Of primary concern is the ability of
financial institutions to “target” or “
exclude” certain markets or individuals in
relation to social media advertising.
Litigation
On March 27, 2018, the National Fair
Housing Alliance (NFHA) and three
of its member civil rights groups filed
suit against Facebook alleging that its
advertising platform enabled landlords and real estate brokers to exclude
families with children, women, and
other protected classes of people from
receiving housing advertisements in
violation of federal and local housing
laws that bar discrimination in housing
advertising. ( nationalfairhousing.org/
facebook-complaint/)
Allegations noted in NFHA’s complaint included the ability to “target” or
“exclude” based on prohibited factors
under the Fair Housing Act and Equal
Credit Opportunity Act (e.g., race, sex,
familial status, etc.)
The complaint alleged:
■ ■ ■ Facebook has designed its advertising
platform so that advertisers can “
target” their audience using two general
actions “including” specific types of
people and “excluding” specific types
of people.
■ ■ ■ Facebook develops and provides its
advertisers with a pre-populated list
of hundreds of demographics, be-
haviors, and interests (the “Facebook
Pre-Populated List”). Advertisers then
scroll through this Facebook-created
content and select which characteris-
tics they would like to “include” and
which they would like “exclude” from
the ad’s audience.
Facebook’s attempts to dismiss the
NFHA claims failed. Instead, U.S. Attorney for the Southern District of
New York, noted that NFHA’s complaint sufficiently alleged that when it
came to housing advertisements, the
categorizing of Facebook users based
on protected characteristics, and the
mechanism Facebook offered advertisers to target those segments of the
potential audience, violated the Fair
Housing Act.
On August 14, 2018, the U.S. Department of Housing and Urban Development (HUD) filed an administrative
complaint claiming that Facebook “…
unlawfully discriminates by enabling advertisers to restrict which Facebook users receive housing-related ads based on
race, color, religion, sex, familial status,
national origin and disability. Facebook
mines extensive user data and classifies
its users based on protected characteristics.” ( www.hud.gov/sites/dfiles/PIH/
documents/HUD_01-18-0323_Com
plaint.pdf)
On the same day, the Department of
Justice also pursued similar issues with
Facebook.
On March 19, 2019, Facebook (with-
out admitting any wrongdoing) reached
a settlement with the civil rights groups
to restrict targeted marketing for hous-
ing, employment and credit products,
Despite the settlements, just days later
on March 28th, HUD filed suit against
Facebook. Through its charge, HUD
seeks to address unresolved fair housing
issues regarding Facebook’s advertising
practices and to obtain appropriate
relief for the harm Facebook caused
and continues to cause. ( www.hud.gov/
sites/dfiles/Main/documents/HUD_v_
Facebook.pdf)
Regulatory Guidance
In December 2013, the Federal
Financial Institutions Examination
Council (FFIEC) released Social
Media: Consumer Compliance Risk
Management Guidance. The Guidance
provides insight to the applicability of
consumer protection and compliance
laws, regulations, and policies to
activities conducted by financial
institutions via social media. It is
intended to help financial institutions
understand potential consumer
compliance and legal risks, as well as
related risks such as reputation and
operational risks, associated with the use
of social media, along with expectations
for managing those risks. (https://www.
ffiec.gov/press/pr121113.htm)
Earlier in 2013, the Federal Trade
Commission (FTC) updated its Dot
Com Disclosures guidelines to address
the online and mobile advertising environment. It explains how to make disclosures clear and conspicuous to avoid
deception, taking into account the expanding use of smartphones with small
screens and the rise of social media marketing. It also contains mock ads that
illustrate the updated principles. (www.
ftc.gov/sites/default/files/attachments/
press-releases/ftc-staff-revises-online-
advertising-disclosure-guidelines/13031
2dotcomdisclosures.pdf)
Fair Lending and
Social Media Marketing
AS PART OF A FAIR LENDING REVIEW, the focus on marketing initiatives has expanded with the use of digital media. Advertisers on social media have been able to discriminate by targeting users based on their age, race, gender, and other characteristics. Recent litigation
has prompted regulators and financial institutions to re-evaluate and address
potential fair lending risks when leveraging social media to market financial
products and services.
