[Federal Register: July 17, 2006 (Volume 71, Number 136)]
[Proposed Rules]
[Page 40440-40443]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17jy06-15]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 328
RIN 3064-AD05
Advertisement of Membership
AGENCY: Federal Deposit Insurance Corporation (FDIC).
ACTION: Notice of proposed rulemaking.
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SUMMARY: The FDIC is proposing to revise its regulation governing
official FDIC signs and advertising of FDIC membership. The proposed
rule would replace the separate signs used by Bank Insurance Fund (BIF)
and Savings Association Insurance Fund (SAIF) members with a new sign,
or insurance logo, to be used by all insured depository institutions.
In addition, the proposed rule would extend the advertising
requirements to savings associations and consolidate the exceptions to
those requirements. The proposed rule also would restructure the text
in certain sections in order to make them easier to read. Finally, the
current prohibition pertaining to receipt of deposits at the same
teller's station or window as noninsured institutions would be placed
in its own section.
DATES: Written comments must be received by the FDIC on or before
September 15, 2006.
ADDRESSES: You may submit comments by any of the following methods:
Agency Web site: http://www.FDIC.gov/regulations/laws/federal/propose.html.
Follow the instructions for submitting comments. E-mail: comments@fdic.gov..
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
Hand Delivered/Courier: The guard station at the rear of
the 550 17th Street Building (located on F Street), on business days
between 7 a.m. and 5 p.m.
Public Inspection: Comments may be inspected and
photocopied in the FDIC Public Information Center, 3501 North Fairfax
Drive, Room E-1002, Arlington, Virginia 22226, between 9 a.m. and 5
p.m. on business days.
Internet Posting: Comments received will be posted without
change to http://www.FDIC.gov/regulations/laws/federal/propose.html,
including any personal information provided.
Federal e-Rulemaking Portal: http://www.regulations.gov.
Follow the instructions for submitting comments.
FOR FURTHER INFORMATION CONTACT: Kara L. Ritchie, Policy Analyst, (202)
898-3716, Division of Supervision and Consumer Protection (DSC); John
M. Jackwood, Acting Chief, Compliance Section, (202) 898-3991, DSC;
Kathleen G. Nagle, Supervisory Consumer Affairs Specialist, (202) 898-
6541, DSC; or Richard B. Foley, Counsel, (202) 898-3784, Legal
Division, Federal Deposit Insurance Corporation, Washington, DC 20429.
SUPPLEMENTARY INFORMATION:
I. The Proposed Rule
A. Section 328.0--Scope
The scope provision would be revised by the proposed rule to
reflect that there would now be one sign used by all insured depository
institutions and the advertising requirements in section 328.3 would be
extended to savings associations.
B. Section 328.1--Official Sign
Pursuant to section 18(a) of the Federal Deposit Insurance Act (FDI
Act), as amended by section 2(c)(2) of the Federal Deposit Insurance
Reform Conforming Amendments Act of 2005, Public Law 109-173, 119 Stat.
3601-19 (FDIRCA Act), the FDIC must promulgate regulations prescribing
a sign or signs that each insured depository institution will be
required to display at each place of business it maintains. Section
18(a)(1)(B) of the FDI Act, as amended by the FDIRCA Act, specifies
that the required sign must include a statement that insured deposits
are backed by the full faith and credit of the United States
Government. Therefore, this section would be revised to eliminate the
separate official bank sign and official savings association sign, and
display a black and white version of the new official sign that would
be used by all insured depository institutions.
The proposed official sign would be 7 by 3 in
size, with black lettering and gold background. The design is similar
in color scheme and layout to the current bank sign but with the
following differences: First, the language above ``FDIC'' states ``Each
depositor insured to at least $100,000,'' instead of ``Each depositor
insured to $100,000.'' The revised language more accurately reflects
the new deposit insurance coverage limits in the FDIRCA Act and the
Federal Deposit Insurance Reform Act of 2005, Public Law 109-171, title
II, subtitle B, 120 Stat. 9-21. Second, the proposed sign includes the
FDIC's internet website and leaves out the FDIC seal. Finally, the full
faith and credit statement required by the FDIRCA Act is in italics on
the left side of the proposed sign and is bordered by a semi-circle of
stars, a design that partially reflects the current savings association
sign.
Section 328.1 also describes the ``symbol'' of the Corporation that
insured depository institutions could use at their option as the
official advertising statement. The ``symbol'' would be that portion of
the proposed official sign consisting of ``FDIC'' and the two lines of
smaller type above and below ``FDIC.''
