I am in the process of completing a review of NDIP. Our third party vendor handles advertisements. I have a copy of an annuity lobby rate advertisement that I am checking. At the far right hand corner there are 2 circles... one with the word FDIC and the other Bank. The circle has a line going through the words Bank and FDIC indicating Not FDIC insured and Not a Bank product.

I do not feel this is very clear to the average person. What do you think? Have you seen it done this way?

I've never seen an ad like that before. This is only an opinion, but I wouldn't risk letting an ad like that go out. It not only might not be clear to the average bank customer, but I don't know that it would appear clear enough for the regulatory examiners either.

I agree that this is not acceptable. See the Joint Interpretations of The Interagency Statement on Retail Sales of Nondeposit Investment Products.

Quote:

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The banking agencies have been asked whether shorter, logo format disclosures may be used in visual media, such as television broadcasts, ATM screens, billboards, signs, posters, and in written advertisements and promotional materials, such as brochures. The text of an acceptable logo format disclosure would include the following statements:

• Not FDIC Insured

• No Bank Guarantee

• May Lose Value

The logo format disclosures would be boxed, set in bold face type, and displayed in a conspicuous manner. The full disclosures prescribed by the Interagency Statement should continue to be provided in written acknowledgement forms that are signed by customers.

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It also shows the box, but I couldn't get it to print here.

One of my former employer's provided similar signs for the desks of the NDIP sales staff... they thought it was amusing. The FDIC examiner did not.

An annuity is considered an insurance product. The abbreviated disclosures permitted by the 1994 and 1995 interagency interpretations on nondeposit investment products (NDIPs) were superceded by the consumer protections in sales of insurance products regulations. If you look at 12 CFR 536.40(c)(5) and (d) you will see that you can use the following disclosures in visual media, usch as television broadcasting, ATM screens, billboards, signs, posters, and written advertisements and promotion materials, as appropriate and consistent with paragraphs (a) and (b) of section 536.40:

* NOT A DEPOSIT
* NOT FDIC-INSURED
* NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
* NOT GUARANTEED BY THE SAVINGS ASSOCIATION
* MAY GO DOWN IN VALUE

I believe the other agencies have similar wording.

We are redesigning our web site and are adding pages to promote some NDIPs. We will be promoting fixed annuities, self-directed brokerage, and mutual funds on our web site. The brokerage pages and the mutual funds page do not have to say all of the above disclosures because OTS Thrift Bulletin (TB) 23-2 and OTS TB 23-3 apply to them. TB 23-3 permits the use of boxed logo format disclosures that would be set in bold face type. The format was a rectangle divided into two sections. On the left side of the rectangle, it says "NOT FDIC-INSURED" with each word of this phrase displayed on a separate line. On the right side of the rectangle it says "May lose value" on one line and "No bank guarantee" below that. We have chosen to use the wording for the disclosures required by 536.40 on all pages of the web site were NDIPs are mentioned and not just for insurance products.

Does anyone think this is a problem?

We also made sure that the phrase "Member FDIC" does not appear on any of these pages.