Topic: Advertising & Marketing
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We are considering an arrangement in which a local business would solicit business in some of our branches, and in return, bank employees will hand out marketing materials promoting our institution at the business. What federal and state regulations should we consider?
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We are not aware of any federal or state laws or rules that would directly apply in this case. However, your arrangement should be structured to comply with Illinois and federal financial privacy laws, and we recommend that your employees be properly trained and aware of the privacy rules with respect to the arrangement. Particularly…
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For purposes of Regulation DD’s advertising requirements, is an outdoor electronic sign that is located on the bank’s premises (but not attached to the bank) a billboard? Or is it considered to be an indoor sign?
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An outdoor electronic sign would be considered to be “outdoor media,” such as a “billboard,” under Regulation DD. It would not be considered to be an indoor sign. Regulation DD states that “indoor signs” include any signs or advertisements inside the bank premises, and the rule provides examples of computer screens, banners, preprinted posters, and…
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We are thinking about providing a bonus credit of $10 for new student checking accounts. Can we condition the bonus on the customer’s enrollment in internet banking?
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With proper disclosures, you should be able to provide the account bonus on the condition that the customer enrolls in internet banking. Any advertising and account disclosures should clearly state that customers must sign up for internet banking to receive the bonus. If you will not be providing paper statements to the customers that enroll…
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We would like to hold a giveaway for an iPad Mini. It would be open to anyone who comes into the bank on the day of our anniversary celebration, but we will have a minimum age to enter. Is that permitted? And do we need to issue a Form 1099 to the winner?
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Yes, we believe that you may impose a minimum age for entries into the giveaway, provided that you do not impose any other requirements for entries. And we do not believe you will need to issue an IRS Form 1099-MISC for the prize, since its value is below $600. To comply with state and federal…
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We want to gift iPad minis to borrowers who are eligible for secondary market financing and close a home purchase or a home refinancing loan. Do we need to disclose the value of the gift in our marketing? Are there any disclosures related to the gift that we must provide the customer?
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No, we do not believe Regulation Z’s closed-end credit advertising rules would require you to disclose the value of the gift, and we are not aware of any other disclosure requirements that might apply to such gifts. In addition, we note that you will not have to report the gift on IRS Form 1099-MISC if…
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Do you know of any financial institutions that have been penalized for targeting and offering products and services to Spanish-speaking customers without providing Spanish disclosures?
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No, we are not aware of any financial institutions that have been fined or have paid civil money penalties for offering products and services to Spanish-speaking customers without providing disclosures in Spanish. However, you should be aware of two statutory notice requirements in the State of Illinois relating to residential mortgage foreclosures. One requirement applies…
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Can we share customer information under the joint marketing exception in the federal privacy rules, even though Illinois law does not include the same exception?
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Yes. The IDFPR has clarified in an interpretive letter that any privacy exceptions that apply under federal law also apply under Illinois law. The joint marketing exception is located in Subpart C of the federal regulations (12 CFR 1016.13), and “a state bank need not obtain a customer’s authorization to make disclosures permitted by one…