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1 1 Social Media It’s not as easy as you thought! Patsy Parkin Senior Banking Compliance Advisor Butler Snow LLP
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Social MediaIt’s not as easy as you thought!
Patsy ParkinSenior Banking Compliance Advisor
Butler Snow LLP
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So What Are You Using These Sites For?
Facebook Twitter LinkedIn
Pinterest Blogging On and On!
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• Promote products and services to generate new business?
• “Modern” communication with customers?• Promote community activities?
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• Have you thought about the fact that you may be marketing/advertising products?
• What do you do when negative comments about your mortgage area are posted?
• Do you have someone designated to monitor social networking sites?
• What if you receive a complaint or dispute on a social media site?• Do you have a social media policy?
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Social Media defined• Interactive online communication in which users can
share content through text, images and/or video• Does not include messages sent through text or email• Micro-blogging sites, blogs, customer review sites,
photo and video sites, professional networking sites, etc.
FFIEC Guidance
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You need a risk management program to identify measure and control risks associated with social media. Should be based on the banks use of social media to attract and acquire new customers.
FFIEC Guidance
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Risk Areas • Compliance and legal risk• Operational risko Data breach, failed procedures, people or systems
• Reputation risko Negative public opiniono Responses to complaintso Privacyo Employee use of social media site
FFIEC Guidance (cont.)
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Risk Management Program• Board and senior management involvement on developing the
bank’s goals for social media and creating controls and ongoing assessments of the bank’s risk
• Policies and procedures for social media use• Process for managing third parties
o Bank responsibility• Employee training• Monitoring• Ongoing audit and compliance procedures• Reporting to Board and Senior Management
FFIEC Guidance (cont.)
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Advertising and Marketing
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Examples:• If you include any specific credit term in your “post,” you will have to include
other requirements. • Advertised loan rates must be stated as APR’s.• If you also state a “contract rate”, then the APR must be shown in at least
the same type size.• If the rate can increase after consummation, that fact must be disclosed.• If the number of payments or period of payments is stated, then an example
of the payment schedule must be included, including any balloon payment.• In a variable rate transaction, if bank discloses an index and margin, they
must be a reasonably current index and margin.• Equal Housing Lender verbiage or “house” symbol• Privacy – Others will know looking for a new house; maybe moving
Advertising and Marketing (cont.)
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Examples (cont.):• Advertised deposit rates must disclose the APY.• Member FDIC symbol• If APY stated, then may also have to include (as applicable):
i. Variable rate – statement that the rate may change after account is openedii. Time APY is offered.iii. Minimum balance to obtain advertised APY.iv. Minimum opening depositv. Statement that fees could reduce earnings on the account.vi. Term of account (time deposit)vii. Early withdrawal penaltiesviii. Required interest payouts
(Note: Examples. Other requirements may apply.)
Advertising and Marketing (cont.)
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An “acquaintance” saw on LinkedIn where you originate mortgage loans and sent you the following message:
“I met you the other day and see you are a mortgage loan originator. I need a loan to refinance my house to pay some bills. I was without a job for a little while and my credit isn’t very good – in fact I filed for bankruptcy 6 months ago and I just need to get my credit back in shape.”
Advertising and Marketing (cont.)
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• Privacy – even though the “acquaintance” sent you the message
• If you say much of anything other than, “come by and see me,” you run the risk of:o Did anything you say discourage the person (Regulation B, Fair
Lending, Fair Housing)o By knowing what was told, you MAY have enough information to
make a credit decision and would have to decline the “request.” (Regulation B)
Advertising and Marketing (cont.)
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Posting:
“Lower your payment – save money. A drop of as little as ½% could save you thousands of dollars!”
Or
“A variety of loan terms, no point options and lower closing cost loans have greatly decreased the rate to make refinancing profitable!”
Advertising and Marketing (cont.)
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It may give the customer false hope when the bottom line is until the mortgage area performs an analysis, you do not know.
Risk of UDAAP!
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What if a complaint is received?• There are time limits to respond.• Records to maintain on complaints.• May be required to place into the CRA Public file.
Requirement that all written comments received from the public relating to the bank’s performance in helping meet community needs, and the bank’s response must be placed in the CRA public file.
• Not to mention possible negative impact.
