Proposed Rule Regarding False Advertising, Misrepresentations About Insured Status, and Misuse of the FDIC’s Name or Logo

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1 See 18 U.S.C. 709 (‘‘Whoever, except as

expressly authorized by Federal law, uses the words

‘Federal Deposit’, Federal Deposit Insurance’, or

‘Federal Deposit Insurance Corporation’ or a

combination of any three of these words, as the

name or a part thereof under which he or it does

business, or advertises or otherwise represents

falsely by any device whatsoever that his or its

deposit liabilities, obligations, certificates, or shares

are insured or guaranteed by the Federal Deposit

Insurance Corporation, or by the United States or

by any instrumentality thereof, or whoever

advertises that his or its deposits, shares, or

accounts are federally insured, or falsely advertises

or otherwise represents by any device whatsoever

the extent to which or the manner in which the

deposit liabilities of an insured bank or banks are

insured by the Federal Deposit Insurance

Corporation . . . Shall be punished . . . by a fine

under this title or imprisonment for not more than

one year . . .’’).

removing ‘‘[BANKS]’’ and adding in its

place ‘‘FDIC-supervised institutions’’,

and removing ‘‘[BANK’s]’’ and adding

in its place ‘‘FDIC-supervised

institution’s’’, whenever it appears.

■b. Removing ‘‘[AGENCY]’’ and adding

in its place ‘‘FDIC’’ whenever it appears.

Blake J. Paulson,

Acting Comptroller of the Currency.

By order of the Board of Governors of the

Federal Reserve System.

Ann E. Misback,

Secretary of the Board.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, on April 21,

2021.

James P. Sheesley,

Assistant Executive Secretary.

[FR Doc. 2021–09047 Filed 5–7–21; 8:45 am]

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 328

RIN 3064–AF71

False Advertising, Misrepresentation

of Insured Status, and Misuse of the

FDIC’s Name or Logo

AGENCY: Federal Deposit Insurance

Corporation

ed at Washington, DC, on April 21,

2021.

James P. Sheesley,

Assistant Executive Secretary.

[FR Doc. 2021–09047 Filed 5–7–21; 8:45 am]

BILLING CODE 4810–33–P; 6210–01–P; 6714–01–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 328

RIN 3064–AF71

False Advertising, Misrepresentation

of Insured Status, and Misuse of the

FDIC’s Name or Logo

AGENCY: Federal Deposit Insurance

Corporation.

ACTION: Notice of proposed rulemaking

and request for information.

SUMMARY: The Federal Deposit

Insurance Corporation is seeking

comment on a proposed rule to

implement section 18(a)(4) of the

Federal Deposit Insurance Act. Section

18(a)(4) of the Federal Deposit Insurance

Act prohibits any person from making

false or misleading representations

about deposit insurance or from using

the Federal Deposit Insurance

Corporation’s name or logo in a manner

that would imply that an uninsured

financial product is insured or

guaranteed by the Federal Deposit

Insurance Corporation. The proposed

rule would describe: The process by

which the Federal Deposit Insurance

Corporation will identify and

investigate conduct that may violate

section 18(a)(4) of the Federal Deposit

Insurance Act; the standards under

which such conduct will be evaluated;

and the procedures which the Federal

Deposit Insurance Corporation will

follow when formally and informally

enforcing the provisions of section

18(a)(4) of the Federal Deposit Insurance

Corporation Act.

DATES: Comments are due on or before

July 9, 2021. Comments on the

Paperwork Reduction Act burden

estimates are due on or before July 9,

2021.

ADDRESSES: You may submit comments,

identified by RIN 3064–AF71, by any of

the following methods:

• FDIC website: https://www.fdic.gov/

regulations/laws/federal/. Follow

instructions for submitting comments

on the agency website.

• FDIC Email: Comments@fdic.gov.

Include RIN 3064–AF71 on the subject

line of the message.

• Mail: James P

urden

estimates are due on or before July 9,

2021.

ADDRESSES: You may submit comments,

identified by RIN 3064–AF71, by any of

the following methods:

• FDIC website: https://www.fdic.gov/

regulations/laws/federal/. Follow

instructions for submitting comments

on the agency website.

