CFPB issues circular supporting FDIC's rule

The CFPB announced on Tuesday it has issued Consumer Financial Protection Circular 2022-02, "Deceptive representations involving the FDIC's name or logo or deposit insurance" to address the question of when representations involving the name or logo of the Federal Deposit Insurance Corporation (FDIC) or about deposit insurance constitute a deceptive act or practice in violation of the Consumer Financial Protection Act (CFPA).

The Bureau's guidance is that "Covered persons or service providers likely violate the CFPA’s prohibition on deception if they misuse the name or logo of the FDIC or engage in false advertising or make misrepresentations to consumers about deposit insurance, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly. Representations about deposit insurance may be particularly relevant with respect to new financial products or services, especially those involving new technologies such as digital assets, including crypto-assets."