If you’re posting about savings accounts on social media, then you better comply with the Truth-in-Savings Act and Regulation DD. In other words, there are specific disclosures and disclaimers that must be used to help consumers make informed choices about your terms and conditions. Find out if you are in compliance.
The Truth-in-Savings Act is a consumer protection statute that assists consumers in comparing deposit accounts from various financial institutions. Basically, it allows consumers to compare applies to apples. Regulation DD, which implements the Truth in Savings Act, extends to any commercial message, in any medium, that directly or indirectly promotes the availability or terms of a financial product. As a result, financial institutions must satisfy certain regulatory requirements when promoting savings account on social media.
For purposes of promoting or advertising savings products on social media, there are two main compliance requirements that should be part of any social media compliance program for banks:
First, each social media post that mentions a savings product must be accurate – in other words – it shall not contain any inaccurate or potentially misleading statements. For example, a social media post promoting a savings account may not refer to or describe an account as “free” or “no cost” (or contain a similar term) if any maintenance or activity fee may be imposed on the account.
Second, if an advertisement states a rate of return, it must state that rate as an annual percentage yield. The abbreviation APY may be used, as long as the term “annual percentage yield” is stated at least once in the advertisement. And this is where things become a little tricky.
You see, if an APY is stated in an advertisement – even on social media – the advertisement (or social media post) must clearly and conspicuously include additional terms, conditions, and disclosures that will certainly not fit within a a single bank or credit union’s tweet. So ,what is a financial institution to do?
Banks and credit unions can comply with the Truth-in-Savings Act on social media by inserting an easy-to-follow hyperlink that directs customers to the complete terms and conditions in their posts. The hyperlink should take consumers directly to the complete terms that govern the savings account. This is commonly known as the “one click away” rule, as the social media post must take consumers directly to the applicable terms without having to navigate around the financial institution’s website.
Banks should also advise customers, whenever possible, that the hyperlink accompanying the advertisement will direct them to the complete terms and conditions or additional information about the financial product. This can be done, for example, by including language that says something along the lines of, “Click this link for complete terms and conditions,” Finally, the text of the hyperlink should make it clear that consumers can learn about the additional terms at the linked-webpage.
Following these steps will help mitigate risk when promoting savings accounts on social media, it’s important to remember that the Truth-in-Lending Act is just one of many financial laws and regulations that a financial institution must comply with on social media. According to FFIEC social media guidance, each financial institution that uses social media must have a risk management program that governs all financial regulations – including Regulation DD compliance.
This first step is to building your social media risk management program is to conduct a social media risk assessment. A risk assessment will determine your current level of compliance with regulations that govern the banking industry on social media, including the Truth in Savings Act. The Social Media Law Firm has conducted risks assessments for banks and credit unions across the US. With our risk assessment in hand, you’ll be able to market your financial institution on social media with the confidence that you’re protected from social media risks.
As experienced social media attorneys, we understand the complexities and frustrations you’re facing, and know how to get your financial institution back into compliance. In fact, we are the only law firm in the world that focuses exclusively on social media compliance for banks and social media compliance for credit unions. We can therefore tell you exactly what you need and what your costs will be up front so that you can enjoy the peace of mind that everything is being handled correctly. Best of all, we work hand-in-hand with your marketing and compliance departments to make sure you can accomplish your marketing goals in a safe and compliant manner.
So, what are you waiting for? Contact us today to get your financial institution into compliance.
