On December 20, 2023, the FDIC released FIL-65-2023 addressing FDIC official signs, advertising requirements, and misrepresentation of insured status. In recent years, the ability to utilize technology for accessing financial institution products and services has led to an exponential growth in financial technology or Fintech. With this growth comes the potential for customer confusion regarding the FDIC’s deposit insurance coverage. This ruling, which will take effect April 1, 2024, and have a mandatory compliance date of January 1, 2025, will allow customers to better understand when they are conducting business with a covered institution. This new rule will address several amendments to FDIC’s part 328 including a new sign related to deposit insurance.
The rule will allow flexibility to the placement of deposit insurance signs at teller windows. If no non-deposit products are offered on the premises, the option to display one or more signs that are visible and legible from anywhere in the area is available. If non-deposit products are offered on the premises, a deposit insurance sign must be displayed at each teller window. In addition to this portion of the final rule, Insured Deposit Institutions (IDIs) that have non-traditional teller or CSR locations, such as café-style locations, would be required to display the required signage in one or more locations, large enough to be seen from anywhere in the area, if insured deposits are usually and normally received in that location.
This first section of the new rule will require IDIs to post signage, not in close proximity to official signs, that non-deposit products: are not insured by the FDIC; are not deposits; and may lose value. Non-deposit products are defined as any product that is not a “deposit”, including but not limited to: insurance products, annuities, mutual funds, securities, and crypto-assets. There are no official design or size requirements for the non-deposit products sign, but the “non-deposit product” definition was updated to inform us that credit products and safe deposit boxes were not included in the definition. This section will apply to branches and non-traditional locations.
Further, the rule will add the requirement that IDIs display the new official digital sign on the website’s homepage, landing and login pages, and transactional screening involving deposits on all mobile deposit and banking platforms. A picture of the new digital sign is provided below. Requirements for the new digital sign include “FDIC” being displayed with a wordmark size of 37.36 x 15.74px in the color navy blue and the “FDIC-Insured – Backed by the full faith and credit of the U.S. Government” display in 12.8px Source Sans Pro Web font (regular 400 italic) with black lettering. If, due to background color, the digital sign would be illegible, then the text can be displayed in white. Also, under this section of the rule, requirements are set forth for non-deposit signs on digital deposit-taking channels. The non-deposit digital sign is required to be continuously displayed on each IDI page in relation to non-deposit products indicating that they are: not insured by the FDIC; are not deposits; and may lose value. The non-deposit sign is prohibited from being displayed in close proximity to the official FDIC signage. This section also requires a one-time notification of the non-deposit language for a bank customer who has logged into their account on the IDI’s website and accesses a third party’s non-deposit products via the IDI’s website (e.g., hyperlink). The one-time notification is required to be displayed during each web session after the customer clicks the link and before the customer leaves the IDI’s webpage.
ATMs that receive deposits but do not offer access to non-deposit products are required to display either a physical FDIC official sign on the machine or an FDIC official digital sign on the home screen and any deposit or transactional screens. ATMs that receive deposits and allow access to non-deposit products must display the official digital sign on the home page and each transaction page relating to deposit products, and state that non-deposit products are not insured by the FDIC, are not deposits, and may lose value on each transaction page relating to non-deposit products. Any ATMs accepting deposits that go into service after January 1, 2025, are required to display the new official FDIC digital sign on screen.
In addition to the above sections, the new rule also addresses the FDIC official advertising statement, misrepresentations of FDIC insurance, and crypto-assets. The new rule will allow the use of “FDIC-insured” or the current standard “Member FDIC” in any advertisement that requires the official FDIC-insured advertising statement. The FDIC also set forth requirements for policies and procedures regarding part 328. An insured depository institution must establish and maintain written policies and procedures to achieve compliance with this part.
Along with scenarios in which misrepresentation or material omissions can take place, the rule also covers pass-through insurance stating the final rule does not prescribe specific information but does require disclosure language stating that certain conditions must be satisfied to obtain pass-through insurance. Additionally, crypto-assets have been added to the definition of “non-deposit product”, subjecting them to section 18(a) and part 328.
FDIC digital sign: