[Federal Register: February 11, 1997 (Volume 62, Number 28)]
[Proposed Rules]
[Page 6142-6147]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr11fe97-18]
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FEDERAL DEPOSIT INSURANCE CORPORATION
12 CFR Part 328
RIN 3064-AB99
Advertisement of Membership
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking; request for comment.
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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is proposing
to amend its regulation entitled ``Advertisement of Membership''. The
proposed rule would: Consolidate the provisions that require insured
institutions to display official signs; extend the official advertising
statement that is currently required for insured banks to all insured
depository institutions; streamline the exceptions to the required use
of the official advertising statement; prohibit the use of the official
advertising statement in advertisements concerning nondeposit
investment products or similar nondeposit products; and specifically
delegate authority to approve the translation of the official
advertising statement to certain FDIC officials. The FDIC is inviting
comment on all aspects of its proposal as well as certain alternatives
to its proposal as discussed herein. In addition, the FDIC is
soliciting comment with respect to issues raised regarding the
applicability of this regulation to insured depository institutions
that are transmitting information to, or conducting business with,
existing or potential customers, over a computer network, such as the
Internet.
DATES: Written comments must be received by the FDIC on or before April
14, 1997.
ADDRESSES: Written comments shall be addressed to Office of the
Executive Secretary, Federal Deposit Insurance Corporation, 550 17th
Street, N.W., Washington, D.C. 20429. Comments may be hand delivered to
Room F-402, 1776 F Street, N.W., Washington, D.C., 20429, on business
days between 8:30
[[Page 6143]]
a.m. and 5:00 p.m. [Fax number: (202) 898-3838; Internet address:
comments@fdic.gov]. Comments will be available for inspection at the
FDIC's Reading Room, Room 7118, 550 17th Street, N.W., Washington, D.C.
between 9:00 a.m. and 4:30 p.m. on business days.
FOR FURTHER INFORMATION CONTACT: Marc J. Goldstrom, Counsel, Legal
Division, Federal Deposit Insurance Corporation, Washington, D. C.
20429, telephone (202) 898-8807; Robert W. Walsh, Manager, Policy and
Program Development, Division of Supervision, Federal Deposit Insurance
Corporation, Washington, D.C. 20429, telephone (202) 898-6911.
SUPPLEMENTARY INFORMATION:
A. Need for the Proposed Rule
The FDIC is issuing this proposed rule in response to two
initiatives. Section 303 of the Riegle Community Development and
Regulatory Improvement Act of 1994 (CDRIA), Pub. L. 103-325, 108 Stat.
2160 (Sept. 23, 1994), requires that each federal banking agency,
consistent with the principles of safety and soundness, statutory law
and policy, and the public interest, conduct a review of the
regulations and written policies of that agency to, among other things:
streamline and modify those regulations and policies, and remove
inconsistencies and outmoded and duplicative requirements. In addition,
the FDIC has voluntarily committed itself to review its regulations on
a 5-year cycle. See Development and Review of FDIC Rules and
Regulations, 2 FED. DEPOSIT INS. CORP., LAW, REGULATIONS, RELATED ACTS
5057 (1984).
As a result of its review of part 328, and as described herein, the
FDIC has determined that certain aspects of the regulation may be
streamlined, another aspect of the regulation treats banks and savings
associations differently and accordingly should be modified to achieve
consistent treatment, another aspect of the regulation should be
modified to prohibit the use of the official advertising statement with
respect to the advertisement of nondeposit investment products and
similar nondeposit products, and a final aspect of the regulation
should clarify which FDIC officials are authorized to approve the
translation of the official advertising statement. In accordance with
section 303 of CDRIA, the FDIC believes that this proposal is
consistent with the principles of safety and soundness, statutory law
and policy, and the public interest.
B. The Current Rule and the Proposal
1. Signs
Part 328 contains requirements for the design and display of the
official bank sign of the FDIC. Only insured banks may use the official
bank sign. 12 U.S.C. 1828(a). 12 CFR 328.2(a).
Part 328 also contains requirements for the design and display of
the official savings association sign. Insured savings associations
must use the official savings association sign, and may not use the
official bank sign. Id. Sec. 328.4(a) and (e). Insured banks may use
either sign at their option. Id. Sec. 328.2(a).
