Proposal gives insured credit unions a more practical approach in TV, radio ads

New rules for advertising credit unions’ federal insurance coverage status were proposed Thursday that the National Credit Union Administration (NCUA) said were aimed at restoring a balance in regulatory burden for credit unions vis-à-vis that for banks by making credit union television and radio advertising more practical.

The NCUA Board, meeting Thursday in Alexandria, Va., issued a notice of proposed rulemaking for a 60-day comment period which recommends revising the agency’s rules requiring federally insured credit unions to use the agency’s “official advertisement statement” when advertising. More specifically, the proposal would allow the credit unions to use an additional, three-word option – aimed at TV and radio advertising — to the options already in force: “Insured by NCUA.”

The three options now in effect are: “This credit union is federally insured by the National Credit Union Administration” (the agency’s official advertising statement); the shorter version, “Federally insured by the NCUA;” and, as a third option, the official sign may be displayed in advertisements in lieu of the advertising statement.

In adding the fourth option, NCUA said it is providing regulatory relief to credit unions, and is focusing on the exemptions relating to radio and TV advertisements that are less than 15 seconds in duration.

“For many years, NCUA’s advertising and official sign regulations were essentially the same as those of the Federal Deposit Insurance Corporation (FDIC),” agency staff told the board. In 2011, staff added, the Board amended its advertising rule making it “more stringent” than FDIC’s rules. “Specifically, in 2011, while banks needed only to include the FDIC advertising statement in radio and television ads that exceeded 30 seconds, the 2011 NCUA rule change required FICUs to include NCUA’s official advertising statement in radio and television ads that exceeded 15 seconds.

“This additional requirement, which the Board now believes is unnecessary, affected more FICU ads and disrupted the balance between bank and FICU regulatory burden in this context,” staff added. “According to some FICUs, it also made it more difficult for FICUs to produce effective ads.”

In other action Thursday, the NCUA Board issued its 2018-22 strategic plan for a 60-day comment period. The plan, NCUA said, outlines three strategic goals for the agency:

  • Ensure a Safe and Sound Credit Union System.
  • Provide a regulatory framework that is transparent, efficient and improves consumer access.
  • Maximize organizational performance to enable mission success.

Proposed Rule: Accuracy of Advertising and Notice of Insured Status

NCUA Proposed 2018 – 2022 Strategic Plan