C. Section 328.2--Display and Procurement of Official Sign
Conforming changes have been proposed to this section in order to
make it applicable to all insured depository institutions, not just
insured banks. The proposed rule also restructures this section to make
it easier to read but without making any substantive changes.
Part 328 uses the term ``automatic service facilities'' in some
places, and the term ``remote service facilities'' in other places,
although the two terms have the same meaning within that part. The
proposed rule uses the term ``remote service facility'' in each place
and defines that term in section 328.2(a)(1)(ii) to include any
automated teller machine, cash dispensing machine, point-of-sale
terminal, or other remote electronic facility where deposits are
received.
The current sections 328.2 and 328.4 are virtually identical,
except that one applies to insured banks and the other applies to
insured savings associations. The key difference between these
provisions is that section 328.4 has a
[[Page 40441]]
paragraph (e) prohibiting insured savings associations from using the
official bank sign. As the new official sign would be applicable to all
insured depository institutions, the proposed rule would combine
current sections 328.2 and 328.4 into a new section 328.2.
As in the current section 328.2, the proposed revision would allow
an insured depository institution to vary the size, color, and
materials of the official sign at its expense, and to display such
altered signs within the institution at locations other than where
insured deposits are received. However, the official sign provided by
the FDIC would adhere to the specifications of section 328.1, and only
the official sign could be displayed where insured deposits are
received. The proposed rule refers to the FDIC's Internet Web site,
http://www.fdic.gov, for information on obtaining the official sign.
D. Section 328.3--Official Advertising Statement Requirements
(1) Proposal to Extend Official Advertising Statement Requirement to
Savings Associations
Section 328.3 requires insured banks to include the official
advertising statement in all their advertisements (with certain
exceptions). The basic form of the statement is ``Member of the Federal
Deposit Insurance Corporation,'' which may be shortened to ``Member
FDIC.'' There is no equivalent requirement for insured savings
associations. The FDIC proposes to revise section 328.3 to provide for
consistent treatment of banks and savings associations by requiring all
insured depository institutions to include the official advertising
statement in their advertisements.
The FDIC believes there are compelling reasons to apply the
advertising requirements equally to banks and savings associations,
particularly now that the BIF and SAIF have been merged into one fund,
the Deposit Insurance Fund, and there will be one official sign for
both banks and savings associations. Consistent treatment of banks and
savings associations on this matter would significantly enhance the
public's ability to determine whether an institution's deposits are
federally insured or not, and it would eliminate any possibility for
public confusion. A consistent and uniform rule applicable to both
banks and savings associations would best serve the interests of the
public and best protect the Deposit Insurance Fund.
(2) Proposals To Consolidate Exceptions to the Required Use of the
Official Advertising Statement
There are currently twenty exceptions to the required use of the
official advertising statement. The FDIC proposes to simplify the
advertising requirements by reducing the number of exceptions to five.
The proposed rule does this by limiting the applicability of section
328.3 to advertisements that specifically promote deposit products or
generally promote banking services offered by an insured depository
institution. The latter would include advertisements that contain an
institution's name and a statement about the availability of general
banking services. The term advertisement is defined as a commercial
message, in any medium, that is designed to attract public attention or
patronage to a product or business. By limiting the applicability of
section 328.3 in this way, most of the current exceptions to the
advertising requirements become unnecessary. The exemptions eliminated
from the proposed rule are for: statements and reports of condition;
bank supplies; listings in directories; and advertisements relating to
loan services, safekeeping box services, trust services, real estate
services, armored car services, service or analysis charges, securities
services, travel department business, and savings bank life insurance.
(3) Other Proposed Revisions
The proposed rule also would make certain clarifying, non-
substantive, and conforming editorial changes in section 328.3. In
addition, three provisions in the current rule have not been included
in the proposed rule because they address narrow situations that rarely
occur. The first provision, section 328.3(a)(2), allows the Board to
grant temporary exemptions from the advertising requirements for good
cause. The second provision, section 328.3(a)(3), concerns advertising
copy not including the official advertising statement that is on hand
on the date the advertising requirements become operative. The third
provision, section 328.3(d), addresses how to handle outstanding
billboard advertisements that require use of the official advertising
statement.
E. Section 328.4--Prohibition Against Receiving Deposits at Same
Teller's Station or Window as Noninsured Institution
Sections 328.2 currently has a provision that prohibits banks from
receiving deposits at the same teller's station or window where a
noninsured institution receives deposits, except for a remote service
facility. Since this provision does not relate directly to the display
and procurement of the official sign and is significant enough that it
should be set apart in a separate section, the proposed rule would move
the provision to section 328.4.
