Why It Matters to Your Bank
Seems like Facebook has had a tough couple
of years, at least in relation to discriminatory
advertising allegations. So, what does this mean
for your bank?
First, if your bank uses social media advertising, a policy stating that you don’t discriminate
is not sufficient. Reviewing the content of individual ads may also not adequately manage fair
housing and fair lending risk. To ensure that
your bank is not creating social discrimination,
your compliance reviews must include a detailed analysis of the settings within your social
media ad targeting platforms, likely for each ad.
You must also document these settings to prove
that you didn’t use them in a discriminatory
way when sending out social media marketing.
During a recent conversation with a bank
compliance officer, she shared that during her
compliance examination, the examiners had
not only asked to see her social media policy,
but also wanted a screenshot of the ad targeting
parameters for each ad run on a social media
platform. While she shared that her social media policy and procedures prohibited the bank
from using ad targeting, when she chatted with
her marketing department, she was surprised to
find they had been using ad targeting features
for months. Luckily, no protected class factors
had been used—but what if they had?
Second, in most cases, compliance officers
are not reviewing every single social media post
to ensure compliance with non-discriminatory
requirements. Often, a bank may establish
guidelines and parameters to prevent compli-
ance violations. Do those guidelines include ad
targeting settings? How often are they being
reviewed? Seems like it’s a good time to take a
closer look and make any adjustments to tighten
up these guidelines.
Third, you may need to re-train your staff,
specifically anyone managing social media or
human resources, on how certain ad targets can
create a disparate impact or discriminate against
potential borrowers or job seekers. While overt
demographics like race, gender and age tend to
be easy to spot, some factors are more subtle.
The HUD complaint also lists targeted criteria
like “child care,” “parenting” and “accessibility” as
terms that could be inferred as part of a protected
class that may not be as obviously discriminatory
upon first glance to your staff.
Lastly, if your bank uses an ad agency, out-sources social media management or allows
third parties to market your products and services, the risk only grows. While most banks
have expansive due diligence programs in place
to evaluate risks related to third parties, those
policies and procedures may or may not include
tracking of advertising and, more specifically,
social media ad targeting.
More than Facebook
While the recent investigations have focused
on Facebook ad targeting, it is important to
remember that Facebook is not the only social
media platform. Many social media and online
advertising services have similar ad targeting
features. Just investigating Facebook settings
during your marketing review may not be
enough. Does your bank use Twitter to adver-
tise? How about Snapchat, Instagram, You Tube,
Google Ads? The list goes on.
Also, it’s important to remember that along
with housing and lending discrimination, employment discrimination is a key concern as
well. Many banks utilize LinkedIn and similar
platforms to promote job opportunities in local
communities. It bears investigation by your legal
or compliance team to ensure that posts on these
platforms are shared without any prohibited or
discriminatory factors included in their targeting.
As with any emerging compliance issue,
it may take a while before official guidance is
provided on how best to manage social discrimination risk in advertising and other areas.
However, that does not shield your bank from
ensuring that you’ve established sufficient and
comprehensive practices and procedures to
identify risks related to social media advertising.
Take a few minutes to discuss with your marketing department and see if they are using ad
targeting features and then institute controls to
keep your bank from ending up with a fair lending, fair housing or employment discrimination
violation. For more information, see the article
on Digital Compliant Marketing by Renee W.
Huffaker, CPA, CRCM on page 18 of this issue
of ABA Bank Compliance magazine. ■
ABOUT THE AUTHOR
BRIAN WATERS, CRCM, is the President and
Co-Founder of findCRA, which develops and
deploys groundbreaking tools to streamline
research and empower partnerships between
banks and nonprofits nationally to optimize CRA
outcomes. He has nearly 20 years experience in
banking compliance and community development
and is a resident of Louisville, KY. Contact him at
Other settings allowed
advertisers to prevent women
and people with children from
seeing ads or to target ads only
to zip codes that were not