• FDIC Email: Comments@fdic.gov.

Include RIN 3064–AF71 on the subject

line of the message.

• Mail: James P. Sheesley, Assistant

Executive Secretary, Legal-ESS,

Attention: Comments—RIN 3064–AF71,

Federal Deposit Insurance Corporation,

550 17th Street NW, Washington, DC

20429.

• Hand Delivery/Courier: Comments

may be hand-delivered to the guard

station at the rear of the 550 17th Street

NW building (located on F Street) on

business days between 7 a.m. and 5 p.m.

Please include your name, affiliation,

address, email address, and telephone

number(s) in your comment. All

statements received, including

attachments and other supporting

materials, are part of the public record

and are subject to public disclosure.

You should submit only information

that you wish to make publicly

available.

Please note: All comments received will be

posted generally without change to https://

www.fdic.gov/regulations/laws/federal/,

including any personal information

provided.

FOR FURTHER INFORMATION CONTACT:

Richard M. Schwartz, Counsel, Legal

Division, (202) 898–7424; Michael P.

Farrell, Counsel, Legal Division, (202)

898–3853, Federal Deposit Insurance

Corporation, 550 17th Street NW,

Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Policy Objectives

Section 18(a)(4) of the Federal Deposit

Insurance Act, 12 U.S.C. 1828(a)(4),

(Section 18(a)(4)) prohibits any person

from misusing the name or logo of the

Federal Deposit Insurance Corporation

(FDIC) or from engaging in false

advertising or making knowing

misrepresentations about deposit

insurance

550 17th Street NW,

Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. Policy Objectives

Section 18(a)(4) of the Federal Deposit

Insurance Act, 12 U.S.C. 1828(a)(4),

(Section 18(a)(4)) prohibits any person

from misusing the name or logo of the

Federal Deposit Insurance Corporation

(FDIC) or from engaging in false

advertising or making knowing

misrepresentations about deposit

insurance. The FDIC has observed an

increasing number of instances where

financial services providers or other

entities or individuals have misused the

FDIC’s name or logo or have made false

or misleading representations that

would suggest to the public that these

providers’ products are FDIC-insured.

To provide transparency into how the

FDIC will address these and similar

concerns, the FDIC is proposing to

adopt regulations to further clarify its

procedures for identifying,

investigating, and where necessary

taking formal and informal action to

address potential violations of Section

18(a)(4). The regulations would also

establish a point-of-contact for receiving

complaints about potentially false or

misleading representations regarding

deposit insurance and would direct

depositors and prospective depositors to

where they could obtain information or

verification about deposit insurance

claims. Although the FDIC is not

required to promulgate regulations to

implement section 18(a)(4), the FDIC

nonetheless believes that the proposed

rule, if adopted, would establish a more

transparent process that will benefit all

parties and would promote stability and

confidence in FDIC deposit insurance

and the nation’s financial system.

II. Background

The FDIC has steadfastly and

proactively sought to protect depositors

and prospective depositors by limiting

use of the FDIC’s name, seal, and logo

to insured depository institutions (IDIs)

and preventing false and misleading

representations about the manner and

extent of FDIC deposit insurance

(deposit insurance)

FDIC deposit insurance

and the nation’s financial system.

II. Background

The FDIC has steadfastly and

proactively sought to protect depositors

and prospective depositors by limiting

use of the FDIC’s name, seal, and logo

to insured depository institutions (IDIs)

and preventing false and misleading

representations about the manner and

extent of FDIC deposit insurance

(deposit insurance). Under Federal law,

it is a criminal offense to misuse the

FDIC name or make false

representations regarding deposit

insurance.1 Moreover, the FDIC has

independent authority to investigate

and take administrative enforcement

actions, including the power to issue

cease and desist orders and impose civil

money penalties, against any person

who: (1) Falsely represents or implies

that any deposit liability, obligation,

certificate, or share is insured by the

FDIC; or (2) otherwise knowingly

misrepresents: (a) That any deposit

liability, obligation, certificate, or share

is insured, or (b) the extent or manner

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2 See 12 U.S.C. 1828(a)(4)(C)–(D). With regard to

an insured depository institution under the

supervision of another Federal banking agency, the

FDIC shall first write to that agency to take

enforcement action under section 18(a)(4) against

any entity for which the agency is the appropriate

Federal banking agency or any institution-affiliated

party of such entity; if that agency takes no action

within 30 days, the FDIC may take action.

