ABA Bank Compliance - September/October 2013

in

Banks devise marketing campaigns, solicitations, disclosures, and fees when new products are created. To tame the UDAAP beast during these processes, they must test to ensure the bank has established clear product features, explained what customers will receive, provided customer assistance information to resolve potential problems, and vetted product features to ensure each product can be delivered as promised. Most UDAAP cases revolve around these product initiation issues, so it is crucial that your testing program target these focal points. We’ll start our excursion with a stroll down memory lane, the more familiar terrain of marketing and disclosures, and then turn into the scary forest of fees.

Marketing

General Testing

Assuming your bank has a documented marketing review process,
determine whether all marketing pieces went through the official
review. Pull a sample of final ads to verify that your review process
is working as intended. And, be sure to include more than just
paper ads. Your website is a jungle unto itself. Also, be sure you are
reviewing website pages in final form, since format, placement of
information, and proximity of disclosures is very important. Make
sure to include advertising created by branches and third-party
marketing firms. Materials from these sources are more likely to
slip through the cracks. In addition, if you market or advertise in
languages other than English, verify that each ad in the campaign
has the same written or verbal script.

Also, review any marketing checklists, solicitations, pre-screened offers, training materials, and a random sample of advertisements. In addition to the baseline Regulation DD and Regulation Z trigger terms, these items should include UDAAP considerations such as: