Topic: Advertising & Marketing
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We want to change our bank’s name. Would that affect our UCC financing statements? Do we need to refile all of our statements with the bank’s new name?
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Generally, you are not required to update your financing statements. On a case-by-case basis, the UCC does recognize that equitable principles in a particular case could overtake this general rule. Such cases likely would be rare, and we would note that even after your name change, potential creditors would be able to identify that a…
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Are we required to include the FDIC logo and advertising statement on a certificate of deposit (CD) prematurity notice?
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No, we do not believe that you must include the FDIC logo on CD maturity notices, but we recommend reviewing the prematurity notices to ensure that they could not be viewed as advertisements for your bank. The FDIC’s Advertisement of Membership rule requires banks to include the “Member FDIC” or “Member of FDIC” statement in…
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Most of our branches are located in Illinois, but one branch is located in another state. Can we offer a certificate of deposit (CD) promotion just at the out-of-state branch? We would advertise the promotion on lobby signs only in that branch. Also, the promotional terms of the CD would be included in the rate sheet for just that branch.
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Yes, we believe that your bank may offer a promotional CD only at your out-of-state branch. We should note that, in general, any promotion that singles out a group of customers creates some potential for fair lending concerns. Although a customer base is not a protected class, a promotion offered only to customers of a…
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We would like to target customers of a nearby bank that is closing by offering them a free order of checks when they open a checking account at our bank. We would require proof that the customers are coming from the other bank. Could this be viewed as a discrimination issue? Also, can we mention the closing bank’s name in advertisements?
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It is possible that your contemplated promotion could create fair lending concerns, but a full analysis would require additional facts comparing your bank’s customer base with the closing bank’s customer base. Although a customer base is not a protected class, a promotion offered only to customers of a particular bank conceivably could have a disparate…
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We are holding daily drawings for a week as part of our bank’s anniversary celebration. The drawings will be open to the public and will not require any money or other consideration to enter for a chance to win. We want to post the winner’s name next to the submission box each day. Will that create any privacy issues?
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We do not believe that federal or Illinois financial privacy laws would prohibit the posting of winner names, since winners are not necessarily bank customers. Federal and Illinois privacy laws protect “financial records” and “personally identifiable financial information.” These terms are defined broadly, including even the fact that an individual is a customer of your…
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Do we need to display the “Member FDIC” statement on promotional items, such as mugs, can cozies, lanyards or golf shirts? Are these items “of the type or character that make it impractical to include the official advertising statement”? Some of these items are large enough to include the disclosures, but the printable or engraveable space often is tiny, and printers and other providers often tell us that the disclosures will be unreadable.
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To qualify for an exception from displaying the “Member FDIC” statement on a promotional item, it must be “impractical” to include the statement due to the “type or character” of the item. From what you have told us, your bank has a strong argument that it is impractical to include the “Member FDIC” statement due…
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Our bank donates money to various fundraising events of local organizations and clubs. In exchange, our logo is listed as a sponsor on the organizations’ websites and at the event. If our logo is posted in a group of logos of other sponsors on their website or on a banner at the event, do we need to include “Member FDIC” as part of our logo? Is this still considered a commercial message? If our logo is listed on the organization’s website, and the logo is linked to our website, do we need to include member FDIC in the logo?
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No, we do not believe that your bank is required to include the “Member FDIC” statement on third party websites and banners promoting a fundraising event, provided that your bank name or logo is featured without a tagline or other promotional language. However, if you use your bank logo and it incorporates a tagline, we…
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We are opening a new branch and have limited room on the outdoor sign that will identify the branch. On the sign, can we shorten our bank name by removing one word – using “XYZ Bank” instead of our full name, which is “XYZ Community Bank”?
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Yes, we believe that you may display a shortened (but still identifiable) version of your bank name on an outdoor sign. In our view, omitting the word “Community” from the bank name should not create customer confusion. State and federal guidances require reasonable steps to avoid customer confusion when a bank uses a name other…
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We would like to purchase a building that we may use for a branch someday. In the meantime the building will be empty, but we want to attach a night drop box to the outside. Can we have one employee pick up the deposits every day? We are concerned about customers claiming their deposits never made it to the bank, but we do not have a large enough staff to allow two employees to do these daily pick-ups. The deposits will not be opened and recorded until after they reach the bank. We also plan to include an ATM outside of the building next to the night drop box. We will post a sign on the side of the building with our bank’s name, along with a member FDIC statement. We will also post the funds availability schedule outside next to the night drop box. If we place a sign above the drop box and ATM that states “ATM and Night Deposit Box,” would that also require the member FDIC advertising statement?
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We are not aware of any requirement that two bank employees must pick up the night drop box deposits and deliver them to the bank. In addition, we believe your bank may adopt a policy to limit your liability for night drop box deposits until after the deposits are recorded at the bank. Under the…