WASHINGTON–After some fintechs and other providers have claimed or implied they carried or carry FDIC insurance, the federal bank regulator has proposed a new rule that seeks to eliminate such misrepresentations.
As CUToday.info reported here, some fintechs have made claims their investment offerings carry deposit insurance, with the CFPB also earlier announcing a crackdown of its own.
During its board meeting this week, the agency said its proposal would require the use of signs that differentiate insured deposits from non-deposit products across banking channels and disclose to consumers that certain financial products are not “insured by the FDIC, are not deposits, and may lose value.”
In addition, the agency said in a statement the proposal is aimed at clarifying its regulations regarding misrepresentations of deposit insurance coverage by addressing specific scenarios where persons or entities provide information to consumers that may be misleading and confuse consumers as to whether they are doing business with a bank and whether their funds are protected by deposit insurance.
Additional Objectives
The FDIC further said the proposed rule seeks to:
- Clarify that FDIC-associated terms or images may not be used in marketing and advertising materials to imply or represent that any uninsured financial product is insured or guaranteed by the FDIC.
- Modernize the use of the official FDIC sign found on the doors and in service areas of insured banks, the agency said. “The revisions are intended to extend the certainty and confidence provided by the FDIC 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,” said Acting FDIC Board Chairman Martin Gruenberg.
The proposal is out for 60 day comment.
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