The two sets of requirements are virtually identical. The FDIC
proposes to combine them into one.
Part 328 speaks of ``automatic service facilities'' in some places,
and of ``remote service facilities'' in other places. The two phrases
have the same meaning within part 328, however. The FDIC proposes to
use the phrase ``remote service facility'' in each place.
Part 328 contains an outdated reference to a date in 1989. The FDIC
proposes to delete it.
2. Advertising
(a) Proposal To Extend Official Advertising Statement Requirement to
Savings Associations
Part 328 requires insured banks to include the official advertising
statement in all their advertisements (with certain exceptions). Id.
Sec. 328.3(a). The basic form of the statement is ``Member of the
Federal Deposit Insurance Corporation'', which may be shortened to
``Member FDIC''. Id. Sec. 328.3(b). There is no equivalent requirement
for insured savings associations.
In light of the inconsistent treatment of banks and savings
associations, the FDIC proposes to require savings associations to use
the official statement in advertisements. The effect of this proposal
is that all insured depository institutions would be required to
include the statement in their advertisements.
The FDIC insures both banks and savings associations to the same
extent. See 12 U.S.C. 1811, 1813(c). There is no compelling
justification for applying the rule to banks and not savings
associations. Inconsistent treatment of banks and savings associations
on this matter only tends to confuse consumers as to whether the
institution's deposits are insured by the FDIC. We are of the view that
a consistent and uniform rule applicable to both banks and savings
associations will best serve the interests of the public and the
protection of the insurance funds.
The proposed rule is premised on the belief that if all insured
institutions are required to use the official advertising statement,
consumers are more likely to recognize the absence of federal deposit
insurance in advertisements by non-FDIC insured entities and can better
distinguish insured depository institutions from non-insured entities.
In today's environment with many non-banks providing banking type
services it is more important than ever that consumers have a method of
recognizing insured depository institutions. Recognition of FDIC
insurance is particularly needed in electronic media such as the
Internet where advertisements may originate from outside the United
States or from nonbank entities.
Alternatively, the FDIC could achieve consistent treatment of banks
and savings associations by eliminating the requirement that insured
banks use the official statement in advertisements. The effect of such
a proposal would be that all insured depository institutions would be
permitted (but not required) to include such a statement if they see
fit.
In support of such a proposal, one could argue that, as a general
matter, it is no longer necessary to require banks to use the official
statement in their advertising. Statutory and regulatory provisions
requiring banks to use the statement were enacted in 1935 1, a
time when the FDIC was new and unfamiliar. Moreover, having endured the
worst financial crisis in the nation's history, it was necessary to
restore public confidence in the banking system. Over the years, as a
result of the use of the official statement and other measures, banks
and FDIC insurance have become intertwined in consumers' minds. Indeed,
thrift customers arguably are aware of federal deposit insurance, even
though there is no requirement that thrifts use the official statement
in their advertisements.
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\1\ The statutory provision was originally enacted in the
Banking Act of 1935. Sec. 101 (v)(2), Banking Act of 1935, ch. 614,
49 Stat. 684, 701 (1935). Three months later, the FDIC promulgated a
regulation which, among other things, required banks to use the
official statement in advertisements. See Regulation III, section 3,
FDIC Annual Report 92 (1935). The statutory requirement for the
official statement in advertising was repealed in 1989. See
Financial Institutions Reform, Recovery and Enforcement Act of 1989
(``FIRREA''), Pub. L. 101-73, sec. 221, 103 Stat. 183, 266 (Aug. 9,
1989).
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Depository institutions and federal deposit insurance may be so
interconnected that, as discussed below, many consumers erroneously
assume that all bank products or services are FDIC insured.
Accordingly, a rule requiring all institutions to use the official
advertising statement may not
[[Page 6144]]
alleviate such confusion and possibly could increase confusion among
consumers.