3 85 FR 10997 (Feb. 26, 2020).

4 Id, at 10999–11000.

5 85 FR 14678 (Mar. 13, 2020).

6 86 FR 18528 (Apr. 9, 2021).

7 See generally, FTC Policy Statement on

Deception, October 14, 1983.

8 See,e.g., FTC v. Stefanchik, 559 F.3d 924 (9th

Cir. 2009)

ederal banking agency or any institution-affiliated

party of such entity; if that agency takes no action

within 30 days, the FDIC may take action.

3 85 FR 10997 (Feb. 26, 2020).

4 Id, at 10999–11000.

5 85 FR 14678 (Mar. 13, 2020).

6 86 FR 18528 (Apr. 9, 2021).

7 See generally, FTC Policy Statement on

Deception, October 14, 1983.

8 See,e.g., FTC v. Stefanchik, 559 F.3d 924 (9th

Cir. 2009).

9 See, FIL–57–2002 Unfair or Deceptive Acts—

Applicability of the Federal Trade Commission Act

(May 30, 2002) and FIL–26–2004, Unfair or

Deceptive Acts or Practices under Section 5 of the

Federal Trade Commission Act (March 11, 2004).

in which any deposit liability,

obligation, certificate, or share is

insured.2

Although the FDIC has broad

statutory authority in this area, the FDIC

has never issued specific regulations

regarding false representations related to

FDIC insurance or the misuse of the

FDIC’s name or logo.

On February 26, 2020, the FDIC

published in the Federal Register a

Request for Information (RFI) related to

potential modernization of its signage

and advertising rules set out in part 328

of the FDIC regulations.3 This RFI

included the questions tied to the

deposit insurance misrepresentation

issues discussed in this Notice of

Proposed Rulemaking.4 On March 13,

2020, the FDIC published an extension

of the comment period in the Federal

Register.5 However, on April 16, 2020,

in light of COVID–19, the FDIC

announced that it was temporarily

postponing its efforts to modify the

rules under part 328 of the FDIC

regulations.

In light of the increasing number of

instances where financial services

providers or other entities or

individuals have misused the FDIC’s

name or logo, the FDIC has elected to

address false or misleading

representation and misuse issues

through this Notice of Proposed

Rulemaking. Because the FDIC is

committed to obtaining input on these

issues from the industry and the public,

we have included relevant questions in

this document

es where financial services

providers or other entities or

individuals have misused the FDIC’s

name or logo, the FDIC has elected to

address false or misleading

representation and misuse issues

through this Notice of Proposed

Rulemaking. Because the FDIC is

committed to obtaining input on these

issues from the industry and the public,

we have included relevant questions in

this document.

Separately, on April 9, 2021, the FDIC

re-issued its RFI regarding the FDIC

Sign and Official Advertising

Requirements.6 The 2021 RFI focuses on

soliciting information on the

modernization of the FDIC’s advertising

requirements applicable to IDIs, and

related topics. While questions related

to misrepresentation and misuse have

been removed from that document,

there remains a degree of overlap

between the RFI and the proposed rule

and responses to the RFI may provide

information that is relevant to

consideration of the proposed rule. For

example, the RFI asks about how to deal

with parties that may be fraudulently

impersonating insured depository

institutions, which necessarily overlaps

with the proposed rule. Therefore, the

FDIC will consider relevant comments

submitted in response to the RFI,

together with comments submitted in

response to the proposed rule, in

adopting the final rule.

