SPAM Act, any email sent for the purpose of advertising or promoting a bank product must adhere to specific requirements. The list is by no means short, and given the immense technical considerations and costs of non-compliance, having an automated system in place is a smart idea.
Don’t forget about compliance when sending text messages.
While most regulations don’t specifically address text messages, it’s a good practice to ensure you’re following the requirements we’ve outlined above when advertising products or services via text messages.
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