The issue of advertising by depository institutions is of great
importance to the FDIC. We are concerned that individuals understand
when they are entrusting their money to an FDIC insured institution and
when they are not. We are also extremely concerned that individuals
understand when their funds are insured and when they are not. The FDIC
invites comment on whether the proposed rule or the alternative
discussed herein (or some other alternative) would better achieve these
objectives. In addition we invite comment on the related issue of the
increased burden to savings associations that the proposed rule would
entail versus the potential benefits to be achieved.
(b) Proposals To Consolidate and Streamline Exceptions to the Required
Use of the Official Advertising Statement and To Prohibit Insured
Depository Institutions From Using the Official Advertising Statement
in Advertisements Concerning Nondeposit Investment Products
Part 328 contains 20 exceptions to the required use of the official
advertising statement. 12 CFR 328.3(c). The FDIC proposes to
consolidate and streamline this paragraph into 11 exceptions. The two
separate exceptions for radio and television advertisements not
exceeding thirty seconds in time, 12 CFR 328.3(8) and (9), would be
combined into one exception without any change in substance.
The nine exceptions for advertisements relating to various types of
products or services which do not relate to deposits, 12 CFR 328.3(12)
through (20), would be combined into a single exception for
advertisements which do not relate to deposit products or services. The
current rule only has exceptions for advertisements relating to certain
types of nondeposit products or services. The proposed rule would
create an exception for any advertisement which does not relate to a
deposit product or service. This would have the effect of broadening
the exceptions to the required use of the official advertising
statement. The FDIC believes that there is no need to require the use
of the official advertising statement in any advertisement which does
not relate to deposit products or services. This proposal is consistent
with the purpose of the regulation and the mandates of section 303 of
the CDRIA.
Paragraph (d) of the proposed rule would prohibit an insured
depository institution from including the official advertising
statement or any similar statement in advertisements relating to
nondeposit investment products or similar nondeposit products. In
advertisements containing information about both insured deposits and
nondeposit investment products (or similar nondeposit products), the
information concerning insured deposits shall be clearly segregated
from the information about nondeposit investment products (or similar
nondeposit products) and shall contain either the official statement,
or any similar statement, including, but not limited to, statements to
the effect that the depository institution's deposits or depositors are
insured by the Federal Deposit Insurance Corporation to the maximum of
$100,000 for each depositor, or that specific deposit products are
insured by the Federal Deposit Insurance Corporation.
As indicated above, many consumers erroneously believe that all
bank or thrift products or services are FDIC insured. A recent
independent survey found that 30% of investors are not aware that the
FDIC does not insure bank mutual funds. 2 The FDIC is making this
proposal because it is extremely concerned that depository institution
customers understand what is and is not covered by FDIC insurance. The
FDIC believes that a prohibition on the use of the official advertising
statement in advertisements relating to nondeposit investment products
or similar nondeposit products and a requirement that advertisements
containing information about both insured deposits and nondeposit
investment products (or similar nondeposit products) clearly segregate
the information about the different products will help to minimize
customer confusion on this matter.
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\2\ Scott Smith, ``Survey Says 70% of Investors Know U.S.
Doesn't Insure Mutual Funds'', American Banker, May 15, 1996, at 3
(discussing results of a survey of Investor Protection Trust
conducted by Princeton Survey Research Associates).
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This proposal is premised on the belief that it would minimize
customer confusion with respect to the non-insured status of nondeposit
investment products, such as mutual funds, and other similar nondeposit
products. Conversely, there are other alternatives which may be more
effective at alleviating customer confusion. For example, it could be
argued that the proposal to require the use of the official statement
(or similar statement) in advertisements concerning both types of
products will further confuse consumers as to the insured and non-
insured status of the products involved. Accordingly, not requiring, or
prohibiting, the use of the official statement (or similar statement)
in advertisements containing information on both types of products may
be more effective at minimizing customer confusion. The FDIC invites
comment on the rule as proposed in paragraph (d), the alternatives
discussed herein, or any other possible approach. In addition we invite
comment on the related issue of the increased burden to insured
depository institutions that the proposed rule or the alternatives
would entail, versus the potential benefits to be achieved.