III. Summary of Proposed Regulation

The proposed regulation establishes a

new subpart B to part 328, entitled

‘‘False Advertising, Misrepresentation of

Insured Status, and Misuse of the FDIC’s

Name or Logo.’’ The proposed subpart

sets forth the process by which the FDIC

will identify and investigate conduct

that may violate Section 18(a)(4), the

standards under which such conduct

will be evaluated, and the procedures

which the FDIC will follow when

formally and informally enforcing the

provisions of Section 18(a)(4)

Misrepresentation of

Insured Status, and Misuse of the FDIC’s

Name or Logo.’’ The proposed subpart

sets forth the process by which the FDIC

will identify and investigate conduct

that may violate Section 18(a)(4), the

standards under which such conduct

will be evaluated, and the procedures

which the FDIC will follow when

formally and informally enforcing the

provisions of Section 18(a)(4).

Section 328.100—Scope

Section 328.100 notes that, unlike

many FDIC regulations, which are

binding upon IDIs and institution-

affiliated parties (IAPs), this regulation,

consistent with the authority set forth in

Section 18(a)(4), will apply to any

person who violates Section 18(a)(4) or

who aids another in such a violation.

Section 328.101—Definitions

Section 328.101 sets forth certain

definitions that will be used throughout

the subpart. Such definitions include,

but are not limited to the terms or

phrases ‘‘non-deposit product,’’

‘‘uninsured financial product,’’ ‘‘FDIC-

associated images,’’ and ‘‘FDIC-

associated terms.’’

Section 328.102—Prohibition

Section 328.102 sets forth the conduct

that is prohibited by Section 18(a)(4). It

further provides transparency by setting

forth the FDIC’s interpretation of the

scope of prohibited conduct, including

specific examples of conduct that the

FDIC deems to violate Section 18(a)(4).

The identified practices include

instances where false statements are

made regarding the existence or extent

of deposit insurance associated with a

product, as well as instances where

material information is omitted from a

representation (e.g., where a non-bank

third party represents that its products

are FDIC-insured without identifying

the name or the names of the IDIs where

customer deposits will be placed and

through whom such insurance is

derived.) These examples are not meant

to be an exhaustive list, but rather

specific examples of the type of conduct

that the FDIC has observed that violate

the prohibitions in Section 18(a)(4)

a non-bank

third party represents that its products

are FDIC-insured without identifying

the name or the names of the IDIs where

customer deposits will be placed and

through whom such insurance is

derived.) These examples are not meant

to be an exhaustive list, but rather

specific examples of the type of conduct

that the FDIC has observed that violate

the prohibitions in Section 18(a)(4).

This list is not intended to be an

exhaustive list, and the FDIC may

modify the list based on responses to

this notice or the RFI.

The section further sets forth certain

standards that the FDIC will use to

determine if a statement violates Section

18(a)(4). The standards laid out in

§ 328.102 are adapted from the

standards that Federal Trade

Commission developed decades ago to

determine if acts or practices are

deceptive in violation of Section 5 of the

Federal Trade Commission Act, 15

U.S.C. 45 (Section 5).7 While Section

18(a)(4) is separate from Section 5, it

prohibits similar conduct—deception in

connection with commerce. The

standards governing deception under

Section 5 have been consistently

accepted by courts,8 and used by the

FTC and other agencies, including the

FDIC, which enforces prohibitions of

Section 5 against the institutions it

supervises and IAPs of those

institutions.9 In light of the long-term

use and acceptance of these standards,

the FDIC believes it is appropriate to use

similar standards to determine if a

representation about deposit insurance

violates Section 18(a)(4).

Section 328.102 also sets forth a

bright-line rule for when the FDIC will

presume a misrepresentation to have

been knowingly made (i.e., when a

respondent continues to make

representations about deposit insurance

after having been advised by a

governmental or regulatory authority

that such representations are false or

misleading)

tation about deposit insurance

violates Section 18(a)(4).

Section 328.102 also sets forth a

bright-line rule for when the FDIC will

presume a misrepresentation to have

been knowingly made (i.e., when a

respondent continues to make

representations about deposit insurance

after having been advised by a

governmental or regulatory authority

that such representations are false or

misleading). This bright-line rule is not,

however, intended to be the exclusive

manner in which the FDIC can establish

that any misrepresentation was

knowingly made, and the agency

reserves the right to establish this

statutory element by introducing other

evidence.

