FDIC- and NCUA-Required References to Deposit Insurance

The FDIC and the NCUA both require that insured depository institutions (banks and savings associations) and insured credit unions, respectively, include in all their advertisements what is known as the “official advertising statement.” The FDIC regulation (12 CFR 328) applies to all insured banks, whether state or national. The NCUA regulation (12 CFR 740.5) applies to federally insured credit unions, whether federally or state chartered.

The official advertising statement required for banks/savings associations and credit unions is basically a reference to the fact that the institution is federally insured. However, each regulation requires a slightly different statement.

The FDIC official advertising statement is: “Member of the Federal Deposit Insurance Corporation.” [12 CFR 328.3(b)] Other permitted versions of this statement are:
  • “Member of FDIC”
  • “Member FDIC”

[12 CFR 328.3(b)(1)]

You can also use the FDIC “symbol” as the official advertising statement. The “symbol” is the portion of the official FDIC sign, which includes the letters and the Corporation’s seal. [12 CFR 328.3(b)(1)]

The NCUA official advertising statement is: “This credit union is federally insured by the National Credit Union Administration.” Alternatively, a credit union can use the words “Federally insured by NCUA” along with a reproduction of the official sign of the NCUA. [12 CFR 740.5(b)]

Both the FDIC regulation and the NCUA regulation authorize the official advertising statement to be written in a language other than English, so long as the translation has prior written approval from the agency. [12 CFR 328.3(f) and 12 CFR 740.5(d)]

Both the FDIC and the NCUA have a lengthy list of situations in which the official statement is not required. The list follows:
  • Statements of condition and reports of condition which are required to be published by State or Federal law;
  • Supplies such as stationery (except when used for circular letters), envelopes, deposit slips, checks, drafts, signature cards, deposit passbooks, certificates of deposit, etc.;
  • Signs or plates in the institution offices or attached to the building or buildings in which such offices are located;
  • Listings in directories;
  • Advertisements not setting forth the name of the institution;
  • Entries in a directory, provided the name of the institution is listed on any page in the directory with a symbol or other descriptive matter indicating it is insured; • Joint or group advertisements of institution services where the names of insured institutions and noninsured institutions are listed and form a part of such advertisements;
  • Advertisements by radio or television, other than display advertisements, which do not exceed thirty (30) seconds in time;
  • Advertisements which are of the type or character that make it impractical to include the official advertising statement, including, but not limited to, promotional items such as calendars, matchbooks, pens, pencils, and key chains; and
  • Advertisements which contain a statement to the effect that the institution is a member of the Federal Deposit Insurance Corporation, or that the depository institution is insured by the Federal Deposit Insurance Corporation, or that its deposits or depositors are insured by the Federal Deposit Insurance Corporation to at least $100,000 for each depositor, or that the credit union is insured by the NCUA or that its accounts and shares or members are insured by the NCUA to the maximum insurance amount for each member or shareholder. $100,000 is not a typo; this part of the rule has not been revised to reflect the increased level of coverage. Presumably the FDIC would permit the advertisement to state that coverage is at least $250,000.

[12 CFR 328.3(d) and 12 CFR 740.5(c)]

The FDIC (but not the NCUA) also addresses the issue of use of the FDIC statement in advertisements that relate to non-deposit products. “Non-deposit product” refers to products such as insurance, annuities, mutual funds, and securities. A “hybrid product” is one that has both deposit features and non-deposit features. A sweep account is an example of a hybrid product. [12 CFR 328.3(e)(1)(i) and (ii)]

The FDIC has three rules that relate to advertisements including information about non-deposit products or hybrid products.

The first rule is that you cannot include the FDIC advertising statement in an advertisement that relates solely to non-deposit products. [12 CFR 328.3(e)(2)]

The second rule is that you cannot include the FDIC advertising statement in an advertisement that relates solely to hybrid products. [12 CFR 328.3(e)(3)]

The third rule is that you are allowed to include the FDIC advertising statement in an advertisement containing information about both deposit products, on the one hand, and non-deposit products or hybrid products, on the other hand (a mixed advertisement). But you must clearly segregate the FDIC advertising statement from the information relating to non-deposit products. [12 CFR 328.3(e)(4)]

Finally, in an Advisory Opinion, the FDIC provided guidance on whether and when a bank must include the advertising statement or logo in Internet web site pages. In Advisory Opinion 00-10, November 3, 2000, the FDIC cited the basic rule that if a web page is an “advertisement,” then it must include the advertising statement or logo unless one of the exceptions above applies. The FDIC noted that the regulation does not define “advertisement” and that, therefore, a broad non-legal definition is appropriate. This means, says the Opinion, that
…in virtually all cases a bank’s home page is a notice designed to attract public attention or patronage and thus is an advertisement for purposes of part 328. Moreover, any web page that meets this definition is an advertisement for purposes of part 328. This would generally include most pages within a bank’s web site. Indeed, any page that touts either the bank itself or one of its products or services is in our view an advertisement. Conversely, we would not consider a web page that allows customers to conduct transactions or review statements to be an advertisement, so long as the page does not contain other information touting the bank or its products or services.
The Opinion goes on to list a number of exceptions from those listed above that are relevant to web page advertising and noted that the statement is not required:
For example, a web page providing information on deposit products is an advertisement not subject to one of the foregoing exceptions. The web page, therefore, must include the official advertising statement. Conversely, a web page providing information on mortgage loans is an advertisement that is subject to one of the foregoing exceptions. The web page, therefore, need not include the official advertising statement.