Another alternative to minimize customer confusion as to the
insured or non-insured status of the various products offered by
insured depository institutions is to require insured depository
institutions to make certain disclosures when they advertise nondeposit
investment products, such as mutual funds. Specifically, insured
depository institutions would be required to disclose that such
products are: not insured by the FDIC; not deposits or other
obligations of, or guaranteed by, the depository institution; and
subject to investment risk, including possible loss of the principal
amount invested.
These disclosure requirements would not impose a new obligation on
insured depository institutions. In fact, these provisions are
contained in the Federal banking agencies' ``Interagency Statement on
Retail Sales of Nondeposit Investment Products''. Financial Institution
Letter FIL 9-94 dated February 17, 1994 (the ``Interagency
Statement''). Among other things the Interagency Statement provides
that insured depository institutions should make the aforementioned
disclosures in all of their advertising and promotional materials with
respect to the retail sale of nondeposit investment products.
It may be desirable to include these provisions in part 328 in
light of the recent FDIC study which showed more than a fourth of the
institutions surveyed are still failing to make basic disclosures
required under the Interagency Statement. 3 By including the
advertising disclosure provisions in part 328, such provisions would be
of greater weight and enforceability.
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\3\ ``Survey of Nondeposit Investment Sales at FDIC-Insured
Institutions'', prepared for the FDIC by Market Trends, Inc., dated
May 5, 1996.
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The FDIC invites comment as to whether codifying these disclosure
provisions in part 328 will more effectively minimize customer
confusion with respect to the insured or non-insured status of the
various
[[Page 6145]]
products offered by insured depository institutions. In addition, we
invite comment on the related issue of any possible increased burden to
insured depository institutions that such provisions would entail
versus the potential benefits to be achieved.
(c) Proposals Enhance Safety and Soundness of Insured Depository
Institutions and Consumer Protection
In testimony before the U.S. House of Representatives' Subcommittee
on Financial Institutions and Consumer Credit 4 the Chairman of
the Board of Directors of the FDIC indicated that in conducting its
review of regulations pursuant to section 303 of CDRIA, the FDIC would
consider, among other things, whether the regulations are necessary to
ensure a safe and sound banking system and whether the regulations can
be justified on strong public policy grounds related to consumer
protection. The FDIC believes that the proposed rule meets these
criteria. It is intended to promote stability and confidence in the
banking system and to minimize the possibility of customer confusion
with respect to whether they are dealing with an FDIC insured
institution and whether the advertised product is insured by the FDIC.
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\4\ Also reported in 60 FR 62345 (December 6, 1995).
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(d) Statutory Authority
The FDIC has the statutory authority to, by regulation, require all
insured depository institutions to use the official statement in
advertising and to prohibit its use in the advertisement of nondeposit
investment products. Section 9 of the FDIA authorizes the FDIC to
prescribe ``such rules and regulations as it may deem necessary to
carry out the provisions of [the FDIA] or of any other law which it has
the responsibility of administering or enforcing''. 12 U.S.C. 1819(a)
Tenth. The Supreme Court has stated that ``[w]here the empowering
provision of a statute states simply that the agency may `make * * *
such rules and regulations as may be necessary to carry out the
provisions of this Act,' * * * the validity of the regulation will be
sustained so long as it is `reasonably related to the purposes of the
enabling legislation' ''. Mourning v. Family Publications Service,
Inc., 411 U.S. 356, 369 (1973) (quoting Thorp v. Housing Authority of
the City of Durham, 393 U.S. 268, 280-281 (1969)). Congress, in
creating the FDIC, sought to instill public confidence in the banking
system, promote safe and sound banking practices, eliminate runs on
banks by depositors, and safeguard deposits. See FDIC v. Allen, 584 F.
Supp. 386, 397 (E.D. Tenn. 1984); Doherty v. United States, 94 F.2d
495, 497 (8th Cir. 1938); Weir v. United States, 92 F.2d 634, 636 (7th
Cir. 1937). The proposed rule seeks to promote stability and confidence
in the banking system and avoid runs on banks by depositors. It is
therefore reasonably related to the enabling legislation. Similarly, in
promoting the aforementioned goals, the use or non-use of the official
statement is related to the safety and soundness of insured depository
institutions and is therefore subject to regulation under section 8(a)
of the FDIA, 12 U.S.C. 1818(a), and section 9(a) of the FDIA, 12 U.S.C.
