IV. Risk Areas

The use of social media to attract and interact with customers can impact a financial institution’s risk profile, including risk of harm to consumers, compliance and legal risks, operational risks, and reputation risks. Increased risk can arise from poor due diligence, oversight, or control on the part of the financial institution. As noted previously, this Guidance is meant to help financial institutions identify potential risks to ensure institutions are aware of their responsibilities to address risks within their overall risk management program.

Deposit and Lending Products

Social media may be used to market products and originate new accounts. When used to do either, a financial institution is expected to take steps to ensure that advertising, account origination, and document retention are performed in compliance with applicable consumer protection and compliance laws and regulations. 

The following laws and regulations may be relevant to a financial institution's social media activities. This list is not all-inclusive. Each financial institution should ensure that it periodically evaluates and controls its use of social media to ensure compliance with all applicable federal, state, and local laws and regulations, and incorporation of guidance, as appropriate.

Source: FFIEC

The Highlights:

  • Lender social media usage comes with a certain level of risk, from a variety of categories: compliance and legal risks; reputational risk; and operational risk.
  • Knowing what problems may be posed ahead of time can help lenders create plans to mitigate these risks.
  • All social media (including but not limited to posting, profile creation, messaging with consumers, etc.) is considered advertising, and all advertising must meet existing federal, state, and regulatory guidelines.