Notice of Final Rule to Modernize FDIC Official Signs and Advertising Statement Requirements and to Clarify its Regulations Regarding False Advertising, Misrepresentations, and Misuse of the FDIC's Name or Logo

The FDIC Board is considering today a final rule to amend the FDIC’s regulations on use of the official FDIC sign and insured depository institutions’ (IDIs) advertising statements. The final rule also clarifies the FDIC’s regulations on false advertising, misrepresentation of insured status, and misuse of the FDIC’s name or logo.

This final rule modernizes FDIC signage requirements to reflect how depositors interact with banks today, taking into account, for example, digital banking channels. The way people bank has changed significantly and banks are increasingly leveraging their digital channels, including websites and mobile applications, to offer products and services to their customers.

The revisions extend the certainty and confidence that the FDIC official sign provides at bank branch teller windows to the digital channels through which depositors are increasingly handling their banking needs.

The final rule considered by the Board today also modernizes the rules governing the display of the FDIC official sign in branches and extends the application of sign requirements to other physical premises where consumers have access to, or transact with, deposits such as, for example, café–style locations.

The final rule establishes and requires a new digital version of the official FDIC sign. The final rule requires insured depository institutions to display this new FDIC official digital sign near the name of the bank on all bank websites and mobile applications. For many consumers, these channels may serve as the primary method of accessing banking products, acting essentially as a “digital teller window.” It is important to require a digital sign so that customers can confirm when they interacting directly with a bank rather than with a non–bank entity, and to clarify when their funds are insured by the FDIC and when they are not.

To that end, the final rule also requires banks to display disclosures differentiating non–deposit products from insured deposits, where both types of products are offered to consumers. This requirement is consistent with longstanding interagency guidance that many banks already follow, and would help make clear when a consumer’s money is, or is not, insured by the FDIC.

In addition, the final rule provides important clarification on false advertising, misrepresentation of insured status, and misuse of the FDIC’s name or logo.

The Federal Deposit Insurance Act prohibits any person from engaging in false advertising by misusing the name or logo of the FDIC or from making knowing misrepresentations about the existence of or the extent or manner of deposit insurance.1

The FDIC has observed an increasing number of instances online where firms or individuals have misused the FDIC’s name or logo, or have made false or misleading representations about deposit insurance. For example, we have seen circumstances where certain non–bank entities were making unsubstantiated claims about deposit insurance. These practices can confuse consumers about whether they are dealing with an insured institution and if they are protected by deposit insurance.

Combatting misrepresentations about deposit insurance coverage goes to the heart of the FDIC’s mission of maintaining stability and public confidence in the nation’s banking system. These practices can not only confuse and harm those who are targeted with the false promise of deposit insurance, but, if left unchecked, could also undermine confidence in the FDIC, FDIC–insured banks, and the U.S. banking system.

Today’s final rule amends the regulations on misrepresentations regarding deposit insurance to expressly address several of these situations, making clear when certain statements or omissions constitute a misrepresentation under the statute.

Finally, the final rule under consideration today requires insured depository institutions to establish and maintain written policies and procedures to comply with the rule. Such policies and procedures would include, as appropriate, provisions related to monitoring and evaluating the activities of third parties that provide deposit–related services to the bank or offer the bank’s deposit–related products or services to other parties. This would address an area of growing concern for the FDIC, where the relationship between a bank and a non–bank enables or gives credibility to certain misrepresentations of deposit insurance by non–banks.

This final rule brings the certainty, safety, and confidence historically provided by the FDIC sign and FDIC insurance to today’s varied banking channels, including digital banking. Earlier this fall, the FDIC launched its "Know your Risk. Protect your Money." public awareness campaign which underscores how important it is for consumers to understand how deposit insurance works and how it protects their money. This rule complements that work, by enabling consumers to better understand when they are doing business with a bank and when their funds are protected by deposit insurance.

I would like to thank the FDIC staff for their outstanding work in bringing this Final Rulemaking to the Board today.

I am pleased to support this final rule.

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  12 U.S.C. § 1828(a)(4).