Pub. 13 2018-2019 Issue 3

WWW.NEBANKERS.ORG 20 The Dos and Don’ts of Deposit Advertising Daniela Clark, Compliance Alliance A DVERTISING RULES CAN BE CONFUSING. THE advertising rules for banks are set out in several different regulations and overseen by several different regulatory agencies. Generally, the CFPB has been given regulating power over some advertising to consumers, includ- ing the advertising requirements under RegDD. The FDIC governs when the FDIC logo and statement must be used. Regulation DD defines an advertisement as a commercial message in any medium, including social media, that invites, offers, or generally an - nounces the availability or terms of an existing or new account. 1 A deposit account is a time, demand, savings, or NOW account, including deposit ac- counts opened as a condition of obtaining a credit card, foreign currency accounts, IRAs and SEPs, PODs and “Totten trusts”, and an account that is held by or for a deposit broker, if interest in the ac- count is held by or offered to a consumer. 2 An advertisement may not be misleading or misrepresent the deposit agreement. 3 It should not state that an account is “free”, “no cost”, or “fees waived” if it has any maintenance or activity fees. Maintenance or activity fees are 1) fees for not meeting a minimum balance or exceeding a number of transactions, 2) reasonably expected transaction and service fees, 3) flat monthly service fee, or 4) fees to deposit, withdraw, transfer funds, or per-check or per-transaction charges. A bank may, however, advertise that there are no deposit or withdrawal fees, if it is clear that a monthly service fee, for example, may be charged. If an account is free for a specific amount of time, it may state that it is free for a specific time. 4 Annual Percentage Yield must be stated at least once as “Annual Percentage Yield” and then may be referred to as APY. It also “triggers” additional terms (“trigger terms”) that must be included in the advertisement. If there is a variable rate, the advertisement should state that the rate may change after the account is opened. The advertise- ment 5 should state the period of time the APY will be offered or is accurate. For example, 12% APY accurate as of 8/10/2018. Any minimum balance