Section 328.103—Inquiries and

Complaints

Section 328.103 provides a process by

which members of the public may

submit complaints to the FDIC regarding

suspected false or misleading

representations about deposit insurance.

It also directs members of the public to

the agency’s existing resources to

submit inquiries about representations

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10 12 U.S.C. 1820(c).

11 12 CFR 308.144–150.

12 12 U.S.C. 1818. Specifically, the FDIC is

authorized to pursue actions under Section 8(b), (c),

(d), or (i) to enforce the provisions of Section

18(a)(4).

regarding deposit insurance to the

FDIC’s Information and Support Center.

The FDIC believes that having a

specified point-of-contact for depositors

and prospective depositors who may

have questions about deposit insurance

coverage will be of particular value to

the public given the increasing volume

of communication and advertising

relating to financial products that

members of the public receive over

various media, including social media

and electronic communication

C believes that having a

specified point-of-contact for depositors

and prospective depositors who may

have questions about deposit insurance

coverage will be of particular value to

the public given the increasing volume

of communication and advertising

relating to financial products that

members of the public receive over

various media, including social media

and electronic communication. This

process represents a continuation of the

Information and Support Center’s role of

aiding the FDIC’s mission of ensuring

and promoting the stability and

confidence of the banking system by

responding to inquiries from the public.

Section 328.104—Investigation

Section 328.104 sets forth procedures

for formal investigations into potential

violations of Section 18(a)(4). Among

other things, the section delegates

authority to the FDIC’s General Counsel

to investigate potential violations and

provides that such investigations will be

conducted in accordance with section

10(c) of the Federal Deposit Insurance

Act 10 and the FDIC’s rules governing

investigations, which are found in

subpart K of the FDIC’s Rules of Practice

and Procedure.11 Section 328.104

further provides that, notwithstanding

the longstanding confidentiality

provisions found in 12 CFR 308.147, in

those limited circumstances where there

is risk of imminent harm to consumers

or depositors, the FDIC may disclose the

existence of an investigation under this

part that does not involve a bank or a

known IAP of a bank. This disclosure

authorization, which is a departure from

the general practice of maintaining the

confidentiality of investigations, is

intended to further the FDIC’s mission

of promoting confidence and stability in

the banking system by allowing it to

disclose investigations into potentially

false or misleading representations

about deposit insurance where there is

a risk of imminent harm to consumers

or depositors

n, which is a departure from

the general practice of maintaining the

confidentiality of investigations, is

intended to further the FDIC’s mission

of promoting confidence and stability in

the banking system by allowing it to

disclose investigations into potentially

false or misleading representations

about deposit insurance where there is

a risk of imminent harm to consumers

or depositors.

Section 328.105—Referral to

Appropriate Authority

Section 328.105 sets forth

circumstances under which the FDIC

may notify other authorities of potential

violations of law that it becomes aware

of in connection with a complaint,

inquiry, investigation or action under

this subpart.

Section 328.105 provides that the

FDIC may recommend that another

appropriate Federal banking agency take

action to enforce Section 18(a)(4) against

an IDI that is subject to the authority of

that appropriate Federal banking agency

or an IAP of such an institution. Such

recommendations are authorized by

Section 18(a)(4), which also provides

that if the appropriate Federal banking

agency fails to take action within 30

days, the FDIC may take enforcement

action.

Section 328.105 further provides that,

in the event the FDIC becomes aware of

conduct that potentially violates laws or

regulations within the jurisdiction of

another regulatory authority, the FDIC

may take steps to notify the appropriate

authority.

Section 328.105 also provides that, in

the event the FDIC becomes aware of

conduct that potentially constitutes a

criminal violation of 18 U.S.C. 709, the

FDIC may, in appropriate

circumstances, notify the FDIC Office of

the Inspector General or the appropriate

criminal law authority.

Finally, § 328.105 contains provisions

governing the provision of any records

to other regulatory or criminal

authorities in connection with notice

under the section

mes aware of

conduct that potentially constitutes a

criminal violation of 18 U.S.C. 709, the

FDIC may, in appropriate

circumstances, notify the FDIC Office of

the Inspector General or the appropriate

criminal law authority.

