On December 20, 2023 the FDIC approved and issued a final rule regarding changes to 12 CFR 328: rules for the use of FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentations of Insured Status, and Misuse of the FDIC’s Name or Logo.
The updated rules are effective April 1, 2024, with a mandatory compliance date of January 1, 2025.
The new rule implements changes to in-branch signage rules, implements new digital signage for websites, mobile apps, and ATMs where deposits are taken, requirements for non-deposit product disclosures across physical and non-physical (digital) channels and requires institutions to establish and maintain written policies and procedures addressing compliance with part 328.
Physical Official Sign
There is no change to the format of the “official sign” (still 7” by 3” or larger with black lettering on a gold background) and signs are still allowed to vary in size and color, however the sign must not be smaller in size than the official sign, must have the same color for the text and graphics, and include the same content.
For institutions with teller windows, there is no change to the display requirements: the official sign should still be displayed at any teller window where deposits are accepted.
For institutions without teller windows (ie. café-style layout) or where deposits are accepted at other than a teller window, the FDIC signage requirement has been modified to allow for physical or electronic signs visible from the teller windows or stations in a manner that ensures the official sign is large enough so as to be legible from anywhere in that area. In lieu of this, the official sign anywhere deposits can be accepted is permitted.
Official Digital Sign
The biggest change is the requirement for a new blue and black digital FDIC sign on any digital channel (“official digital sign”), such as a website, mobile app, ATM, or remote electronic facility which accepts deposits, which must be disclosed at the top, near the Bank’s name/logo, clearly, conspicuously, and continuously. The regulation stipulates requirements for size, color, and font for the official digital sign.
If your website/online banking or mobile app offers the ability to make deposits electronically and provide access to deposits, the official digital sign is required to be continuously displayed near the top of the relevant page or screen and in close proximity to the insured depository institution’s name on:
- Initial or homepage of the website or application;
- Landing or login pages; and
- Pages where the customer may transact with deposits.
Non-Deposit Products
The Regulation also incorporates disclosures for non-deposit products and expanded and clarified what that encompasses. The definition of a non-deposit product now includes crypto-assets and excludes safe deposit boxes.
The Regulation expanded on the existing requirement for “physical segregation” in sales of deposit and non-deposit products, those areas should be “clearly delineated and distinguished.” The Regulation also added a requirement for a disclosure if the Bank offers non-deposit products in physical locations or through digital channels as described above. While the disclosure requirements are similar to what is currently required under 12 CFR 14, 208 and 343, the disclosure must be clearly, conspicuously, and continuously displayed, and may not be displayed near the official sign. This same caveat goes for the digital channels; the non-deposit disclosure must be displayed on any pages relating to non-deposit products and those pages cannot display the official digital sign.
Section 328 requires the disclsoure to include non-deposit products are:
- Not insured by the FDIC
- Not deposits
- May lose value.
Sections 14, 208 and 343 (Consumer Protection in Sales of Insurance) require disclosures to state products are:
- Not a Deposit
- Not FDIC-Insured
- Not Insured by any Federal Government Agency
- Not Guaranteed by the Institution
- May Go Down in Value
Unlike the requirement for the physical and digital official signs, there is no specific format requirements for the non-deposit disclosure signage other than clear and conspicuous and not a red circle-backslash over “FDIC” or “FDIC-insured.”
The preamble to the Regulation contained this important footnote: Some institutions currently display non-deposit disclosures in small font near the bottom of web pages and application screens. Consumers are unlikely to notice such disclosures and may mistakenly believe that non-deposits products are covered by FDIC insurance. Such display of non-deposit disclosures would not satisfy the clear, continuous, and conspicuous display requirement of the proposed rule.
The Regulation also stipulates if a deposit taking digital channel offers access to non-deposit products from a non-bank third party’s online platform which can be accessed by a customer while logged in to an institution’s digital channel (ie. online/mobile banking), a one-time notification per session (ie. speedbump) presenting the non-deposit disclosure must be given, and can also include a notification about leaving the institution website and privacy disclaimer in accordance with interagency weblinking guidance.
ATM, Remote Electronic Facilities, or other like devices
The signage requirements for ATMs (or like devices – “ATM” for purposes of this article) which accept deposits are dependent on what products/services are offered as well as when the ATM was put into service. If the ATM does not accept deposits the signage requirements would not apply.
For ATMs which accept deposits, do not offer non-deposit products and are in service prior to January 1, 2025, a physical official sign can be displayed on the outside of the ATM, or the official digital sign can be displayed clearly, conspicuously, and continuously on the home screen and on any pages relating to deposits. The FDIC also states that a degraded or defaced physical official sign on an ATM would not meet the clear, continuous, and conspicuous requirement.
For ATMs put into service after January 1, 2025, which accept deposits, only the digital signage option is permitted.
For ATMs which accept deposits and allow non-deposit product offerings, the digital non-deposit signage requirements will apply on any screen relating to non-deposit products. Those screens should also not show the official digital sign. The official digital sign requirements shown above also apply.
Official Advertising Requirements
The Regulation expanded on the official advertising requirements. An advertisement is still defined as commercial message, in any medium, that is designed to attract public attention or patronage to a product or business, but the “official advertising statement” has been expanded.
The statement used to include only “Member of the Federal Deposit Insurance Corporation” or it’s short forms: “Member of FDIC,” “Member FDIC” or a truncation of the FDIC symbol as indicated in 328.2(b). Also added as an acceptable term for the statement was “FDIC-Insured” which is a throwback to the FSLIC for those of us old enough to remember. As always, legibility is a key factor.
The official advertising statement is still required for all advertisements that either promote deposit products and services or promote non-specific banking products and services offered by the institution. The inclusion of a list of items which do not require the statement remains unchanged, as does the requirement to not use the official statement when advertising non-deposit products (mixed advertisements aside).
The preamble also reiterates the official digital sign requirement does not overlap with the advertising statement requirements. For example, the advertising statement would not be required on web pages where an institution displays the official digital sign, such as a homepage. However, institutions remain responsible for complying with the official advertising statement requirements for other qualifying advertisements, including those contained on other web pages.
Policies and Procedures
The rule requires institutions to establish and maintain written policies and procedures, commensurate with the nature, size, complexity, scope, and potential risk of the deposit-taking activities of the institution and must include, as appropriate, measures to ensure compliance with the sign and advertising requirements when the institution changes its advertising strategy or engages with, or expands into, new physical or digital deposit-taking channels, as well as provisions related to monitoring and evaluating activities of persons who provide deposit-related services to the institution or offer the institution’s deposit-related products or services to other parties.
The third party monitoring is already something the Bank should be doing in accordance with the Interagency Guidance on Third-Party Relationships: Risk Management released in June 2023.
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