Topic: Advertising & Marketing
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Does the 2015 amendment to the Gramm-Leach-Bliley Act (GLBA), eliminating the annual privacy notice requirement in certain circumstances, take precedence over Regulation P, which has not yet been amended to implement the change?
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Yes, the GLBA amendment takes precedence over Regulation P. Your primary regulator (the Federal Reserve Board) has adopted interagency examination procedures reflecting the GLBA amendment, and we expect that the CFPB eventually will finalize its proposed rules implementing the GLBA amendment in Regulation P. If your bank meets the requirements for the annual privacy notice…
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We are a bank holding company that owns two banks with seven branches. To appear as one bank for marketing purposes, we want to change our logo and use a shortened version of our full name for all branches (e.g., “Our Bank” instead of “Our Bank of ____ City”). All customer documents, statements, agreements still would contain our full, legal name. I found some past guidance from the IDPFR and FDIC regarding the use of trade names where the primary concern was customer confusion. We think this rebranding actually will eliminate customer confusion by clarifying that all branches are part of the same bank. Do you see any issues with us doing this?
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No, we do not see any issues with your rebranding strategy. The state and federal guidances that you mentioned require banks to take reasonable steps to avoid customer confusion when a bank begins using a name other than its legal, corporate name. Particularly, the regulatory agencies are concerned that customers may be misled into believing…
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Our bank has a deposit and loan rate sheet that is labeled “for internal use only” and is not to be given to customers. On occasion, a teller or the receptionist will give the sheet to a customer upon request. The sheet has the names of the products, the interest rate, and the APY/APR as applicable, but no disclosures. Would this qualify as advertising? If so, what other information would be required? Is there any chance we are covered because it indicates “for internal use only” and isn’t meant to be distributed to the public?
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In our view, an internal rate sheet does constitute an advertisement if it is provided to customers, even if it indicates that it is “for internal use only.” An advertisement is “a commercial message, appearing in any medium that directly or indirectly promotes” an account or credit transaction. Providing information to customers about your account…
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When we send out periodic statements, we include a notice that our privacy policy has not changed in the past year, that it is available on our website, and that it is available to be mailed on request. But what about customers who do not receive periodic statements (such as loan customers, cd holders, etc.)? Do we need to mail our annual privacy notice to those customers?
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No, under the FAST Act’s amendment of the Gramm-Leach-Bliley Act (GLBA), your bank is exempt from the annual privacy notice requirement for all customers, even those who do not receive periodic statements. The GLBA requires financial institutions to re-disclose their privacy policy annually, either by mailing a full annual privacy notice or through certain alternative…
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Does the notice and opt-out requirement in the Fair Credit Reporting Act (FCRA) regarding information sharing between affiliates for marketing purposes apply to business customers?
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No, the notice and opt-out requirements that are triggered when affiliates share information for marketing purposes do not apply to business customers. The FCRA requires affiliates that share consumer information for marketing purposes to clearly and conspicuously disclose to consumers what information will be shared and provide them an opportunity to opt out. However, under…
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Can our wholly owned subsidiary share its customer information with us for marketing purposes? What steps do we need to take before we can receive and use this information?
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Yes, you may use customer information that you receive from your wholly owned subsidiary for marketing purposes, provided that you disclose this arrangement to your customers and offer them the opportunity to opt out. The Illinois Banking Act’s prohibition on disclosing customer financial records does not apply to the exchange in the regular course of…
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We just completed a data bureau conversion that eliminated savings and loan passbooks. Now that we are not using the passbook system, are we required to provide receipts for deposits not made in person? Or can we notify customers that we plan to discontinue sending receipts and that they can review their deposits by accessing their accounts online? Our deposit agreements do not require receipts, but I want to confirm whether any state law applies.
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We are not aware of any Illinois law that requires financial institutions to issue receipts for deposits not made in person. If your account agreements do not require receipts, you may discontinue issuing them. However, we recommend that you proceed with your plan to provide your customers with advance notice of the change. In addition,…
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We have decided to reduce our bank’s lobby hours. Are there any notification requirements in Illinois that are required prior to this change?
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No, we are not aware of any laws that expressly address a reduction in branch hours. We do recommend that you check your account agreements to ensure that they do not include relevant notification requirements. We also recommend posting advance notice of the changed hours in your main bank and branch lobbies, as well as…
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We are considering providing new mortgage borrowers a $90.00 gift card for membership to a local organization. Would there be any tax or regulatory implications for a gift like this?
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We are not aware of any disclosure or other requirements that would apply to such a gift, provided that it is given to all new mortgage borrowers uniformly. Notably, the IRS rules require you to report gifts that are valued over $600 on its 1099-MISC form, but the $90 gift cards would not trigger this…