Topic: Advertising & Marketing
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Do the ATM advertising restrictions in the Illinois Electronic Fund Transfer Act (EFTA) apply to nationally chartered banks? We have seen a few national banks advertise their products and services on the home screen of their ATMs, which is visible to non-customers.
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In our view, the advertising restrictions in the Illinois EFTA do not apply to national banks. The Illinois EFTA prohibits advertising to non-customers on ATM terminal screens, and this prohibition applies to banks “established under the laws of the United States.” However, a federal court of appeals (outside of Illinois) has determined that state laws…
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The Illinois Prizes and Gifts Act requires us to disclose the value of a promotional giveaway item. We are planning to hold a contest in which kids guess the value of a backpack full of back-to-school items. Do we have to disclose the exact value of the items?
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Yes, the Prizes and Gifts Act requires a written promotional prize offer to include “the retail value of each prize. . . .” Consequently, you will have to disclose the value of the backpack and school supplies in your giveaway disclosures. There may be alternative approaches that would capture the spirit of the game (teaching…
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We are hiring a third party vendor to print mailing labels for bank event flyer. Can we provide the list of names and addresses to the vendor for producing the labels, without violating our customers’ privacy? Our privacy policy states that we share customer information “for our marketing purposes — to offer our products and services to you.”
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Yes, you may share a list of customer names and addresses with your printer, provided that you enter into a written contract with the printer preventing it from misusing or losing your customers’ information. Regulation P permits a bank to share nonpublic personal information with a third party if the sharing is reflected in its…
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Our bank shares nonpublic personal information with nonaffiliated financial companies pursuant to a joint marketing agreement and also reports credit information to a credit bureau. Our privacy policy has not changed for three years. What are our privacy notice obligations under the Gramm-Leach-Bliley Act (GLBA)?
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You must provide initial privacy policy disclosures, including that you share customer information with nonaffiliated third parties pursuant to a joint marketing agreement. However, you are exempt from GLBA’s annual privacy notice requirement, subject to the discussion below. The GLBA requires financial institutions to provide initial privacy policy disclosures to new customers and re-disclose their…
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Under the Illinois Electronic Fund Transfer Act, are we prohibited from advertising our products on our ATM screens if the ATM can be accessed by non-customers?
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No, the Illinois Electronic Fund Transfer Act (EFTA) does not prohibit you from advertising your products and services on the screens of ATMs that may be accessed by non-customers, provided that the advertisement appears only to your customers after they insert a card issued by your bank. The Illinois EFTA generally prohibits a bank from…
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Besides the Interagency Statement on Branch Names from May 1, 1998, is there any other guidance regarding how a loan production office (LPO) is identified for advertising purposes? Our marketing department would like to refer to it as a “Loan Center” rather than “Loan Production Office.”
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In addition to the Interagency Statement on Branch Names that you mention, there is a short FDIC Advisory Opinion on the use of trade names in which the FDIC warns a bank to clarify on its website that a particular bank division is part of that same bank. This opinion also refers to the Interagency…
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Would the nine giveaway disclosures required under Illinois law apply to an advertisement in our lobby for anyone to guess the number of jelly beans in a bowl? The person with the closest guess would win an iTune gift card. In other words, is that advertisement considered a written promotion?
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Yes, the Illinois Prizes and Gift Act’s disclosure requirements apply to the advertisement you described. You correctly noted that the Act requires nine disclosures for every written promotional prize offer. We are unaware of any regulatory guidance or court cases that clarify whether the exact advertisement you describe would be considered a written promotional prize…
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Do we need to display the FDIC logo on everything that has our name on it â including a rib bib at a local festival that we sponsor or a brochure for a non-profit organizationâs event that we sponsor?
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Yes, we believe you are required to include the “Member of FDIC” statement on both items, subject to the discussion below. The FDIC Advertisement of Membership rules require banks to include the “Member of FDIC” or “Member FDIC” statement in advertisements, unless an exception applies. “Advertisement” is defined broadly as a commercial message that is…
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Under the CAN-SPAM Act, if we send a commercial email solicitation from our loan department and a customer opts out from future emails, can we notify the customer that their opt out applies only to the loan department and continue to send messages from other departments?
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Yes, you may give customers the opportunity to opt out of messages from just one department, provided you also include the option to stop all commercial messages from your bank. The Federal Trade Commission, the agency charged with issuing regulations for implementing the CAN–SPAM Act, permits commercial email senders to create a menu to allow…
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When advertising mortgage loan APRs, do we need to include odd days’ interest (meaning the interest accrued in the first days after a loan closing before the first full month)? Is there a recommended number of odd days to include, or is this a subjective choice for a lender?
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We are not aware of any requirement to include odd days’ interest in the calculation of a sample APR for advertising purposes. For resources related to our guidance, please see: Regulation Z, 12 CFR 1026.24(a) (“If an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor.”)