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The �౦��Ϸ���� Board is considering today a proposal to update the �౦��Ϸ����’s regulations on use of the official �౦��Ϸ���� sign and insured depository institutions’ (IDIs) advertising statements.  The proposal would also clarify the �౦��Ϸ����’s regulations on false advertising, misrepresentation of insured status, and misuse of the �౦��Ϸ����’s name or logo.

The �౦��Ϸ���� last made major amendments to the sign and advertising statement rules in 2006.  The current rules focus on insured depository institutions’ display of the official sign at teller windows or stations. The proposal would revise rules to reflect how depositors do business with banks today, including through digital and mobile channels. The revisions are intended to extend the certainty and confidence provided by the �౦��Ϸ���� 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.

The proposed rule would continue to provide for display of the official �౦��Ϸ���� sign at bank teller windows. This includes separate requirements for non-traditional branches, such as cafes, or other places of business, ensuring that the official �౦��Ϸ���� sign is also displayed for consumers in these locations.

The proposal would also provide for a new digital version of the official �౦��Ϸ���� sign on certain IDI webpages and other digital deposit-taking channels, such as banking apps.  For many consumers, these channels may serve as the primary method of accessing banking products, acting essentially as a “digital teller window.”  This makes it critical to require a digital sign indicating when a customer is interacting directly with an IDI rather than a non-bank, and when their funds are insured by the �౦��Ϸ����.

The proposal would require banks to display signage differentiating non-deposit products from insured deposits, where both types of products are offered to consumers.  More specifically, IDIs would be required to display signage indicating that the non-deposit products are, “not insured by the �౦��Ϸ����; are not deposits; and may lose value.”  This requirement would be consistent with longstanding interagency guidance that many banks already follow for physical locations, and would help to make clear when a consumer’s money is insured by the �౦��Ϸ���� and when it is not.

In addition, the proposed rule would provide important clarification of the �౦��Ϸ����’s regulations on false advertising, misrepresentation of insured status, and misuse of the �౦��Ϸ����’s name or logo.

The Federal Deposit Insurance Act prohibits any person from engaging in false advertising by misusing the name or logo of the �౦��Ϸ���� or from making knowing misrepresentations about the existence of, or the extent or manner of, deposit insurance.1

The �౦��Ϸ���� has observed an increasing number of instances online where firms or individuals have misused the �౦��Ϸ����’s name or logo, or have made false or misleading representations about deposit insurance.  For example, the �౦��Ϸ���� has seen instances where scammers have made false or misleading assertions that their products offer the protections afforded by �౦��Ϸ���� insurance.  We have also seen circumstances where certain non-banks were making unsubstantiated claims about deposit insurance.  These practices can confuse consumers about whether they are dealing with an insured institution and if they are protected by deposit insurance.

Today’s proposal would clarify the regulations on misrepresentations regarding deposit insurance to expressly address several of these situations, making clear when statements or omissions constitute a misrepresentation under the statute.

Finally, the proposal would require IDIs to establish and maintain written policies and procedures to comply with the rule. Such policies and procedures would include, as appropriate, provisions related to monitoring and evaluating the activities of third parties that provide deposit-related services to the IDI or offer the IDI’s deposit-related products or services to other parties.

Next year, 2023, will mark the 90^th anniversary of the �౦��Ϸ����.  This timely proposal would bring the certainty, safety, and confidence historically provided by the �౦��Ϸ���� sign and �౦��Ϸ���� insurance to today’s varied banking channels, including digital banking.

I would like to thank the �౦��Ϸ���� staff for their thoughtful work in bringing this Notice of Proposed Rulemaking to the Board today. This NPR is being issued with a 60 day comment period. I look forward to reviewing the comments the �౦��Ϸ���� receives.

I am pleased to support this proposed rule.

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  12 U.S.C. § 1828(a)(4).