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Question & Answer
Question: We have a contract with a third party vendor to sell mutual funds in the bank lobby. We don't have a clearly separate area to place this vendor. What can we do to satisfy the requirement that the mutual funds sale area be clearly separate from the bank's deposit taking functions?
Answer: The reason for the separation requirement is to avoid implying to the customer that the product being sold is a bank product with the guarantees of safety that FDIC insurance provides. The goal of vendor placement is to communicate this message to customers and to minimize or totally prevent customer confusion.
When you don't have a clearly separate area, you should create the impression of different space. In fact, creativity is encouraged. Ironically, the more you use labels and signs to indicate the mutual funds area the more you call attention to it. It helps sales and it complies! Use the vendor's signs - which hopefully look different from the bank's signs - to delineate the area and identify it. The fact that this calls attention to the area is fine, as long as it also makes it look different. You can also use plants and similar methods to set the investment area apart visually.
Copyright © 1997 Compliance Action. Originally appeared in Compliance Action, Vol. 2, No. 16 & 17, 12/97
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