Topic: Advertising & Marketing
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Does Illinois law require us to use the phrase “subject to credit approval” in our advertisements for loan pre-approvals?
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No, we are not aware of any Illinois law that would require your bank to use the phrase “subject to credit approval” in an advertisement for loan pre-approvals, but it may be prudent to use this phrase (or similar language) to avoid potential claims that your advertisement is deceptive. Under the Illinois Consumer Fraud and…
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As a promotion at a new facility, we would like to fill the $20 canister in the ATM with a random number of $50 bills. The promotion would be open to anyone with an electronic device card who accesses the ATM, and we would publish rules disclosing the ATM fees (including a withdrawal fee charged only to noncustomers). Would this promotion be considered an illegal lottery?
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No, we do not believe that this promotion would be considered an illegal bank lottery. Under federal law, banks are generally prohibited from dealing in lottery-related activities (other than savings promotion raffles) where participants advance money or credit in exchange for the possibility of winning more than the amounts advanced. We do not believe that…
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We distribute a fee schedule for deposit accounts, and some at the bank think this fee schedule needs to include an “Equal Housing Lender” statement. We’re also wondering whether this would be required for privacy notices and disclosures — both of which we provide to both deposit and loan customers. Are these documents required to have the “Equal Housing Lender” statement? How about the “Member FDIC” disclosure?
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We do not believe that these documents need to include the “Equal Housing Lender” statement, nor do they need to include the “Member FDIC” disclosure. The Federal Reserve’s Equal Housing Lender advertising requirements apply to “any form of advertising of any loan for the purpose of purchasing, constructing, improving, repairing, or maintaining a dwelling.” Consequently,…
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We have an affiliate that will begin selling insurance products to our bank customers. We have changed our privacy notice to allow customers to opt-out of affiliate sharing. For mortgage loans, we will provide loan customers with the new privacy notice at the time of application. How soon may our insurance affiliate begin marketing to new our new mortgage loan customers? Does twenty days constitute a “reasonable opportunity” to opt out?
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In general, we recommend that your institution should wait thirty days after providing the opt-out notice before sharing information about your customers with your insurance affiliate for marketing purposes; your bank arguably could start sharing customer information after just twenty days, as discussed below, but this would be at the risk of having to prove…
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We are launching a new website and want to publish our mortgage rates on it. What is the required disclosure language that rates are subject to change based on credit score, loan-to-value ratio, etc.?
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We are not aware of specific language that must be used when disclosing that advertised mortgage rates are subject to change based on factors such as a credit score and loan-to-value ratio, and Regulation Z does not include any sample or model language for such a disclosure. As a reference, the resources below include two…
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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?
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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…
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We would like to enter into an agreement with a local real estate office to put a link on its website to our bank’s website. We would research the fair market rate for this advertising service and enter into an agreement with the real estate office for a comparable amount. The real estate office’s website also would link to two other lenders. We would not share any information with the real estate office and would not place a link to its website on our bank’s website. Are there any Real Estate Settlement Procedures Act (RESPA) concerns we should be aware of when entering into a marketing services agreement (MSA) of this kind?
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Yes, there are concerns related to your proposal, but we think they could be worked through depending on the right structure. MSAs with real estate settlement providers pose an inherent risk and can be very difficult to monitor to ensure that the parties to the agreement do not run afoul of RESPA’s anti-kickback provisions. However,…
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We would like to create an account that provides customers with a special rate on a certificate of deposit (CD) when they open a new checking account and a CD. Customers with existing checking accounts would not be eligible to open a CD with the special rate. Does offering this type of product pose any problems?
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We believe that offering a special rate on a CD to customers who simultaneously open a checking account and a CD presents a relatively low risk of being considered an unfair, deceptive or abusive act or practice (UDAAP). However, the characterization of an act or practice as a UDAAP violation is highly subjective and sometimes…
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A form entitled “CONSENT TO CONTACT YOU BY TELEPHONE, TEXT AND EMAIL” has started to appear in our test loan production environment. The form authorizes a lender to contact its loan customer about their loan account by telephone, text and email. Is this form required under Illinois law?
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No, we do not believe this form is required by Illinois law, and we are not aware of any Illinois law requiring a lender to obtain written consent to contact their customers about their loan accounts by telephone, text or email. However, federal law may require that you obtain prior written consent to contact your…