Marketing is proposing sending a survey to new customers after they have opened an account which will ask them to rate their experience. As long as we do not promote any products, an it is strictly information gathering, do you think CAN SPAM would apply? Should we ask these customers to "opt in" to emails from us to cover ourselves?

There are no restrictions against a company emailing its existing customers or anyone who has inquired about its products or services, even if these individuals have not given permission, as these messages are classified as "relationship" messages under CAN-SPAM

The "relationship message" exemption only applies to emails relating primarily to products and services for which the customer has already signed up. Promotion of other products or services would be covered.

The broadest exemption, however, is for communications within closed systems. That means you can use the messaging system inside your home banking system without any concern for CAN-SPAM.

I know the broadest exemption is within closed systems....but I'm taking this a step further....does CAN-SPAM apply to e-mail communications sent to bank employees using their bank e-mail addresses. For instance, if the bank wants to offer its employees a deposit or credit offering and sends out a distribution via bank employee e-mail. I would like to think this is similar to a closed system in that 1) it is not the employees personal e-mail address and 2) the e-mail address actually belongs to the bank...so you can the bank as sender sending an e-mail communication to e-mail addresses technically owned by the sender. Some thoughts.

I would say you are clearly not in a closed system. The fact that the bank "owns" the email doesn't in my mind excuse the fact that the bank is contacting customers about customer accounts.

So instead of treating this as a communication of an employee benefit sent to all employees via their work e-mail...basically the bank offers all employees a no-interest clothing loan annually with payroll deductions...the employee can opt in or opt out of the program, this would be viewed as an email solicitation subject to CAN-SPAM because employees are in essence, customers of the bank. Is that correct?

What you describe here seems less of a CEMM, which is defined as "The term ‘‘commercial electronic mail message’’ means any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service (including content on an Internet website operated for a commercial purpose)."

The original question "the bank wants to offer its employees a deposit or credit offering" sounded more like banking products.

I guess I'm still confused....it is a credit offering....it's an interest free clothing loan....but it is only offered to bank employees annually. Employee Resources would normally send out an email using the employees work email asking if the employee wants to participate in the clothing loan this year and for what amount..we offer a $300 or $600 option. The employee could also decline. In the past, the employee responded via email...the dollars were direct deposited and a payroll deduction was put in place to repay the loan. It was rather straight forward and simple. We've now been advised that this should be a Reg Z covered loan as opposed to an employee benefit...so we started to take a closer look and when we started to talk about Reg Z and disclosures it led into E-Sign so that all employees could get their disclosures electronically and with E-Sign came the talk of CAN SPAM and whether or not we could even offer the employee a clothing loan via company email without complying with CAN SPAM....if you could share more of your thoughts I'd be most appreciative.

Reminds me of a saying my old bank president had, "if it were easy, monkey's would be doing it."

Applicable to Reg Z - most likely but I don't know your terms:
§226.1(c)In general, this regulation applies to each individual or business that offers or extends credit when four conditions are met:

(i) the credit is offered or extended to consumers;

(ii) the offering or extension of credit is done regularly;1

(iii) the credit is subject to a finance charge or is payable by a written agreement in more than four installments; and

(iv) the credit is primarily for personal, family, or household purposes.

Are employees consumers - yes.

Is bank email exempt from CAN SPAM - no.

The service here - an interest free loan.

You can send the message, you just have to include certain disclosures and not send it if they opt-out.

Can you do E-Sign loans? You are free to, but maybe they should drop by the loan area or HR and sign an agreement instead.

If you provided the clothing and had them sign a payroll deduction form, I would see that differently than a loan, interest free or not.

Just remember, you're the messenger here, not the reg writer. And this is likely a low-risk issue, until you fire an employee and they get an attorney and all this comes out and is added to a suit. (That suit won't be interest free.)

Andy, if this is an internal bank communication to the employees, CAN-SPAM does not apply - would it???.

If it did, I'm sure that most employees would opt-out of all employer e-mails

Coverage of C-S hinges on the definition of "Commercial Electronic Mail Message." I don't recall any exemption for spam sent to the spammer's staff, and any email message that goes out onto the internet directed to an address such as Bank_employee_9999@mybank.com would seem to meet the definition. If the bank uses a closed internal system that routes messages without sending them to an external internet server, then the messages do not meet the definition.

But how is the annoucement of an annual employee benefit a "commercial message"?

Doesn't the message promote a consumer credit product to a target audience?

From the FTC's Bureau of Consumer Protection, CAN-SPAM Act: A Compliance Guide for Business:

http://business.ftc.gov/documents/bus61-can-spam-act-compliance-guide-business


Q. How do I know if what I’m sending is a transactional or relationship message?

A. The primary purpose of an email is transactional or relationship if it consists only of content that:

4.provides information about an employment relationship or employee benefits;

So...it comes down to the question--
Is a preapproved 0% APR consumer loan:
a. an employee benefit, or
b. a product offering

I can buy both arguments. It shouldn't be difficult to talk a regulator out of citing the practice.

I have always viewed this as an employee benefit. I don't see how anyone could really expect a business to be required to let employees opt out of those communications.

If it was a clothing allowance (not repayable), I wouldn't look at it twice. The only reason I raised the question is that banks are in the business of lending money and this is a loan which must be repaid. Consumer protections regs (B and Z, for example) define consumer credit in ways that would most likely cover these loans--undermining the argument that they are an employee benefit and not consumer credit.

I agree with the fact that it is a loan but just can't see the opt out making any sense in these cases. If opt out applies, it would probably be cheaper in the long run to just give a clothing allowance once you factor in maintenance of opt out lists, the loan disclosures, etc.

I would not argue that the loan would not be covered under the normal consumer regulations. And Richard, I would not argue that banks are not in the business of making loans. However, they normally do not make them at 0% interest. So, in my pea-brain anyway, I see this as nothing more than a communication reminding employees of a specific employee benefit, that it is available again this year to the employees, and how they can go about taking advantage of it.

This is one of those quirky little cases where you can't shake loose from the definitions that control coverage--more of an academic issue than a significant risk. If it was my bank doing this, I would point out the tiny risk, advise that paper delivery would be a no-risk alternative, and let them do what they wanted. Of greater concern, I'd assure that employees getting loans also get TIL disclosures.

I hadn't thought about this for decades, but during my tenure at the Fed (circa 1976) we discovered that our HR department occasionally made small payroll advance loans to staff members without the benefit of TIL disclosures. Our lawyers and I fixed the problem immediately--it wouldn't have looked good for the Fed to violate Reg. Z!

Richard, sounds similar to the issue of 401K loans that slipped under the Reg. Z radar for a number of years. I think that from a risk standpoint the CAN-SPAM issue is pretty much a push, the Reg. Z issue is not.

Agreed.