The Federal Deposit Insurance Corporation (FDIC) issued a notice of proposed rulemaking (proposal) to amend part 328 of its regulations to modernize the rules governing use of the official FDIC sign and insured depository institutions’ (IDIs’) advertising statements to reflect how depositors do business with IDIs today, including through digital and mobile channels. The proposal also would clarify the FDIC’s regulations regarding misrepresentations of deposit insurance coverage by addressing specific scenarios where consumers may be misled as to whether they are doing business with an IDI and whether their funds are protected by deposit insurance. Through this proposal, the FDIC hopes to extend the certainty and confidence consistently provided by the FDIC official sign at traditional IDI branch teller windows, for almost 90 years, to the evolving digital channels through which depositors are increasingly handling their banking needs today.
Statement of Applicability: This Financial Institution Letter applies to all FDIC-insured depository institutions.
In recent years, there have been significant changes in the banking landscape, including continued evolution of bank branches in serving depositors, substantially increased reliance on internet and mobile banking channels to access banking products and services, and growth in financial technology (fintech) companies working with IDIs.
The FDIC has also observed increased misleading representations about deposit insurance, which can result in consumer confusion and harm. These types of misleading statements create uncertainty and could dilute and weaken the confidence that underpins banks and our nation's broader financial system.
While many of the developments in the marketplace are beneficial, some developments may make it more difficult for depositors and consumers to understand when they are doing business with an IDI and when their funds are protected by the FDIC’s deposit insurance.
For IDIs, the proposal would:
- modernize the rules governing the display of the FDIC official sign in branches and address the application of sign requirements to non-traditional branches;
- help reduce consumer confusion by requiring FDIC signs across all banking channels, including IDIs' digital and mobile channels (which functionally serve as digital teller windows);
- require the use of signs that differentiate insured deposits from non-deposit products across banking channels and that disclose to consumers that certain financial products are not insured by the FDIC, are not deposits, and may lose value;
- provide IDIs with additional flexibility for satisfying official sign and advertising statement requirements, including allowing IDIs that only offer deposit products on the premises to display the official sign in one or more locations in a branch and permitting use of electronic media to satisfy sign display requirements; and
- require IDIs to maintain policies and procedures addressing compliance with part 328 for the IDI and certain third party relationships.
The proposal would clarify the FDIC's rules regarding misrepresentations, which apply to all persons (including nonbanks), by addressing specific scenarios where information provided to consumers may be misleading. For example, the proposal would clarify:
- that persons or entities may not use FDIC-associated terms or images in marketing and advertising materials to imply or represent that any uninsured financial product or entity is insured by the FDIC; and
- that persons or entities may not make statements regarding deposit insurance in a context that involves both deposits and non-deposit products without disclosing that non-deposit products: are not insured by the FDIC; are not deposits; and may lose value.
To clarify that representations about crypto-assets would fall into the scope of Part 328, the proposal would amend the definitions of “non-deposit product” and “uninsured financial product” to include crypto-assets.
Comments on the proposed rule will be accepted for 60 days after publication in the Federal Register.