II. Effective Date
In order to give insured depository institutions a transition
period to adjust to the new requirements in the proposed revision of
part 328, the final rule would be effective six months after
publication in the Federal Register.
III. Request for Comments
The FDIC requests comments on all aspects of the proposed rule and,
in particular, the following issues:
(1) Effective Date
The final rule would be effective six months after publication in
the Federal Register. The FDIC solicits comment on whether the proposed
effective date would give insured depository institutions sufficient
time to adjust to the new requirements in the proposed revision of part
328.
(2) Use of Official Advertising Statement in Advertisements Marketing
Non-Deposit Products
Many insured depository institutions offer both deposit products
and non-deposit products (NDPs). NDPs include both insurance and
investment products. Where NDPs are offered, insured depository
institutions are required to disclose that they are not federally
insured.\1\ However, consumers may be confused about Federal deposit
insurance coverage when the official advertising statement is used in
advertisements that market NDPs. The FDIC therefore solicits comment on
whether the final rule should include a provision that would: (1)
Prohibit use of the official advertising statement in advertisements
relating solely to NDPs or hybrid products containing NDP and deposit
features (e.g., sweep accounts); and (2) require that the official
advertising statement be clearly segregated from information about NDPs
in advertisements containing information about both NDPs and insured
deposit products.
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\1\ See e.g., 12 CFR 343.40 (Consumer Protection in Sales of
Insurance rules applicable to FDIC supervised institutions) and the
Interagency Policy Statement on retail Sales of Nondeposit
Investment Products, issued on February 15, 1994.
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[[Page 40442]]
IV. Paperwork Reduction Act
The proposed rule does not contain any ``collections of
information'' within the meaning of section 3502(3) of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3502(3)).
V. Regulatory Flexibility Act
Display of the official sign is required by section 18(a) of FDI
Act, as amended by section 2(c)(2) of the FDIRCA Act. There would not
be any compliance costs with displaying the official sign, because it
would be provided by the FDIC free of charge. Insured banks have
complied with similar advertising requirements for over seventy years
without significant expense. Although savings associations have not
been subject to such advertising requirements, many have used the
official advertising statement voluntarily. Moreover, mandatory
compliance with the advertising requirements by savings association
would not entail significant expense. Accordingly, the Board hereby
certifies that the proposed rule would not have a significant economic
impact on a substantial number of small entities within the meaning of
the Regulatory Flexibility Act (5 U.S.C. 601-612).
VI. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families
The FDIC has determined that the proposed rule will not affect
family well-being within the meaning of section 654 of the Treasury and
General Government Appropriations Act, enacted as part of the Omnibus
Consolidated and Emergency Supplemental Appropriations Act of 1999
(Pub. L. 105-277, 112 Stat. 2681).
List of Subjects in 12 CFR Part 328
Advertising, Bank deposit insurance, Savings associations, Signs
and symbols.
For the reasons stated above, the Board of Directors of the Federal
Deposit Insurance Corporation hereby proposes to amend part 328 of
title 12, chapter III of the Code of Federal Regulations by revising it
to read as follows:
PART 328--ADVERTISEMENT OF MEMBERSHIP
Sec.
328.0 Scope.
328.1 Official sign.
328.2 Display and procurement of official sign.
328.3 Official advertising statement requirements.
328.4 Prohibition against receiving deposits at same teller's
station or window as noninsured institution.
Authority: 12 U.S.C. 1818(a), 1819 (Tenth), 1828(a).
Sec. 328.0 Scope.
Part 328 describes the official sign of the FDIC and prescribes its
use by insured depository institutions. It also prescribes the official
advertising statement insured depository institutions must include in
their advertisements. For purposes of part 328, the term ``insured
depository institution'' includes insured branches of a foreign
depository institution. Part 328 does not apply to non-insured offices
or branches of insured depository institutions located in foreign
countries.
Sec. 328.1 Official sign.
(a) The official sign referred to in this part shall be
7 by 3 in size, with black lettering and gold
background, and of the following design:
(b) The symbol of the Corporation, as used in this part, shall be
that portion of the official sign consisting of ``FDIC'' and the two
lines of smaller type above and below ``FDIC.''
Sec. 328.2 Display and procurement of official sign.
(a) Display of official sign. Each insured depository institution
shall continuously display the official sign at each station or window
where insured deposits are usually and normally received in the
depository institution's principal place of business and in all its
branches.
(1) Other locations--
(i) Within the institution. An insured depository institution may
display signs in other locations within the insured depository
institution that vary from the official sign in size, colors, or
materials.