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Your own website - - - - a whole new ballgame! (Actual occurrence )• Website clearly had the “branding” of where they worked, like it was that bank’s
website.• This person had their own privacy disclosure.• Offered special rates and “triggering” terms without disclosures (this would have
been a loan where they worked.)• Asked about taking the bank’s name off of their website and still using it. • Had a weekly radio show where they talked about special rates.• No Equal Housing Lender disclosure on the site.• Would post interest rates daily and include term, maximum loan amount, point,
minimum down payment. • Posed UDAAP and potential liability on the bank.
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Facebook Postings• Posting recent closed loans with a picture of the
borrower, realtor, mortgage lendero Possible privacy issueso If post certain comments, advertisingo If posting references of bank financing the home,
EHL symbol/statement• Posting where you work
o Issue may occur if someone posts questions or comments re: mortgage lending process, complaint, personal financial information
Risk of UDAAP!
POST NOW
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• The exemption for advertisements made through electronic media does not include ads posted on the internet.o No advertisement may be misleading/inaccurate regardless of media
type• “free” or “no cost” or “fees waived”
o Don’t use if any fee may be charged• Fail to meet minimum balance requirements• Transaction fees• Monthly service fees• Fees for withdrawals or deposits
• “profit”o Do not use when referring to interest earned
TISA/Reg DD Requirements
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What’s Missing?
Come check out BSB Bank’s Super Rate CD!
Butler Snow Bank
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o Trigger terms/additional disclosures• APY (somewhere in “ad” it has to state “annual
percentage yield”)• CDs• Bonuseso Start with a . . . $200 bonus! Open a Checking
account with deposits of $500, then maintain a $500 average balance for 60 days.• Offer expires November 30, 2018. Click here for
all terms and conditions
TISA/Reg DD Requirements (cont.)
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o Clearly refer consumer to additional required information (link to disclosures)• Requirement applies regardless of device being used
to access site• Optimize for mobile device
TISA/Reg DD Requirements (cont.)
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• Ads for FDIC-insured products• Ads for non-specific bank products if bank name appears• DO NOT include for ads for non-deposit products or hybrid
productso Insuranceo Investmentso These products require other disclosures
• Member FDIC statement or logo
FDIC Membership Statement or Logo
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• Details on social media used and controls that are in place
• Include all applicable areas of your business in the development and review of the policy – IT, compliance, security, legal, human resources, marketing, management
• Potential risks• Internal training• If a third party monitoring service is used, perform the due
diligence and include their procedures and interaction with your business
• Communication to senior management and the board
Social Media Policy
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Deposit and Lending Products:• Truth-in-Savings
o Disclosure requirement: fees, APY, interest rate, other termso Advertisingo Electronic advertisingo Triggering terms, “bonus”, “APY”
• Member FDIC• Electronic funds transfer/regulation E
o Required disclosureso Error resolution
Compliance and Legal Risks
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Fair Lending Laws:• Equal Credit Opportunity Act/Regulation B
o Prohibits discouraging applicants on a prohibited basiso Time frame for notification of action takeno Prescreened applicationso AAN for denied credito Monitoring information including age and marital status
• Fair Housing Acto Monitoring informationo Advertising based on limitation or preference of monitoring
informationo Equal housing lender
Compliance and Legal Risks
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Truth-in-Lending/Regulations Z• Requirements if disclose specific credit terms (APR, loan
features)• Electronic ads – may use a table on a different page from
main ad if refers to the page or location• Electronic applications – disclosures within required time
frames
Compliance and Legal Risks
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RESPA• Prohibits activities such as fee splitting, accepting a fee,
kickback, or thing of value in exchange for referrals of settlement service business.
UDAAP• Prohibits unfair, deceptive, or abusive acts or practices in
advertising or media usage.
Compliance and Legal Risks
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Fair Debt Collection Practices Act• Cannot publicly disclose that a consumer owes a debt• Inappropriately contacting consumers or their families
and friends• Using social media to disclose existence of a debt or to
harass or embarrass consumers about a debt
Compliance and Legal Risks
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Bank Secrecy Act• CIP• Virtual (gamers cash out – laundering money; internet
games, digital currency)
Compliance and Legal Risks
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Community Reinvestment Act• Public comments and bank responses
Privacy• Collecting or accessing information from consumers
Fair Credit Reporting Act• Restrictions and requirements re: making solicitations using
eligibility info, responding to direct disputes, collecting medical info in connection with loan eligibility
Compliance and Legal Risks
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CAN-SPAM Act and Telephone Consumer Protection Act• Sending unsolicited communication to consumers
Children’s Online Privacy Protection Act• Directing info on social media to children 13 and under
Compliance and Legal Risks
