A final rule on false advertising, misrepresentation of insured status, and misuse of the logo of the federal insurer of bank deposits is up for consideration at a meeting of the agency’s board May 17 (Tuesday), the agency said in an agenda published Wednesday.
The meeting of the board of the Federal Deposit Insurance Corp. (FDIC) is open to the public to observe, but not in person: it will broadcast live via the Internet beginning at 10 a.m. ET.
In April 2021, the agency board proposed a rule that would prohibit false advertising or misleading representations of deposit insurance, or using the FDIC name or logo in a manner to imply an uninsured product is backed by the deposit insurer.
The agency said then that it 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.”
The proposal 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.