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Deposit Insurance Statement in Loan Ads

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I have heard that the revised regulations for advertising membership in the FDIC no longer exempt ads for loans. Is that correct, and was a similar change made to the NCUA regulations?

In the current FDIC regulation at 12 CFR Part 328, there is a list of 20 types of advertisements that don't need to include the "Member FDIC" (or longer version of same) advertising statement. Ads "relating to the making of loans by the bank or loan services" are item 12 on that list. The new version of Part 328, effective November 13, 2007 (with compliance optional before that date), shortens the exception list to 10 and ads for the making of loans no longer appear in the list. However, revised section 328.3(c) now states that the official advertising statement is required "in all advertisements that either promote deposit products and services or promote non-specific banking products and services offered by the institution." Because lending or the making of loans are included in that requirement, the effect is to continue exempting from the official advertising statement requirement those ads that are only for the making of loans. The NCUA also updated its regulations (at 12 CFR 740.5) regarding the use of its official advertising statement of membership. That rule continues to have an explicit exemption for ads for loans.

First published on 04/09/07

First published on 04/09/2007

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