FINANCIAL INSTITUTION ADVERTISEMENT: SAMPLE CHECKLIST

There are specific legal and regulatory disclosures required when a bank advertises or promotes itself or its products and services and some forms of advertisement or promotion (e.g., lotteries, games or contests) are legally restricted.  In addition, there are a number of federal laws and regulations that impact various forms of communications that the Bank issues to the public and its customers.  These communications may constitute forms of advertisement, promotion or marketing.  The variety of federal laws and regulations do not have uniform definitions for the term “advertisement” as such word relates to financial institution promotions.  In general, the term “advertisement” means any message, initiated by the bank, in any media format, the purpose of which is to call attention to or promote the bank itself or any of its products and services.  The following list constitutes common media used for advertisement, promotion and marketing:

  • newspaper, magazine, leaflet, handout, promotional flyer, form letter, direct mail marketing or catalog advertisement or promotion;
  • radio or television commercial spots;
  • billboards, posters, signs or banners, whether interior or exterior to the bank’s premises;
  • phonebook, yearbook or directory advertisement or promotion;
  • clothing items, hats or caps, buttons or pens or other promotional goods with the bank’s name or reference to bank products or services;
  • information on the Bank’s website, other internet sites, links to other websites, pop-up advertisement or promotions or e-mail;
  • lists of names used for marketing purposes;
  • special offers that would waive fees or specially-structured accounts;
  • lotteries, drawings or other contests;
  • sponsoring of fund raisers in exchange for free advertisement or promotion;
  • allowing other businesses to advertise or promotion products or services on bank premises;
  • advertise or promote products or services whether included within or accompanying customer statements or receipts or mailed to customers or the general public in separate mailings;
  • telephone solicitations or other varieties of telemarketing; and
  • promotions that appear on ATM screens.

The following list would not be considered to constitute common media used for advertise or promotion and marketing:

  • direct personal contacts (e.g., follow-up correspondence, cost estimates for individual consumers or oral or written communication relating to the negotiation of a specific transaction;
  • informational material (e.g., interest rate and loan term memoranda, distributed solely to business entities);
  • notices that are required by federal or state laws or regulations, when no advertising or promotional information, other than that which is required by law, is displayed;
  • newspaper articles or electronic media coverage, the use of which is controlled by the news media and not the bank;
  • market-research or educational materials that do not solicit business or other goods or services; or
  • Communications about existing accounts (e.g., a promotion for the use of an existing credit account).

The following is a checklist of the various advertisement or promotional laws and regulations.  Within this list, items should be answered either “Yes,” “No” or “N/A”.  Any question answered “No” should receive further attention by the financial institution.

 

 

Yes

No

N/A

General Requirements

Does the advertisement or promotion contain only accurate information that is not misleading?

 

 

 

Does the advertisement or promotion include “Member FDIC” in conjunction with the bank name? (see below if advertisement or promotion includes nondeposit investment products)

 

 

 

Does the advertisement or promotion include the “Equal Housing Lender” logo?

 

 

 

Does the advertisement or promotion use pictures and images that tend to portray the bank as inclusive rather than exclusive with relation to race, sex, handicap, or any other prohibited discriminatory basis?

 

 

 

 

 

Yes

No

N/A

Lending Advertisements – Closed End Credit

Does the advertisement or promotion state only specific credit terms that actually are or will be arranged or offered by the bank?

 

 

 

Does the advertisement or promotion state the finance charge rates only as an “annual percentage rate” using that term (or the abbreviation, “APR”)?

 

 

 

If the annual percentage rate is stated and may increase after consummation, does the advertisement or promotion disclose that fact?

 

 

 

If the simple interest rate applied to the unpaid balance is stated in the advertisement or promotion, is it stated only in conjunction with, and not more conspicuously than, the APR?

 

 

 

Does the advertisement or promotion state the number of payments or period of repayment, the amount of any payment or the amount or rate of any finance charge?  If so, does the advertisement or promotion also include, clearly and conspicuously, the terms of repayment (number, amount and frequency of payments) and the “annual percentage rate” using that term (or the abbreviation, “APR”)?  An example of one or more typical extensions of credit with a statement of all terms applicable to each may be used.

 

 

 

If the advertisement or promotion is a multiple-page advertisement or promotion, does the advertisement or promotion include a table or schedule of all required disclosure information in one place, and does each reference to number of payments or period of repayment, the amount of any payment, or the amount or rate of any finance charge include a clear reference to the page on which the table or schedule is located?

 

 

 

Does the advertisement or promotion contain a statement that offer of credit is subject to credit approval?

 

 

 

 

 

Yes

No

N/A

Lending Advertisement – Open End Credit

Does the advertisement or promotion state only specific credit terms that actually are or will be arranged or offered by the bank?

 

 

 

Does the advertisement or promotion state clearly and conspicuously any minimum, fixed, transaction, activity or other similar charge that may be imposed?

 

 

 

Does the advertisement or promotion state clearly and conspicuously any periodic rate that may be applied expressed as an annual percentage rate, using that term (or the abbreviation, “APR”)?

 

 

 

If the lending product provides for a variable periodic rate, does the advertisement or promotion disclose that fact?

 

 

 

Does the advertisement or promotion disclose any membership or participation fee that could be imposed?

 

 

 

Does the advertisement or promotion contain a statement that the offer of credit is subject to credit approval?

 

 

 

 

 

Yes

No

N/A

Advertisement Requirements for Home Equity Open End Credit

Does the advertisement or promotion clearly and conspicuously state any loan fee that is a percentage of the credit limit under the loan product?

