Although the FFIEC and FTC recognize the need to update advertising
and marketing efforts in light of technological advances, there have been no
corresponding changes to the advertising rules under the consumer protection laws (e.g., Truth-in-Savings or
Truth-in-Lending).
In addition, the regulatory agencies
have issued various guidances on third-party risk management (e.g., FDIC’s FIL-
44-2008 “Third-Party Risk: Guidance for
Managing Third-Party Risk”; OCC Bulletin 2013-29 “Third-Party Relationships:
Risk Management Principles”).
Considerations
In light of recent litigation, financial in-
stitutions should re-evaluate, assess and
incorporate any appropriate changes
to its social media marketing and data
sourcing. The regulatory agencies will
likely have increased concerns over the
ability to discriminate using certain
social media platforms, and will likely
have higher scrutiny toward organiza-
tions utilizing such platforms for mar-
keting purposes.
Becoming familiar with the guidelines and recommendations, as well
as a review of advertising complaints
against social media platforms, can help
institutions with identifying and addressing potential risks, including fair
lending risk.
Additional considerations for social
media marketing include:
■ ■ ■ If “target” marketing is being considered, has a risk assessment been conducted during the decision-making
process? If so, was regulatory compliance involved in the process?
■ ■ ■ Were “target” factors based on the
recommendation of a third-party
vendor? If so, do they represent acceptable risk for the institution?
■ ■ ■ Do third party risk assessments incorporate data sourcing, targeting or
other extrapolations information and
controls to mitigate potential risk for
fair lending, UD(A)AP, or other regulatory violations?
■ ■ ■ Has the institution determined a way
to monitor the results of the marketing effort for potential overt or
disparate impact discrimination (for
both applications received and loans
originated)?
■ ■ ■ Does monitoring process include all
loan marketing and not limited to a
specific product line (e.g., consumer
mortgage loans)?
■ ■ ■ Is the institution marketing a “special
purpose credit program” as defined in
Regulation B ( 12 CFR 1002.8)? Is the
program well-documented? Although
not required, was the program discussed with the institution’s regulatory agency prior to implementation?
In developing and implementing a
marketing program, ensure that your
process, discussions, decisions and
documentary support are retained in a
manner that can be easily explained to
your regulators. ■
ABOUT THE AUTHOR
MARK BURNSIDE, CRCM,
Senior Consultant at ProBank
Austin, has more than 26
years of experience in the
financial services industry
with a focus on regulatory compliance. He
has spent over 16 years as a compliance
consultant, assisting financial institutions
with maintaining and strengthening
compliance programs. His expertise
encompasses all aspects of regulatory
compliance, including Bank Secrecy Act/
Anti-Money Laundering, Fair Lending,
Lending and Deposit requirements. As a
compliance subject matter expert, Mark
provides education and training on
regulatory compliance topics, while
providing tools and valuable insight into
areas which could be considered high risk.
Mark has worked on projects for both
community and national institutions as
well as facilitating training and oversight
processes from risk assessments to
compliance management systems. He is
a graduate of Indiana University with a
Bachelor’s degree in Economics. Reach him
at mburnsided@probank.com.
