Topic: Advertising & Marketing
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Our bank would like to advertise a competition where any individual can nominate their favorite small business to receive a cash prize. A business also can nominate itself. Our bank will narrow down the list of nominations, and the public will vote on the winning small business. Do we need to include the Illinois Prizes and Gifts Act disclosures in the advertisement? Are there any other laws that we should be aware of?
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No, we do not believe that you need to include the disclosures required by the Illinois Prizes and Gifts Act (PGA) in your advertisements. However, it would be prudent to include the material terms of the contest in the advertisements to comply with the Consumer Fraud and Deceptive Business Practices Act (CFDPBA). The PGA’s disclosure…
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We are sending an email advertisement to existing auto loan customers for a credit card that we offer through a third party. Those who apply for the credit card will receive an Amazon gift card. The email also contains a link to the additional disclosures required under Regulation Z. Is the link sufficient, or should we include the disclosures in the body of the email? Also, should we specify that the offer is only for the email recipient or for existing auto loan customers, so that recipients don’t share the offer email? Are there any other issues with such an email advertisement?
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Yes, Regulation Z and its Official Interpretations permit electronic advertisements to provide the additional required disclosures through a link, provided any trigger terms in the email are “accompanied by a link that directly takes the consumer to the additional information.” We also recommend reviewing the email to ensure that it complies with the CAN-SPAM Act,…
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We are planning an advertisement for closed-end residential mortgage loans that will include the phrase “low downpayment.” Does that phrase trigger additional disclosures under Regulation Z?
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No, we do not believe that the phrase “low downpayment” in an advertisement for mortgage loans would trigger the additional advertising disclosures required under Regulation Z. Regulation Z requires additional disclosures to be provided with advertisements that include trigger terms such as “the amount or percentage of any downpayment.” However, the definition of “downpayment” is…
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We want to promote some closed-end loan products in an advertisement designed for mobile devices. The advertisement would include terms that trigger certain additional disclosures under Regulation Z. Can we include a link in the advertisement to another webpage that will have the required disclosures?
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Yes, when an electronic advertisement includes terms that trigger additional disclosures, Regulation Z and its Official Interpretations permit the advertisement to include a link that takes consumers directly to the additional required information. For resources related to our guidance, please see: Regulation Z, 12 CFR 1026.24(e)(1) (“If a catalog or other multiple-page advertisement, or an…
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Are there any potential problems with us conducting a promotional giveaway for an iPad if it is open to anyone who wants to register? We are sending a promotional mailing to randomly selected addresses within a mile radius of our newest branch.
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No, we do not believe that this arrangement violates Illinois or federal lottery prohibitions. The Federal Deposit Insurance Act defines a “lottery” as an arrangement in which participants “advance money or credit to another in exchange for the possibility or expectation that one or more” will win a prize. The Illinois Criminal Code defines a…
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We would like to offer a promotional money market account with an introductory interest rate period that would expire on the same date for all customers. As a hypothetical example, if a customer opens an account today, the introductory rate would expire in two months, but if another customer opens an account a month later, the introductory rate would expire in just one month. In other words, the APY will change daily as we count down to the introductory rate’s expiration date. How should we advertise the annual percentage yield (APY)?
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We believe that your bank could advertise the APY “as of a specified date,” provided that the APY is updated appropriately (possibly daily, depending on the medium in which your advertisement appears). Because the introductory APY for these accounts will expire, they are treated as “stepped-rate” accounts under Regulation DD. Assuming that your advertisements will…
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We are holding a giveaway that is open to the public to give away a free tractor. No purchase is necessary, and participants do not need to be customers for a chance to win. Participants simply fill out a slip of paper providing their contact information, and we randomly select one winner. Are there any specific disclosures that we need to provide for this giveaway?
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Yes, the Illinois Prizes and Gifts Act requires nine specific disclosures to be made with any written promotional prize offer, and the Illinois Consumer Fraud and Deceptive Business Practices Act requires you to clearly and conspicuously disclose all material terms and conditions relating to the prize at the outset of the offer. In addition, if…
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Does Illinois law require us to include an NMLS number on our residential mortgage loan advertisements?
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No, Illinois law does not require banks to include NMLS numbers in residential mortgage loan advertisements. The Illinois Residential Mortgage License Act of 1987 requires mortgage loan originators who do not work for financial institutions to display their NMLS numbers on “all residential mortgage loan application forms, solicitations, and advertisements, including business cards and websites.”…
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If a bank employee sends an email to an acquaintance offering a bank deposit product, with a statement of the product’s annual percentage yield (APY), does that trigger our Truth in Savings Act (TISA) disclosures or CAN-SPAM requirements?
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Yes, an email that mentions a deposit product’s APY will trigger the TISA’s additional advertising disclosures. Regulation DD’s advertising requirements expressly apply to one-on-one communications such as telephone solicitations, and we would read it as also applying to emails. While Regulation DD does exempt “in-person discussions with consumers about the terms for a specific account,”…
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If a bank advertises in Spanish, does it have to provide loan documents in Spanish?
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No, we do not believe that advertising in Spanish obligates a bank to provide loan documents in Spanish. However, you should be aware of two statutory notice requirements in Illinois relating to residential mortgage foreclosures. One requirement applies to all foreclosure filings, and one requirement applies to foreclosures of residential rental properties located in the…