Differentiating federally insured bank deposits from non-insured savings – for example, from financial products offered by non-federally insured financial firms, such as fintechs – is the aim a rule proposed Tuesday by the federal bank deposit insurance agency.
Officially a part of regulations governing the use of sign and advertising statement requirements, the proposal by the Federal Deposit Insurance Corp. (FDIC) is aimed at clarifying the agency’s regulations regarding misrepresentations of deposit insurance coverage provided by the agency.
The FDIC said in a release that the proposal would require the use of signs that differentiate insured deposits from non-deposit products across banking channels and disclose to consumers that certain financial products are not “insured by the FDIC, are not deposits, and may lose value.”
The proposal would also, the agency said, clarify its regulations regarding misrepresentations of deposit insurance coverage by addressing specific scenarios where persons or entities provide information to consumers that may be misleading and confuse consumers as to whether they are doing business with a bank and whether their funds are protected by deposit insurance.
“For example, the proposed rule would clarify that FDIC-associated terms or images may not be used in marketing and advertising materials to imply or represent that any uninsured financial product is insured or guaranteed by the FDIC,” the agency said.
Further, the proposal is intended to modernize the use of the official FDIC sign found on the doors and in service areas of insured banks, the agency said. “The revisions are intended to extend the certainty and confidence provided by the FDIC official sign found at bank branch teller windows to digital channels, such as bank websites and mobile applications, through which depositors are increasingly handling their banking needs,” according to Acting FDIC Board Chairman Martin Gruenberg.
The proposal, issued by the agency board during its meeting Tuesday, was released with a 60-day comment period, which commences once the proposal is published in the Federal Register.
FDIC Issues A Proposed Rule To Modernize the Use of the FDIC Official Sign and Advertising Statement and to Clarify its Regulations Regarding False Advertising, Misrepresentations About Insured Status, and Misuse of the FDIC’s Name or Logo