The Bank wishes to place an advertisement on the wall of a building. It wants to know whether it can advertise particular products and rates and, if so, how it would make disclosures. It also would like to know whether any limitations exist in relation to the size of the advertisement.
Summary. Bank can advertise particular products on a billboard. For deposit products, Regulation DD exempts such advertisements from certain disclosures. Regulation Z, however, does not make such an exemption. The FDIC Official Statement and HUD logotype and legend must be used appropriately. While Federal regulations do not place restrictions on the size of such advertisements, other local ordinances may.
Analysis.
While Regulation Z and Regulation DD do not place size limitations on advertisements, such restrictions may exist with local ordinances.
Regulation DD exempts outdoor media (e.g., billboards from certain disclosures)
– A statement that the rate may change for variable rate accounts – The time the APY is available – The minimum opening deposit, if greater than the minimum required to earn the advertised APY – A statement that a penalty may be imposed for early withdrawal – For bonus offerings, an indication of when the bonus will be provided.
However, if the advertisement states an Annual Percentage Yield (“APY”), the Bank is still required to indicate the following in the advertisement:
– The term “Annual Percentage Yield” at least once – The minimum balance required to earn the APY (for tiered-rate accounts, the minimum balance for each tier must be stated with the APY); – For time accounts, the term of the account.
Regulation Z does not provide any exemption for outdoor media advertisements for credit. Such advertisements must fulfill the “clear and conspicuous” standard and include the required disclosures when triggering terms are used, such as the term of the loan for closed-end loans, or the APR, for open-end loans.
FDIC advertising rules require the “official advertising statement” (i.e, “Member of the Federal Deposit Insurance Corporation”) to be prominently displayed in all Bank advertising other than advertisements that are exclusively for a product that is not a deposit product. Rather, one may use “Member FDIC,” or the FDIC symbol. No exemption is made for outdoor media. [12 CFR 328.3]
The Department of Housing and Urban Development rules require the display of the Equal Housing logotype and Equal Housing Lender legend in all print advertisements for credit to be secured by a dwelling. No exemption is made for outdoor media. [12 CFR 338.3].