1819(a) Tenth. See also FDIC v. Sumner Fin. Corp., 451 F.2d 898, 903
(``the FDIC has the power to make such rules as are reasonable and
necessary to effectuate the purposes of the act'').
(e) Clarification of Delegated Authority
Part 328 provides that 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.
12 CFR 328.3(e). The proposed rule clarifies that the Director,
Division of Compliance and Consumer Affairs; the Deputy Director,
Division of Compliance and Consumer Affairs; and any Regional Director,
Division of Compliance and Consumer Affairs, may provide such approval
on behalf of the FDIC.
C. Request for Comment--Electronic Banking Issues
In recent years, new and innovative media by which insured
depository institutions may market their products and transact business
have developed. Such media include computer networks such as the
Internet. Many financial institutions have established ``world wide web
sites'' 5 by which customers may obtain information about an
institution and, in certain cases, transact business with the
institution. This recent proliferation of world wide web sites gives
rise to certain issues concerning whether and under what circumstances
part 328 should apply with respect to the Internet or other computer
networks. The FDIC is not currently proposing any changes to the rule
to address explicit questions arising out of this new technology.
However, these issues are discussed below and the FDIC is also
soliciting comment for the purpose of gathering information from the
public on such issues.
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\5\ The FDIC is aware of over 200 insured depository
institutions that have a presence on the Internet.
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Neither the proposed or existing rule define the term
``advertisement''. The staff is of the view that such term as used in
the proposed and existing rule is not limited to television, radio, or
print advertisements. Rather, such term would include, but not be
limited to, advertisements transmitted via computer networks such as
the Internet. Consumers using the Internet may typically view any one
of an institution's web pages 6 directly, or may enter the
institution's top level or ``home page''. The staff is of the view that
every institution's home page is to some extent an advertisement and
accordingly should contain the official statement to the extent
required by the rule. 7 Whether subsidiary web pages contain
advertisements will vary depending upon the content of the information
within the particular web page. The staff is of the view that each such
subsidiary web page that contains an advertisement should include the
official statement, unless such advertisement is subject to one of the
exceptions in Sec. 328.3(c).
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\6\ Web pages vary in length and may in certain cases encompass
several computer screens of information.
\7\ The staff's view is with respect to part 328 only. We do not
express an opinion as to whether institutions' home pages are
advertisements for other purposes. Furthermore, staff's views on
this matter would not preclude an institution from demonstrating
that its home page does not contain an advertisement for purposes of
part 328.
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The FDIC also seeks comment on whether and under what circumstances
it should require insured depository institutions to utilize the
electronic equivalent of the official bank or savings association sign
in their world wide web sites. Should such determination be different
with respect to world wide web sites at which business may be
transacted as opposed to sites where only information is conveyed?
D. Paperwork Reduction Act
The proposed rule would not constitute a ``collection of
information'' within the meaning of section 3502(3) of the Paperwork
Reduction Act of 1995 (44 U.S.C. 3501 et seq.). Accordingly, the
procedural and analytical requirements prescribed by that Act do not
apply to the proposed rule.
E. Regulatory Flexibility Act
Compliance with the proposed rule takes only nominal advertising
space or time and does not add significantly to the cost of
advertisement. Insured banks have complied with the identical
requirement for over sixty years without significant expense.
Accordingly, the
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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 et
seq.). The provisions of the Regulatory Flexibility Act relating to an
initial and final regulatory flexibility analysis (5 U.S.C. 603 and
604) are not applicable.
List of Subjects in 12 CFR Part 328
Advertising, Bank deposit insurance, Savings associations, Signs
and symbols.
For the reasons stated in the preamble, the Board of Directors of
the FDIC proposes to amend 12 CFR part 328 as follows:
PART 328--ADVERTISEMENT OF MEMBERSHIP
1. The authority citation for part 328 is revised to read as
follows:
Authority: 12 U.S.C. 1818(a), 1819, 1828(a).
2. Section 328.0 is revised to read as follows:
Sec. 328.0 Scope.
