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The requirements related to advertising/promoting non-deposit investment related products are quite strict. At a minimum any advertisement or disclosure must include the three statements:
* are not insured by the FDIC;
* are not deposits or other obligations of the institution and are not guaranteed by the institution; and,
* are subject to investment risks, including possible loss of the principal invested.In addition, the advertisement or promotional materials must not suggest or convey any inaccurate or misleading impression about the nature of the product or its lack of FDIC insurance.
My biggest concern about a teller handing out a brochure, even with proper disclosures as mentioned above is the fact that the teller likely has an “FDIC Insured” sign at his/her teller window and there are specific requirements that prohibit that in the Interagency Statement on Retail Sales of Nondeposit Investment Products, specifically:
“To minimize customer confusion with deposit products, sales or recommendations of non-deposit investment products on the premises of a depository institution should be conducted in a physical location distinct from the area where retail deposits are taken. Signs or other means should be used to distinguish the investment sales area from the retail deposit-taking area of the institution. However, in the limited situation where physical considerations prevent sales of non-deposit products from being conducted in a distinct area, the institution has a heightened responsibility to ensure appropriate measures are in place to minimize customer confusion.”While the brochure has proper disclosure, it may be considered by some examiners as a recommendation of a nondeposit investment product in an area where retail deposits are accepted. I think the same argument would hold true if the televisions in the branch are behind or near the teller window or deposit taking area of the branch where FDIC insured signs were housed.
While these guidelines could be interpreted differently, the safest course of action is to ensure these two areas of the financial institution remain separate.
