40 SEPTEMBER / OCTOBER 2019 FEATURE Craig Lippmann Director of Strategic Alliances and Partnerships CSI craig.lippmann@csiweb.com CSI Secure Connect and CSI WatchDOG Social Compliance are Preferred Service Providers of the Indiana Bankers Association. Social media channels provide financial institutions with a unique opportunity to engage in helpful two-way communication with customers, prospects, employees and critics. Communicating with customers through social media, however, carries its own regulatory and compliance concerns, especially for banks. Is social media considered advertising? Which regulations dictate what institutions can and cannot say? The answers are not cut and dried, but understanding the compliance framework around social media is a critical first-step toward lowering your organization’s risk. Key Regulations First and foremost, your social media content must meet federal regulations. Although marketing laws do not directly address social media requirements for financial institutions, many existing laws and regulations specific to the financial sector treat the internet, including social media sites, as a marketing channel. This means that all requirements that would apply to your organization’s website also apply to your social media accounts. So how do you go about leveraging social media while ensuring proper compliance? Here are a few key regulations to keep in mind: • Reg B. This regulation prohibits discrimination against certain credit applicants. Images and statements should be carefully reviewed to avoid discouraging creditworthy applicants or implying your institution primarily serves a certain class of people. Given the dynamic and inherent nature of social media, it’s critical to implement ongoing, Social Media Compliance for Banks A beginner’s guide frequent monitoring for activity that could violate Reg B. Training programs should ensure all employees know how to properly respond to certain inquiries regarding loans. • Reg Z (Truth-in-Lending Act). The Reg Z compliance requirement applies to all commercial messages that promote credit transactions. Further caution and adequate training are necessary when advertising interest rates or specific credit terms through social media, since employees’ interaction with consumers about credit products also can trigger specific disclosures. If a communication of this type is sent, you must keep a record of the message for two years. • Reg DD (Truth-in-Savings Act). This rule applies to any commercial message, in any medium, that promotes deposit accounts. The rules are intended to ensure advertisements are not misleading, inaccurate or misrepresentative of the institution’s deposit contract. Reg DD also sets forth rules for responding to certain inquiries about deposit accounts, specifically inquiries about interest rates. Advertisements through social media that include deposit rates trigger the same disclosures as those applicable to your website and print media. • Gramm-Leach-Bliley Act. This regulation requires security of customer information. You must ensure that confidential account data is not exposed when attempting to provide customer service or assist with products. Also, insurance disclosures should appear if the bank mentions insurance products in its posts. It would be wise to conduct a thorough review of these critical regulations to determine if your social media efforts measure up.
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