This part 328 describes the official bank sign and the official
savings association sign, and prescribes their use by insured
depository institutions. It also prescribes the official advertising
statement insured depository institutions must include in certain
advertisements. Finally, it prohibits the use of the official
advertising statement and similar statements in advertisements
concerning nondeposit investment products. For purposes of this part
328, the term ``insured depository institution'' includes insured
branches of a foreign bank. Insured depository institutions which
maintain offices that are not insured in foreign countries are not
required to include the advertising statement in advertisements
published in foreign countries.
3. Section 328.2 is revised to read as follows:
Sec. 328.2 Procurement and display of official signs.
(a) Display--(1) Official sign. Each insured depository institution
shall continuously display its official sign at the locations specified
in paragraph (a)(2)(i) of this section, as follows:
(i) Insured banks. At the option of the insured bank, its official
sign is either the official bank sign or the official savings
association sign.
(ii) Insured savings associations. Insured savings associations
shall display the official savings association sign as provided herein.
An insured savings association shall not display the official bank sign
at its principal place of business or at any of its branches.
(2) Locations--(i) Required locations. Except as provided in
paragraph (a)(2)(ii) of this section, an insured depository institution
shall display its 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.
(ii) Other locations--(A) Within the institution. An insured
depository institution may display its official sign in other locations
within the insured depository institution in other sizes, colors, or
materials.
(B) Other facilities. An insured depository institution is
permitted, but is not required, to display its official sign on remote
service facilities including automated teller machines, cash dispensing
machines, point-of-sale terminals, and other electronic facilities
where deposits are received. If an insured depository institution
displays its 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 its official
sign must clearly show that the sign refers only to a designated
insured depository institution(s).
(3) Newly insured institutions--(i) Initial grace period. A
depository institution becoming an insured depository institution shall
not be required to display its official sign until twenty-one (21) days
after its first day of operation as an insured depository institution.
(ii) Early display permitted. An insured depository institution may
display its official sign prior to the date display is required.
(b) Obtaining signs--(1) Procurement from the FDIC--(i) Cost;
design. An insured depository institution may procure the appropriate
official signs from the Corporation for official use at no charge.
(ii) Order blanks. The Corporation shall, upon request, furnish an
order blank to an insured depository institution for use in procuring
official signs.
(iii) Safe harbor rule. Any insured depository institution which
promptly, after the receipt of an order blank, fills it in, executes
it, and properly directs and forwards it to the Federal Deposit
Insurance Corporation, Washington, D.C. 20429, shall not be deemed to
have violated this section on account of not displaying an official
sign, or signs, unless the insured depository institution shall omit to
display such official sign or signs after receipt thereof.
(2) Procurement from other sources. Insured depository institutions
may procure official signs or signs reflecting variations in size,
colors, or materials from commercial suppliers.
(c) Receipt of deposits at same teller's station or window as
noninsured institution. An insured depository institution may not
receive deposits at any teller's station or window where any noninsured
institution receives deposits or similar liabilities, except a remote
service facility as defined in Sec. 303.0(b)(18) of this chapter.
(d) Required changes in signs. The Corporation may require any
insured depository institution, upon at least 30 days' written notice,
to change the wording of its official signs in a manner deemed
necessary for the protection of depositors or others.
4. Section 328.3 is revised to read as follows:
Sec. 328.3 Official advertising statement and manner of use by insured
depository institutions.
(a) Mandatory use. Each insured depository institution shall
include the official advertising statement, prescribed in paragraph (b)
of this section, in all of its advertisements except as provided in
paragraphs (c) and (d) of this section.
(1) An insured depository institution is not required to include
the official advertising statement in its advertisements until thirty
(30) days after its first day of operation as an insured depository
institution.
(2) In cases where the Board of Directors of the Federal Deposit
Insurance Corporation shall find the application to be meritorious,
that there has been no neglect or willful violation in the observance
of this section and that undue hardship will result by reason of its
requirements, the Board of Directors may grant a temporary exemption
from its provision to a particular depository institution upon its
written application setting forth the facts. For the procedure to be
followed in making such application see Sec. 303.8 of this chapter.
(3) In cases where advertising copy not including the official
advertising statement is on hand on the date the requirements of this
section become operative, the insured depository institution may cause
the official advertising statement to be included by use of a rubber
stamp or otherwise.
