Trades Request Clarity on FDIC Rules Governing Signs and Advertising

Ladies and Gentlemen:

The Bank Policy Institute,^[1] the American Bankers Association^[2] and the Consumer Bankers Association^[3] write regarding the Federal Deposit Insurance Corporation's final amendments to the rules addressing Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC's Name or Logo.^[4] The revisions to the rule are intended to modernize the FDIC's signs and advertising regulations to better reflect the increased use of internet and mobile banking channels to access insured depository institution banking and other services. Additionally, the amendments clarify the FDIC's rules regarding misrepresentation of deposit insurance. However, as we describe herein, there are multiple aspects of the rule that must be clarified in order for banks to understand the rule's provisions and implement changes to their signage in accordance with the rule.

We therefore respectfully request that the FDIC continue to work with member institutions and other industry stakeholders to determine those aspects of the final rule where comprehensive and clarifying implementation guidance is necessary for institutions to be able to properly implement the rule and that this guidance, which could take the form of FAQs, for example, be published by the end of 2024. We further request that the FDIC extend the compliance deadline by 12 months to January 1, 2026, to provide institutions with sufficient time to comply with the rule, as clarified by the guidance.

The banking industry is strongly committed to consumer protection, promoting public confidence in insured deposits, and preventing false and misleading representations about the manner and extent of FDIC deposit insurance. Banks seek to provide their customers with a range of products and services through various channels that best meet customer needs and to provide clear descriptions and disclosures of the features of those products and services to prevent false and misleading representations and thereby protect consumers. Accordingly, we support the modernization of the FDIC's rules on signs and advertising, which have not been comprehensively updated since 2006, largely prior to the digitization of the financial services marketplace. Furthermore, given the rise of new market participants offering bank-like products (or products purporting to be bank-like), including those promising pass-through deposit insurance and similar products and services-whether through partnerships with IDIs or independently-we support the FDIC's efforts to prevent misleading representations relating to deposit insurance coverage and to help mitigate customer confusion.

We submitted a robust comment letter in response to the proposal.^[5] Among other issues, we highlighted that banks would have to make substantial revisions to their digital banking channels after the issuance of any final rule, which would require time to design, code and test over hundreds of pages of online and mobile screens, through both iOS and Android operating systems, and in some cases, in multiple spoken languages. Therefore, we requested that the FDIC provide at least an 18-month implementation period to allow institutions to make the necessary changes to come into compliance with any final rule's requirements.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] The American Bankers Association is the voice of the nation's $23.6 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $19.2 trillion in deposits and extend $12.2 trillion in loans.

[3] The Consumer Bankers Association is the only national trade association focused exclusively on retail banking. Established in 1919, the association is a leading voice in the banking industry and Washington, representing members who employ nearly two million Americans, extend roughly $3 trillion in consumer loans, and provide $270 billion in small business loans.

[4] 87 Fed. Reg. 78017 (Dec. 21, 2022), available at: 2022-27349.pdf (govinfo.gov).

[5]See letter from Paige Pidano Paridon, BPI, and Alison Touhey, ABA, to James P. Sheesley, Assistant Executive Secretary, Federal Deposit Insurance Corporation re: "Proposal to modernize the rules governing use of the official FDIC sign and insured depository institutions' advertising statements (RIN 3064-AF26)" (April 7, 2023), BPI-FDIC-Signs-Advertising-Draft-Letter-4-6-23final-forsubmission1.pdf.

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