Finally, § 328.105 contains provisions

governing the provision of any records

to other regulatory or criminal

authorities in connection with notice

under the section.

Section 328.106—Informal Resolution

Historically, the FDIC has generally

resolved apparent violations of Section

18(a)(4) informally by notifying the

party responsible and requesting that

the apparent false or misleading

representation be withdrawn and

corrected. Section 328.106 sets forth the

process the FDIC will follow when

pursuing an informal resolution. Under

this process, the FDIC will generally

send any person that appears to be

making a false or misleading

representation, or any person aiding or

abetting such a representation, an

advisory letter notifying the person of

the basis for the FDIC’s concerns and

requesting corrective action. Such

letters will also provide the recipient

the opportunity to provide the FDIC

with supplemental information if the

recipient contends that the

representations made are true and not

misleading and/or that any use of the

FDIC’s name or logo is authorized.

Examples of the general form such

advisory letters may take may be found

on the FDIC’s public website at https://

www.fdic.gov/regulations/laws/federal/

2021/template-advisory-letters.pdf.

Form A–1 provides a template advisory

letter for communicating directly with a

person that is believed to be misusing

the FDIC’s name or logo or making false

or misleading representations about

deposit insurance. Form A–2 provides a

template advisory letter for

communications directed to a third-

party publisher that may be

disseminating potentially false or

misleading representations regarding

deposit insurance

te advisory

letter for communicating directly with a

person that is believed to be misusing

the FDIC’s name or logo or making false

or misleading representations about

deposit insurance. Form A–2 provides a

template advisory letter for

communications directed to a third-

party publisher that may be

disseminating potentially false or

misleading representations regarding

deposit insurance. Form A–3 provides a

template for communications with

internet service providers (ISPs),

alerting them that a website hosted by

the ISP may be making false

representations in violation of Section

18(a)(4).

Generally, the FDIC will only send

such advisory letters to an ISP if the

website in question contains one or

more indicia of fraud. Such indicia

would include, among other things,

evidence that: (1) The website purports

to belong to or be associated with an IDI

when the IDI disclaims any ownership

or association with the website; (2) the

website appears to mirror or look like a

valid website maintained by an IDI by

spoofing or copying photos or pages

from the IDI’s website in an attempt to

deceive depositors into believing that

the website belongs to or is associated

with the IDI; (3) the website purports to

belong to an IDI, when no such IDI

exists; or (4) there are geographic or

other inconsistencies on the site (e.g.,

the website is hosted abroad or the

contact information reflected on the site

does not match those on file with the

FDIC).

Section 328.106 further provides that

if the recipient of such a letter takes the

requested corrective action within the

time requested, the FDIC will generally

take no further action. However, if the

recipient fails to timely take corrective

action, the FDIC may pursue all

remedies available to it

he

contact information reflected on the site

does not match those on file with the

FDIC).

Section 328.106 further provides that

if the recipient of such a letter takes the

requested corrective action within the

time requested, the FDIC will generally

take no further action. However, if the

recipient fails to timely take corrective

action, the FDIC may pursue all

remedies available to it. Additionally,

pursuant to § 328.106, the FDIC may

commence formal enforcement action at

any time if the FDIC has reason to

believe that depositors or IDIs may

suffer harm as a result of continued

conduct or if the person making the

false or misleading representation has

been previously advised of the agency’s

concerns.

Section 328.107—Formal Enforcement

Action

Section 328.107 sets forth the

procedures that will govern any formal

enforcement action brought by the FDIC

to enforce the provisions of Section

18(a)(4). Under § 328.107, and as

authorized by Section 18(a)(4), the FDIC

may bring formal actions to enforce

Section 18(a)(4) under section 8 of the

Federal Deposit Insurance Act (Section

8) 12 against any person in the same

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13 FDIC Call Report data, September 30, 2020.

14 See FDIC 2019 Annual Report, p. 38; FDIC 2020

Annual Report, p. 47.

manner and to the same extent that it

can bring such actions against insured

state nonmember banks and their IAPs

2

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13 FDIC Call Report data, September 30, 2020.

