Proposed Rule Summary
Accuracy of Advertising & Notice of Insured Status
Prepared by NASCUS Legislative & Regulatory Affairs Department
NCUA is proposing changes to its Advertising rule, Part 740. This rule applies to federally insured state credit unions (FISCUs) by reference in Part 741.211. NCUA is proposing the addition of a 4th short statement “Insured by NCUA” as well as proposing the expansion of the exemption from the advertising statement requirement regarding radio and television advertisements. NCUA is also proposing the elimination of the requirement to include the official advertising statement on statements of condition required to be published by law.
NCUA also seeks comments on whether Part 740 should be modified to accommodate new trends in advertising such as social media, texting, and mobile banking applications.
NCUA’s proposed rule may be read here. The proposed rule is open for comment until December 4, 2017.
NCUA’s advertising rule requires each federally insured credit union (FICU) to display NCUA’s official sign.
The rule also provides FICUs three options
- FICUs may include the statement ‘‘This credit union is federally insured by the National Credit Union Administration.’’
- FICUs may also use the shorter version ‘‘Federally insured by the NCUA.’’
- As a third option, the official sign may be displayed in advertisements in lieu of the advertising statement.
Part 740.5(c) exempts several kinds of advertisements from the requirement to use of the above 3 advertising statements:
- Radio advertisements that are less than 15 seconds in duration
- television advertisements that are less than 15 seconds in duration
NCUA notes that these exemptions are less robust than FDIC’s for banks, which exempt bank radio and television ads of 30 seconds or less. NCUA also currently requires the official advertising statement on statements of condition required to be published by law. FDIC does not.
NCUA now proposes:
- creating a 4th short statement for the official advertising statement, “Insured by NCUA”
- Extending the exemption from the official statement to radio or TV advertisements of 30 seconds or less
- Eliminating the requirement that the official advertising statement be included in required reports of condition
NCUA also seeks comments on whether its advertising rules should be modified to facilitate the trend in advertising via new types of social media, mobile banking, text messaging and other digital communication platforms, including Twitter and Instagram.