We would like to advertise certain deposit account products (such as CDs and rewards checking accounts) on the radio. What information about such accounts must be disclosed in a radio ad, and what information can be omitted?

Jul 15, 2019

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When an advertisement for a deposit account states a rate of return, it must state the rate as an “Annual Percentage Yield” – using that term. However, the abbreviation “APY” also may be used in the advertisement, provided “Annual Percentage Yield” also is stated at least once in the ad. The advertisement may not state any other rate, except an “interest rate” if that rate is stated in conjunction with, but not more conspicuously than, the stated APY.

When a radio advertisement states the APY, it also must include the minimum balance required to obtain the advertised APY (if applicable), and for time deposit accounts such as CDs, the term of the time deposit and the required interest payouts. If a rewards bonus is stated, the radio advertisement also must state the APY, the time requirement, and the minimum balance required to obtain the rewards bonus.

However, radio advertisements that state the APY are not required to include: (1) a statement that rates may change after the account is opened (for variable rate accounts), (2) the period of time the APY will be offered, (3) a statement that the APY is accurate as of a specified date, (4) the minimum deposit required to open the account if it is greater than the minimum balance necessary to obtain the advertised APY, or (5) a statement that a penalty will be imposed for early withdrawal (for time deposit accounts).

Radio advertisements that state a rewards bonus also are not required to include: (1) the minimum balance required to open the account, if it is greater than the minimum balance necessary to obtain the rewards bonus, or (2) when the rewards bonus will be provided. Further, radio advertisements that mention the payment of overdrafts are not required to include certain disclosures about the overdrafts.

Notably, while FDIC-insured depository institutions generally must include the statement “Member of the Federal Deposit Insurance Corporation” or “Member FDIC” in their advertisements, this statement may be omitted from radio advertisements not exceeding thirty seconds.

Also, needless to say but equally important, an advertisement must not be misleading or inaccurate.

For resources related to our guidance, please see:

Regulation DD, 12 CFR 1030.8(b) (“Permissible rates. If an advertisement states a rate of return, it shall state the rate as an ‘annual percentage yield’ using that term. (The abbreviation ‘APY’ may be used provided the term ‘annual percentage yield’ is stated at least once in the advertisement.) The advertisement shall not state any other rate, except that the ‘interest rate,’ using that term, may be stated in conjunction with, but not more conspicuously than, the annual percentage yield to which it relates.”)

Regulation DD, 12 CFR 1030.8(e)(1) (“If an advertisement is made through one of the following media, it need not contain the information in paragraphs (c)(1), (c)(2), (c)(4), (c)(5), (c)(6)(ii), (d)(4), and (d)(5) of this section: (i) Broadcast or electronic media, such as television or radio

Regulation DD, 12 CFR 1030.8(c) (“Except as provided in paragraph (e) of this section, if the annual percentage yield is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously:

(1) Variable rates. For variable-rate accounts, a statement that the rate may change after the account is opened.

(2) Time annual percentage yield is offered. The period of time the annual percentage yield will be offered, or a statement that the annual percentage yield is accurate as of a specified date.

(3) Minimum balance. The minimum balance required to obtain the advertised annual percentage yield. For tiered-rate accounts, the minimum balance required for each tier shall be stated in close proximity and with equal prominence to the applicable annual percentage yield.

(4) Minimum opening deposit. The minimum deposit required to open the account, if it is greater than the minimum balance necessary to obtain the advertised annual percentage yield.

(5) Effect of fees. A statement that fees could reduce the earnings on the account.

(6) Features of time accounts. For time accounts:

(i) Time requirements. The term of the account.

(ii) Early withdrawal penalties: A statement that a penalty will or may be imposed for early withdrawal.

(iii) Required interest payouts. For noncompounding time accounts with a stated maturity greater than one year that do not compound interest on an annual or more frequent basis, that require interest payouts at least annually, and that disclose an APY determined in accordance with section E of appendix A of this part, a statement that interest cannot remain on deposit and that payout of interest is mandatory.”)

Regulation DD, 12 CFR 1030.8(d) (“Except as provided in paragraph (e) of this section, if a bonus is stated in an advertisement, the advertisement shall state the following information, to the extent applicable, clearly and conspicuously:

(1) The ‘annual percentage yield,’ using that term;

(2) The time requirement to obtain the bonus;

(3) The minimum balance required to obtain the bonus;

(4) The minimum balance required to open the account, if it is greater than the minimum balance necessary to obtain the bonus; and

(5) When the bonus will be provided.”)

Regulation DD, 12 CFR 1030.8(f) (“Institutions that promote the payment of overdrafts in an advertisement shall include in the advertisement the disclosures required by § 1030.11(b) of this part.”

Regulation DD, 12 CFR 1030.11(b)(2) (“Communications about the payment of overdrafts not subject to additional advertising disclosures. Paragraph (b)(1) of this section does not apply to: . . . (iii) An advertisement made through broadcast or electronic media, such as television or radio

Regulation DD, 12 CFR 1030.11(b)(1) (“Disclosures. Except as provided in paragraphs (b)(2) through (4) of this section, any advertisement promoting the payment of overdrafts shall disclose in a clear and conspicuous manner:

(i) The fee or fees for the payment of each overdraft;

(ii) The categories of transactions for which a fee for paying an overdraft may be imposed;

(iii) The time period by which the consumer must repay or cover any overdraft; and

(iv) The circumstances under which the institution will not pay an overdraft.

FDIC Advertising Statement Rules, 12 CFR 328.3(b) (The official advertising statement shall be in substance as follows: ‘Member of the Federal Deposit Insurance Corporation.’ . . . (1) Optional short title and symbol. The short title ‘Member of FDIC’ or ‘Member FDIC,’ or a reproduction of the symbol of the Corporation (as described in §328.1(b)), may be used by insured depository institutions at their option as the official advertising statement.”)

FDIC Advertising Statement Rules, 12 CFR 328.3(d) (“The following types of advertisements do not require use of the official advertising statement: . . . (8) Advertisements by radio or television, other than display advertisements, which do not exceed thirty (30) seconds in time; . . .”)

Regulation DD, 12 CFR 1030.8(a) (“Misleading or inaccurate advertisements. An advertisement shall not:

(1) Be misleading or inaccurate or misrepresent a depository institution's deposit contract; or

(2) Refer to or describe an account as ‘free’ or ‘no cost’ (or contain a similar term) if any maintenance or activity fee may be imposed on the account. The word “profit” shall not be used in referring to interest paid on an account.”)

Previous: We have several large corporate customers with officers who have full rights on the customers’ accounts and other employees with signing authority only. For example, one customer has two officers with full rights and approximately 32 authorized signers. We would like to streamline the process of adding (or subtracting) multiple signers to a corporate account by using a “signing authority form” as an addendum to a corporate authorization resolution. The signing authority form would provide that (1) the customer understands the document is an addendum to the corporate authorization resolution and account agreement, (2) the “undersigned” (including the corporate officer and any listed authorized signers) authorizes the bank to verify the credit and employment history of the authorized signer(s), which may include obtaining a credit report for the authorized signer(s), and (3) the undersigned acknowledges the receipt of copies of agreements and disclosures related to terms & conditions, truth in savings, funds availability, electronic funds transfers, privacy, and substitute checks. Is there any other language we should include in the signing authority form?

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