Topic: Advertising & Marketing
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We are considering changing the name of a deposit account product from “E-Free” to “E-Checking.” The main feature of this account is free e-statements, but we charge a fee for paper statements. Also, if a customer does not log in and access their e-statements for a certain amount of time, we send them a notice stating that we will start sending and charging them a monthly fee for paper statements if they do not log in. The paper statement fee is included in our advertisements and account opening disclosures, but the condition regarding accessing e-statements is not. Do we need to remove “free” from the name of this account, and, if so, are we required to notify our current account holders of this change?
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Yes, we believe you should remove “free” from the name of the deposit account product and cease advertising the account as “free” if you will be charging a monthly fee for paper statements. Additionally, while you are not required to notify customers when you change the name of a deposit account product, we recommend sending…
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If we advertise a checking account as “free” and list “free eStatements” as a feature, but plainly disclose on the advertisement and in the account opening disclosures that we will charge a fee for requesting paper statements, may we charge the fee?
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No, we do not believe that you may charge a monthly fee for paper statements while advertising an account as “free,” even if you disclose the fee on your advertisements and in the account opening disclosures. Regulation DD prohibits an advertisement from referring to or describing an account as “free” if any “maintenance or activity…
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If we advertise a checking account as “free” and list “free eStatements” as a feature, may we charge a customer if they request paper statements?
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No, we do not believe that you may charge a monthly fee for paper statements while advertising an account as “free.” There may be potential pitfalls even if you intend to charge the fee only occasionally, including risking an unfair, deceptive, or abusive act or practice (UDAAP) finding. Regulation DD prohibits an advertisement from referring…
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Are national banks required to include a reference to the Nationwide Multistate Licensing System (NMLS) website and their bank’s unique identifier on advertisements, as outlined in the Residential Mortgage License Act of 1987?
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No, national banks are not required to include a reference to the NMLS’s website and their unique identifiers on advertisements. Banks and mortgage loan originators employed by banks are exempt from the Residential Mortgage License Act, and the federal requirements for banks and registered mortgage loan originators do not require their unique identifiers to appear…
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If we are considered a mortgage broker under Regulation X, can we charge a reasonable fee for ordering appraisals and title work, pulling credit reports, and submitting applications to the correspondent bank that will serve as the lender? Do we need to include anything about acting as a mortgage broker in our lending policy?
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Yes, we believe you can charge a reasonable fee for services you perform as a mortgage broker, including ordering appraisals and title work, pulling credit reports, and submitting loan applications to the correspondent bank. We are not aware of any requirement to include information related to acting as a mortgage broker in your lending policy…
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We would like our mortgage loan originators to send out an email reminders to mortgage loan customers with the details of their upcoming closing, such as the time and place. The subject line of the email would be “Your Closing.” The email would contain one line near the end asking the borrower to refer anyone they know looking for a mortgage to our bank. Does this email need to comply with the CAN-SPAM rules?
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No, we do not believe the email needs to comply with the CAN-SPAM rules, as the email’s “primary purpose” does not seem to be “commercial.” The CAN-SPAM Act applies only to commercial emails, defined as “any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or…
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Can you recommend any resources or guidance on using customer data for targeted marketing purposes? We have been using zip codes for targeted marketing promotions. Are there any limitations on data targeting that we should be aware of?
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Yes, when considering targeted marketing campaigns, you should consider whether any fair lending laws or UDAAP concerns will be triggered. We recommend carefully considering whether any targeted marketing campaign may be viewed as discriminatory or having a disparate impact on a protected class and thoroughly documenting your business reasons for engaging in such a campaign.…
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If we begin to offer FHA loans through our secondary market correspondent bank — with the correspondent bank funding the loans and closing the loans in its name — would we be considered a broker? We would order the appraisal and title work, pull credit reports, and submit the applications to the correspondent bank, which would make all decisions as to the application. If we are a broker, what compliance considerations do we need to be aware of?
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Yes, we believe you would be considered a mortgage broker in this scenario, which Regulation X defines as “a person (other than an employee of a lender) that renders origination services and serves as an intermediary between a borrower and a lender in a transaction involving a federally related mortgage loan.” Below is a non-exhaustive…
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We are planning on running a contest to benefit small businesses. We are providing a t-shirt for contestants. If they take a selfie with the t-shirt and post it on social media with specific hash tags, they can come to our bank during a one-week timeframe and receive a low-dollar gift card for a local business, while supplies last. Everyone can participate in this contest, and we are planning on advertising it with a flyer and on social media. Would this contest fall under any special Illinois rules? Additionally, do we need to disclose anything, such as that no purchase is necessary, that the contest is void where prohibited, any eligibility requirements and restrictions, and the sponsor’s name and address?
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Yes, we believe you should comply with the disclosure requirements in the Illinois Consumer Fraud and Deceptive Business Practices Act for this contest. The Illinois Consumer Fraud and Deceptive Business Practices Act states that advertisements offering free prizes to consumers must clearly and conspicuously disclose all material terms and conditions at the outset of the…
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Do our “Member FDIC” signs need to use black letters on a gold background? When ordering signs, the option of white letters on black was offered.
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We believe that “Member FDIC” signs displayed in required locations may vary the colors of the text and background, provided that customers can still recognize the sign. The official FDIC sign, as described in the FDIC’s regulations, includes “black lettering and gold background.” However, “an insured depository institution may display signs that vary from the…