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#2115752 - 01/26/17 10:28 PM
Advertising a CD rate on the bank
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Junior Member
Joined: Feb 2009
Posts: 49
Biloxi, Mississippi
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We have one line on the bank digit sign reading " Celebrate 2017 with our new 15 month 2.017% CD". Is this permissible in the exceptions for 230.8?
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#2115795 - 01/27/17 02:01 PM
Re: Advertising a CD rate on the bank
Tabbetha, CRCM
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Junior Member
Joined: Feb 2009
Posts: 49
Biloxi, Mississippi
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The 2.017% is not the APY, it is the interest rate. I can use three decimals for the interest rate and on the TISA, the APY is 2.04% A digit (sorry for the typo) i.e digital meaning the electronic sign in front of our bank. I was thinking there were special exceptions for electronic signage and need more clarification of what is accepted.
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#2171231 - 03/31/18 02:43 PM
Re: Advertising a CD rate on the bank
Tabbetha, CRCM
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Gold Star
Joined: Apr 2015
Posts: 346
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I have been researching Reg DD for what is required on advertising CD rates in newspapers, social media, and billboards.
Can someone help me with how to disclose this in layman's terms without getting wordy, especially for the second bullet point which is required for billboard ads?
• A statement that fees could reduce the earnings on the account. • If the account has a term greater than one year where the interest is not compounded on an annual or more frequent basis and interest must be paid out at least annually, a statement that interest cannot remain on deposit and that a payout of interest is mandatory.
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#2171510 - 04/03/18 03:30 PM
Re: Advertising a CD rate on the bank
Tabbetha, CRCM
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Diamond Poster
Joined: Jul 2007
Posts: 1,016
Pac NW
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Fees could reduce earnings on the accounts Interest compounded [some term greater than one year] Interest paid out [some term]. Interest paid on the deposit cannot remain on deposit. An annual interest payout is mandatory.
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#2171683 - 04/03/18 11:40 PM
Re: Advertising a CD rate on the bank
David Dickinson
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Gold Star
Joined: Apr 2015
Posts: 346
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We do have CDs with maturities greater than one year which we require interest to be paid by check, transfer to another account, or capitalized at least on an annual basis. The only fee we have is a prepayment penalty, so just to clarify, do we not need these in either a newspaper ad or billboard?
• A statement that fees could reduce the earnings on the account. • If the account has a term greater than one year where the interest is not compounded on an annual or more frequent basis and interest must be paid out at least annually, a statement that interest cannot remain on deposit and that a payout of interest is mandatory.
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#2228651 - 01/09/20 05:57 PM
Re: Advertising a CD rate on the bank
David Dickinson
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Diamond Poster
Joined: Oct 2015
Posts: 1,668
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My understanding is that if the outdoor ad is actually attached to the building of the Bank, then "Member FDIC" is not required.
(d) Types of advertisements which do not require the official advertising statement. The following types of advertisements do not require use of the official advertising statement:
(3) Signs or plates in the insured depository institution offices or attached to the building or buildings in which such offices are located;
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#2228658 - 01/09/20 06:38 PM
Re: Advertising a CD rate on the bank
Compliance NABW
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Gold Star
Joined: Jan 2004
Posts: 317
USA
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I agree with your conclusion.
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CRCM, CAFP, DAD
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#2229988 - 01/30/20 10:39 PM
Re: Advertising a CD rate on the bank
Tabbetha, CRCM
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Diamond Poster
Joined: Oct 2015
Posts: 1,668
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@David - It's in the Advertising exemption section. How do you determine that it is specific to the name of the Bank?
(a) Advertisement defined. The term "advertisement," as used in this part, shall mean a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business.
(d) Types of advertisements which do not require the official advertising statement. The following types of advertisements do not require use of the official advertising statement:
(3) Signs or plates in the insured depository institution offices or attached to the building or buildings in which such offices are located;
I do agree; however, that it might not get you far with examiners, as it comes down to how the word "Signs" is interpreted.
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#2230034 - 01/31/20 05:42 PM
Re: Advertising a CD rate on the bank
Tabbetha, CRCM
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10K Club
Joined: Oct 2000
Posts: 10,179
Toano, VA
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I LOVE this kind of discussion: "it all depends on what 'is' is!"
12 C.F.R. § 328 neither provides an onboard definition of the word "sign" nor assigns interpretive authority to an government official or agency. Whenever there's no official definition or interpretation, the effect of the law or regulation turns on the dictionary definition of the word, and possibly its common usage. Webster defines "sign" (in relevant part) as: "...a display (such as a lettered board or a configuration of neon tubing) used to identify or advertise a place of business or a product."
Looks like a stand-off! Examiners might say your "display" isn't a "sign" and can't be exempt from the normal rule for advertisements. Webster, on the other hand, says that a display that advertises a product IS a "sign."
To me, it would come down to: do I want to pick a fight over this? There are good arguments on both sides, but what David (as a once-upon-a-time FDIC examiner) might know is that the Corporation has issued informal guidance on these sorts of questions.
_________________________
...gone fishing.
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#2230035 - 01/31/20 05:44 PM
Re: Advertising a CD rate on the bank
Tabbetha, CRCM
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Power Poster
Joined: Nov 2004
Posts: 6,685
Illinois
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As the message in front of the church said, "If you're waiting for a sign...this is it!"
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Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria! www.tcaregs.com
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#2230036 - 01/31/20 05:47 PM
Re: Advertising a CD rate on the bank
BrianC
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10K Club
Joined: Oct 2000
Posts: 10,179
Toano, VA
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"If you're waiting for a sign...this is it!" I believe this message meets both of Webster's points!
_________________________
...gone fishing.
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#2230079 - 01/31/20 10:30 PM
Re: Advertising a CD rate on the bank
Richard Insley
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Diamond Poster
Joined: Oct 2015
Posts: 1,668
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Thank you for your input, Richard. Sounds like I can rely on Webster if need be . I was an OCC examiner, but we never really looked at Compliance beyond BSA/AML, SCRA, and Flood.
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#2230083 - 02/01/20 12:39 AM
Re: Advertising a CD rate on the bank
Compliance NABW
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10K Club
Joined: Oct 2000
Posts: 10,179
Toano, VA
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I was an OCC examiner...BSA/AML, SCRA, and Flood. Commercial examiner, right?
_________________________
...gone fishing.
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