By Tanya Narwekar
The use of the FDIC logo at teller windows, on bank doors and in other places — not to mention the disclosure of “Member FDIC” in advertising — is a staple of how banks present the deposit insurance guarantee to their customers and the public. On May 1, these practices will receive a major update, and banks need to figure out how to comply.
The rule changes how banks display the FDIC logo online, on apps and at branches and ATMs. It also bars the logo’s use in advertising and marketing that misrepresent deposit insurance coverage. The ambiguity in the rule’s language is a headache for banks as they work on implementation, according to Ashtyn Landen, senior director of prudential regulation at ABA.
“One of the confusing terms was ‘continuously,’” Landen says. “What does it mean to have the FDIC sign continuously on your website? Does that mean when you scroll, the sign follows you down the screen? Does it mean it pops up in different places?”
Take advantage of FDIC resources
Despite the time crunch and lack of clarity, industry experts say banks must do everything they can to proactively prepare for implementation.
Landen suggests rereading the rule, looking at the FDIC’s questions and answers, and attending the agency’s webinar series about rule requirements. At these webinars, the FDIC will “discuss additional questions regarding the rule” and could “clear up any confusion around what exactly is required for the website and mobile apps,” she says.
The session on May 30 reviewed subparts A and B, including the major requirements and objectives, and answered common questions. The second, on July 31, discussed requirements and offered details on FDIC signage on websites — including when signage is not required — and examples of violations. (Visit the FDIC’s site to view the earlier presentation slide decks and for updates.)
Not one size fits all
Questions about integrating the new rule will differ depending on the bank, according to Leslie Callaway, senior director for compliance, outreach and development at ABA and the team lead for ABA’s members-only Compliance Hotline.
“The bigger banks are looking at this and have been since day one. Smaller banks that don’t have the resources are struggling a little bit more. It really depends on the size of the bank [and] the resources they have,” she says. “There’s a lot of rules around ATMs, so how many ATMs do you have? How many new ATMs are you going to have? There’s a lot of moving parts.”
Since implementation challenges will vary, it’s important for banks to communicate with their examiner for help with the changes and to ensure readiness for May 1, says Therese Kieffer, specialized consulting manager at Wolters Kluwer.
“Where you’ve got the non-deposit product that you’re also offering in your branch and you want to put it up on digital display, it might be worthwhile having a conversation with your examiner as to what they would recommend [in terms of appropriate disclosure] in that kind of situation,” Kieffer says. “You might want to run some of your drafts of your mobile app page or some of your designs past your examiner.”
Editor’s Note: At the time this article went to print in the November/December 2024 issue of the magazine, the compliance deadline was Jan. 1, 2025. The FDIC has since extended the deadline to May 1, 2025, which is reflected in this digital version.
Tanya Narwekar is a writer in Austin, Texas. She was an intern at the American Bankers Association in 2024.