(ii) Other facilities. An insured depository institution may
display the official sign on or at Remote Service Facilities. If an
insured depository institution displays the official sign at a Remote
Service Facility, and if there are any noninsured institutions that
share in the Remote Service Facility, any insured depository
institution that displays the official sign must clearly show that the
sign refers only to a designated insured depository institution(s). As
used in this part, the term ``Remote Service Facility'' includes any
automated teller machine, cash dispensing machine, point-of-sale
terminal, or other remote electronic facility where deposits are
received.
(2) Newly insured institutions. A depository institution shall
display the official sign no later than its twenty-first
[[Page 40443]]
day of operation as an insured depository institution, unless the
institution promptly requested the official sign from the Corporation,
but did not receive it before that date.
(b) Procuring official sign. An insured depository institution may
procure the official sign from the Corporation for official use at no
charge. Information on obtaining the official sign is posted on the
FDIC's Internet Web site, http://www.fdic.gov. Alternatively, insured
depository institutions may procure from commercial suppliers signs
that vary from the official sign in size, colors, or materials.
However, only the official sign may be displayed at stations or windows
where insured deposits are usually and normally received. Any insured
depository institution which has promptly submitted a written request
for an official sign to the Corporation shall not be deemed to have
violated this section by failing to display the official sign, unless
the insured depository institution fails to display the official sign
after receipt thereof.
(c) Required changes in sign. The Corporation may require any
insured depository institution, upon at least thirty (30) days' written
notice, to change the wording of the official sign in a manner deemed
necessary for the protection of depositors or others.
Sec. 328.3 Official advertising statement requirements.
(a) Advertisement defined. The term advertisement, as used in this
part, shall mean a commercial message, in any medium, that is designed
to attract public attention or patronage to a product or business.
(b) Official advertising statement. The official advertising
statement shall be in substance as follows: ``Member of the Federal
Deposit Insurance Corporation.''
(1) Optional short title and symbol. The short title ``Member of
FDIC'' or ``Member FDIC,'' or a reproduction of the ``symbol'' of the
Corporation (as defined in section 328.1 of this part), may be used by
insured depository institutions at their option as the official
advertising statement.
(2) Size and print. The official advertising statement shall be of
such size and print to be clearly legible. If the ``symbol'' of the
Corporation is used as the official advertising statement, and the
``symbol'' must be reduced to such proportions that the two lines of
smaller type above and below ``FDIC'' are indistinct and illegible,
those lines of smaller type may be blocked out or dropped.
(c) Use of official advertising statement in all advertisements.
(1) General requirement. Except as provided in paragraph (d) of
this section, each insured depository institution shall include the
official advertising statement, prescribed in paragraph (b) of this
section, in all advertisements that either promote deposit products and
services or generally promote banking services offered by the
institution.
(2) Foreign depository institutions. When a foreign depository
institution has both insured and noninsured U.S. branches, the
depository institution must also identify which branches are insured
and which branches are not insured in all of its advertisements
requiring use of the official advertising statement.
(3) Newly insured institutions. A depository institution shall
include the official advertising statement in its advertisements no
later than its twenty-first day of operation as an insured depository
institution.
(d) Types of advertisements which do not require the official
advertising statement. The following types of advertisements do not
require use of the official advertising statement:
(1) Signs or plates in the insured depository institution offices
or attached to the building or buildings in which such offices are
located;
(2) Joint or group advertisements of banking services where the
names of insured depository institutions and noninsured institutions
are listed and form a part of such advertisements;
(3) Advertisements by radio or television, other than display
advertisements, which do not exceed thirty (30) seconds in time;
(4) Advertisements which are of the type or character that make it
impractical to include the official advertising statement, including,
but not limited to, promotional items such as calendars, matchbooks,
pens, pencils, and key chains; and
(5) Advertisements which contain a statement to the effect that the
depository institution is a member of the Federal Deposit Insurance
Corporation, or that the depository institution is insured by the
Federal Deposit Insurance Corporation, or that its deposits or
depositors are insured by the Federal Deposit Insurance Corporation to
at least $100,000 for each depositor.
(e) Official advertising statement in non-English language. The
non-English equivalent of the official advertising statement may be
used in any advertisement, provided that the translation has had the
prior written approval of the Corporation.
Sec. 328.4 Prohibition against receiving deposits at same teller's
station or window as noninsured institution.
(a) Prohibition. An insured depository institution may not receive
deposits at any teller's station or window where any noninsured
institution receives deposits or similar liabilities.
(b) Exception. This section does not apply to deposits received at
a Remote Service Facility.
Dated at Washington DC, this 11th day of July, 2006.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 06-6261 Filed 7-14-06; 8:45 am]
BILLING CODE 6714-01-P
