A proposed rule to prohibit false advertising or misleading representations of deposit insurance, or using the Federal Deposit Insurance Corp. (FDIC) name or logo in a manner to imply an uninsured product is backed by the FDIC, is out for comment until July 9, according to a Federal Register notice published Monday.
Monday’s proposal, approved for issuance April 21 by notation vote of the FDIC Board, is different from the earlier request for information (RFI) on how the might revise and clarify its official sign and advertising rules related to FDIC deposit insurance. Rather, the proposed rule would describe the process the FDIC will follow in identifying and investigating conduct that may violate section 18(a)(4) of the Federal Deposit Insurance Act; the standards under which such conduct will be evaluated; and the procedures the FDIC will follow when formally and informally enforcing the provisions of section 18(a)(4) of the Federal Deposit Insurance Corporation Act (FDICA).
The agency notes that Section 18(a)(4) of the FDICA prohibits any person from misusing the name or logo of the Federal Deposit Insurance Corporation (FDIC) or from engaging in false advertising or making knowing misrepresentations about deposit insurance.
The agency has noted an increase in the number of incidences “where people or entities have misused the FDIC’s name or logo or have made misrepresentations that would falsely suggest to the public that their products are FDIC-insured.”
RR: FDIC reissues RFI on official sign and advertising rules, plans proposed rule addressing misuse of FDIC sign, logo (April 8, 2021)