(4) When a foreign depository institution has both insured and
noninsured U.S. branches, the depository institution must identify
[[Page 6147]]
which branches are insured and which branches are not insured in all of
its advertisements requiring the use of the official advertising
statement.
(b) Official advertising statement. The official advertising
statement shall be in substance as follows: ``Member of the Federal
Deposit Insurance Corporation''. The word ``the'' or the words ``of
the'' may be omitted. The words ``This bank is a'', ``This savings
association is a'', ``This savings and loan is a'', or the words ``This
institution is a'' or the name of the insured depository institution
followed by the words ``is a'' may be added before the word ``member.''
The short title ``Member of FDIC'' or ``Member FDIC'' or a reproduction
of the ``symbol'' may be used by insured depository institutions at
their option as the official advertising statement. The official
advertising statement shall be of such size and print to be clearly
legible. Where it is desired to use the ``symbol'' of the Corporation
as the official advertising statement, and the ``symbol'' must be
reduced to such proportions that the small lines of type and the
Corporation seal therein are indistinct and illegible, the Corporation
seal in the letter C and the two lines of small type may be blocked out
or dropped.
(c) Types of advertisements which do not require the official
advertising statement. The following types of advertisements need not
include the official advertising statement:
(1) Statements of condition and reports of condition of an insured
depository institution which are required to be published by state or
federal law;
(2) Stationery (except when used for circular letters), envelopes,
deposit slips, checks, drafts, signature cards, deposit passbooks,
certificates of deposit, and other similar items;
(3) Signs or plates in the banking office or attached to the
building or buildings in which the banking offices are located;
(4) Listings in directories;
(5) Advertisements not setting forth the name of the insured
depository institution;
(6) Display advertisements in depository institution directory,
provided the name of the depository institution is listed on any page
in the directory with a symbol or other descriptive matter indicating
it is a member of the Federal Deposit Insurance Corporation;
(7) 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;
(8) Advertisements by radio or television, other than display
advertisements, which do not exceed thirty (30) seconds in time;
(9) Advertisements which are of the type or character making it
impractical to include thereon the official advertising statement
including, but not limited to, promotional items such as calendars,
matchbooks, pens, pencils, and key chains;
(10) 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
the maximum of $100,000 for each depositor;
(11) Advertisements which do not relate to insured deposit products
or services.
(d) Prohibited use. (1) Except as provided in paragraph (d)(2) of
this section, an insured depository institution may not include the
official advertising statement or refer to either federal deposit
insurance or the Federal Deposit Insurance Corporation in any
advertisement relating to nondeposit investment products or similar
nondeposit products.
(2) In advertisements containing information about both insured
deposits and nondeposit investment products or similar nondeposit
products, the information concerning insured deposits shall be clearly
segregated from the information about nondeposit investment products
(or similar nondeposit products) and shall contain either the official
statement, or any similar statement, including, but not limited to,
statements to the effect that the depository institution's deposits or
depositors are insured by the Federal Deposit Insurance Corporation to
the maximum of $100,000 for each depositor, or that specific deposit
products are insured by the Federal Deposit Insurance Corporation.
(e) Billboard advertisements. Where an insured depository
institution has billboard advertisements in use as of [the effective
date of the final rule] which are required to include the official
advertising statement and the insured depository institution has direct
control of such advertisements either by possession or under the terms
of a contract, the institution shall, as soon as it can consistent with
its contractual obligations, cause the official advertising statement
to be included therein.
(f) 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. Authority to provide such
approval on behalf of the Corporation is hereby delegated to the
Director, Division of Compliance and Consumer Affairs; the Deputy
Director, Division of Compliance and Consumer Affairs; and each
Regional Director, Division of Compliance and Consumer Affairs.
Sec. 328.4 [Removed]
5. Section 328.4 is removed.
By order of the Board of Directors.
Dated at Washington, D.C., this 21st day of January, 1997.
Federal Deposit Insurance Corporation.
Jerry L. Langley,
Executive Secretary.
[FR Doc. 97-3319 Filed 2-10-97; 8:45 am]
BILLING CODE 6714-01-P
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