 

 

 

Does the advertisement or promotion clearly and conspicuously state an estimate of any other fees imposed (by the bank or third parties, such as appraisers) for opening the loan?  These fees may be stated as a single dollar amount or a reasonable range.

 

 

 

Does the advertisement or promotion clearly and conspicuously state the maximum annual percentage rate that may be imposed in a variable-rate loan?

 

 

 

If the advertisement or promotion states an initial annual percentage rate that is not based on the index and margin used to make later rate advertisement, does the advertisement or promotion also state the period of time such rate will be in effect?  Also, does the advertisement or promotion state, with equal prominence to the initial rate, a reasonably current annual percentage rate that would have been in effect using the index and margin?

 

 

 

If the advertisement or promotion contains any statement about any minimum periodic payment, does the advertisement or promotion also state, if applicable, that a balloon payment may result?

 

 

 

If the advertisement or promotion makes any reference to tax deductibility, does the advertisement or promotion state, “Consult a tax advisor regarding the deductibility of interest.”?

 

 

 

Does the advertisement or promotion avoid referring to a home-equity plan as “free money” or any other similar misleading terms?

 

 

 

 

 

Yes

No

N/A

Deposit Advertisements

Does the advertisement or promotion refer to an account as “free” or “no cost” (or use any similar term) only if no maintenance or activity fee may be imposed on the account?

 

 

 

Does the advertisement or promotion avoid using the term “profit” in referring to interest paid on an account?

 

 

 

If the advertisement or promotion states a rate of return, does it state the rate as an “annual percentage yield”, using that term?  The abbreviation “APY” may be used, provided that the term “annual percentage yield” is stated at least once in the advertisement or promotion.

 

 

 

If the advertisement or promotion states any other rate, is it only the simple “interest rate,” using that term and is it stated in conjunction with, but not more conspicuously than, the APY to which it relates?

 

 

 

If the advertisement or promotion refers to an account that has activity restrictions (savings accounts and money market accounts), does the advertisement or promotion indicate those activity restrictions that apply?

 

 

 

If the advertisement or promotion states the APY, does it also state, to the extent applicable, clearly and conspicuously the following (italics indicate special requirements with regard to certain advertisement or promotions – see below):

  • For variable rate accounts, a statement that the rate may change after the account is opened?
  • The period of time the APY will be offered, or a statement that the APY is accurate as of a specified date? This date must be recent in relation to the publication.  Use of the phrase “Rate is current through the date of this issue” if the publication shows the date.
  • The minimum balance required to obtain the advertised APY?  For tiered-rate accounts, the minimum balance required for each tier must be stated in close proximity and with equal prominence to the applicable APY.
  • The minimum balance to open the account, if it is greater than the minimum balance necessary to obtain the advertised APY?
  • A statement that fees could reduce earnings on the account?
  • For time accounts, the term of the account?
  • For time accounts, a statement that a penalty will or may be imposed for early withdrawal?

 

 

 

If the advertisement or promotion states a bonus, does the advertisement or promotion also state the following, to the extent applicable, clearly and conspicuously (italics indicate special requirements with regard to certain advertisement or promotions – see below):

  • The annual percentage yield, using that term (and all of the additional disclosure requirements above)?
  • The time requirement to obtain the bonus?
  • The minimum balance required to obtain the bonus?
  • The minimum balance to open the account, if it is greater than the minimum balance necessary to obtain the bonus?
  • When the bonus will be provided?

 

 

 

For the deposit advertisement or promotion requirements listed above (in italics), these may be omitted in advertisements or promotions in certain media.  These media include:

  • Broadcast or electronic media, e.g., television or radio (but not Internet),
  • Outdoor media, such as billboards, or
  • Telephone response systems

 

 

 

Signs inside the premises of the bank are not subject to any of these deposit advertising or promotional requirements (except in referring to accounts as “free” or “no cost” or similar term) if the sign:

  • States the rate as an “annual percentage yield,” using that term or the term “APY”.
  • States no other rate except that the interest rate may be stated in conjunction with the APY to which it relates.
  • Contains a statement that advertises or promotes consumers to contact an employee for further information about applicable fees and terms.

Indoor signs include advertisements or promotions displayed on computer screens, banners, preprinted posters and chalk or peg boards.  Advertisement or promotions may be indoor signs even though they may be viewed by consumers from outside.  An example is a banner, in a bank’s glass-enclosed branch office, that is located behind a teller facing customers but is readable by those passing the branch.  Any advertisement or promotion inside the premises that can be retained by a consumer (such as a brochure, flyer, or computer printout) is NOT an indoor sign.

 

 

 

 

 

Yes

No

N/A

Nondeposit Investment Products (including Brokerage,

      Insurance, Annuities)

Does the advertisement or promotion avoid any misleading information about the nature of these products or the lack of FDIC insurance?

 

 

 

Does the advertisement or promotion avoid use of the legend “Member FDIC” as it relates to these products?

 

 

 

Does the advertisement or promotion include clear and conspicuous disclosure of the following (as applicable):

  • NOT A DEPOSIT
  • NOT FDIC-INSURED
  • NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
  • NOT GUARANTEED BY THE BANK
  • MAY GO DOWN IN VALUE

 

 

 

Does the advertisement or promotion clearly and conspicuously identify the third party company selling the investment product?

 

 

 

If the advertisement or promotion combines advertisement or promotion for nondeposit investment products and FDIC-insured deposit products, is the information about nondeposit investment products clearly segregated from the information about the FDIC-insured products in the advertisement or promotion?

 

 

 

If the advertisement or promotion is for a product sold by a third party company, has the advertisement or promotion been approved by their compliance group?

 

 

 

 

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Nebraska Bankers Association

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