Deposit Insurance or Share Insurance

A number of requirements regarding FDIC or NCUA membership and deposit insurance or share insurance apply equally to advertising and other activities conducted via social media as they do in other contexts.

Advertising and Notice of FDIC Membership.

Whenever a depository institution advertises FDIC-insured products, regardless of delivery channel, the institution must include the official advertising statement of FDIC membership, usually worded, "Member FDIC." An advertisement is defined as "a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business." The official advertisement statement must appear, even in a message that "promotes nonspecific banking products and services, if it includes the name of the insured depository institution but does not list or describe particular products or services." Conversely, the advertising statement is not permitted if the advertisement relates solely to nondeposit products or hybrid products (products with both deposit and nondeposit features, such as sweep accounts).

Advertising and Notice of NCUA Share Insurance.

Each insured credit union must include the official advertising statement of NCUA membership, usually worded, "Federally insured by NCUA" in advertisements regardless of delivery channel, unless specifically exempted. An advertisement is defined as "a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business." The official advertising statement must be in a size and print that is clearly legible and may be no smaller than the smallest font size used in other portions of the advertisement intended to convey information to the consumer. If the official sign is used as the official advertising statement, an insured credit union may alter the font size to ensure its legibility. Each insured credit union must display the official NCUA sign on its Internet page, if any, where it accepts deposits or opens accounts.

Nondeposit Investment Products.

As described in the "Interagency Statement on Retail Sales of Nondeposit Investment Products, when a depository institution recommends or sells nondeposit investment products to retail customers, it should ensure that customers are fully informed that the products are not insured by the FDIC or NCUA; are not deposits or other obligations of the institution and are not guaranteed by the institution; and are subject to investment risks, including possible loss of the principal invested.

Sources: FFIEC; FDIC

The Highlights:

  • Lenders advertising FDIC-insured products on social media must include the official advertising statement of FDIC membership,
  • Credit Unions must include the official advertising statement of NCUA membership.
  • All depository institutions must ensure that social media customers are informed that specific products are not insured by the FDIC or NCUA when applicable.