Author: Jill Emerson, Integrity One Consulting
Advertising. Once an uncomplicated part of compliance where you just had to make sure that there were no triggering terms to warrant further disclosures, as an example. It seemed somewhat simple.
We know today that this just isn’t the case. The environment in which we operate has changed immensely for various reasons. Technology is certainly at the top of the list. Advertising is no longer the paper ad or mailing. It’s so much more. And more regulations to ensure that advertising is clear and represents the customer segments within the communities served.
So, how do you stack up? Does the process you follow capture all the nuances to reduce or minimize the risks? Let’s spend a few moments doing just that: a compliance check-up, if you will.
Does compliance have a seat at the table? Your partnership with your marketing department matters. At times it may seem that it’s not possible to have positive interactions, but understanding how each department works and the parameters involved will help establish a successful working relationship. The advantage of having a seat at the table allows compliance to be involved within all steps of product development as well as any changes. Also, educating marketing folks on regulatory requirements in advertising will promote their ability in creating advertising materials for the mediums you use.
Have you identified all mediums used in your advertising? Knowing which mediums you employ help determine which laws and regulations from which to comply. Here are some examples to consider:
- Text messaging
- Print media: newspaper, magazine, promotional materials, direct mail
- TV, radio, public announcements
- Interior/exterior signs or print material affixed to such
- Emails
- Messages on ATM screens, account statements
- Information in letters to solicit business from customers regarding your products and services
- Telephone hold messages, telephone voice response systems, telemarketing
- Social media
- Online displays/point-of-sale displays
Do you have a defined and documented review process?
- Do your advertising checklists encompass all the regulatory requirements? The obvious ones are Regulations DD and Z as well as UDAAP. How about rules surrounding the National Do Not Call Registry? Or, the Children’s Online Privacy Protection Act? The CAN-SPAM Act?
- Do you check for Member FDIC and Equal Housing Lender logos? Are you aware of the exceptions?
- When triggering terms are used, are the proper disclosures included depending on the type of product?
- In your advertisements, are all types of customers represented? The Equal Credit Opportunity Act is one of the main fair lending laws that must be considered, along with the Fair Housing Act. Don’t get caught inadvertently excluding customer segments. Your entire population needs to be represented by including a variety of races, ages, and genders.
Have you considered automating the process for sending marketing emails? Following the CAN-SPAM Act requirements is no short process, but an automated system to check for these requirements is a good idea to ponder.
Are marketing/advertising vendors included in your vendor management program? Ultimate responsibility for any advertising rests with your financial institution. Follow due diligence procedures to ensure that any vendors used for marketing/advertising follow the agreement and know the regulatory requirements for advertising.
While what is written here is really nothing new (hopefully), it’s always a good idea to make sure time is taken to review your advertising review process. We all know changes occur quite frequently whether within your financial institution with products/services, processes, or business strategy or externally with the market and/or regulatory changes. Make sure you stay ahead rather than behind and risk fines for noncompliance.
Jill Emerson
Jill Emerson, owner of Integrity One Consulting, maintains over 30 years’ experience in the financial services industry, both as a practitioner and as a federal regulator. She enjoys sharing her experiences and expertise through writing. Jill can be reached at integrityoneconsulting@outlook.com.
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