14 See FDIC 2019 Annual Report, p. 38; FDIC 2020

Annual Report, p. 47.

manner and to the same extent that it

can bring such actions against insured

state nonmember banks and their IAPs.

Section 328.107 authorizes the FDIC

General Counsel to bring an action

against any person to enforce the

provisions of Section 18(a)(4); however,

it provides that in the case of an IDI for

which another Federal banking agency

is the appropriate Federal banking

agency, the General Counsel can only

commence an action if the appropriate

Federal banking agency fails to take

action after receiving a recommendation

pursuant to § 328.105. It further

provides that administrative

proceedings brought to enforce Section

18(a)(4) will be governed by the FDIC’s

Rules of Practice and Procedure set forth

in Part 308 of the FDIC’s Regulations.

Section 328.107 also sets forth the

venue for formal enforcement actions. In

the case of actions against IDIs or IAPs,

venue will be in the federal judicial

district where the home office of the IDI

is located. This is consistent with the

venue provisions of Section 8. In actions

that do not involve IDIs or IAPs, venue

will be based on the residence of the

respondent, similar to the manner in

which venue is determined for general

civil actions under 29 U.S.C 1391. The

FDIC believes these venue provisions

are consistent with existing law and due

process.

Section 328.108—Appeals Process

Section 328.108 clarifies that any

order issued after hearings conducted

pursuant to this subpart is subject to

judicial review to the same extent as any

other order issued under Section 8.

While Section 18(a)(4) does not

expressly provide for judicial review, it

does authorize enforcement actions

under Section 8, which provides for

such review

process.

Section 328.108—Appeals Process

Section 328.108 clarifies that any

order issued after hearings conducted

pursuant to this subpart is subject to

judicial review to the same extent as any

other order issued under Section 8.

While Section 18(a)(4) does not

expressly provide for judicial review, it

does authorize enforcement actions

under Section 8, which provides for

such review. The FDIC believes that this

grant of authority includes the right to

seek judicial review and further believes

such right is necessary and appropriate.

Section 328.108 also provides that any

petitions for judicial review may be

filed in the court of appeals for the

federal circuit where the hearing was

held or the United States Court of

Appeals for the District of Columbia

Circuit. This venue provision is

consistent with the venue provisions of

Section 8 and provides respondents

with the same choice of venue provided

after any other FDIC enforcement

hearing.

IV. Expected Effects

The proposed rule, if adopted, would

primarily affect non-bank entities and

individuals who are potentially

misusing the FDIC’s name or logo or are

making false or misleading

representations about deposit insurance.

The FDIC currently insures 5,042

depository institutions 13 that could also

be affected; however in practice, the

proposed rule would primarily affect

non-bank entities and private

individuals. Since the adoption of

Section 18(a)(4) in 2008, the FDIC has

issued only one formal enforcement

order against a non-bank entity for

misuse of the FDIC’s name or logo or for

misrepresentations or false advertising

in relation to deposit insurance

tutions 13 that could also

be affected; however in practice, the

proposed rule would primarily affect

non-bank entities and private

individuals. Since the adoption of

Section 18(a)(4) in 2008, the FDIC has

issued only one formal enforcement

order against a non-bank entity for

misuse of the FDIC’s name or logo or for

misrepresentations or false advertising

in relation to deposit insurance.

However, as previously noted the FDIC

has observed a recent increase in the

number of instances where financial

services providers or other entities or

individuals have misused the FDIC’s

name or logo or have made

misrepresentations that would falsely

suggest to the public that these

providers’ products are FDIC-insured

and been subject to an informal

resolution. Between January 1, 2019,

and December 31, 2020, the FDIC has

worked with non-bank entities to reach

informal resolutions regarding the

potential misuse of the FDIC’s name or

logo and/or misrepresentations relation

to deposit insurance in at least 165

instances.14 Based on this experience,

the FDIC estimates that the proposed

rule, if adopted, would apply to

relatively few formal enforcement

actions and conservatively estimates

that it would affect fewer than 165

informal resolutions with non-bank

entities and individuals each year.

As discussed previously, the

proposed rule, if adopted, would clarify

the FDIC’s procedures for evaluating

potential violations of Section 18(a)(4).

The proposed rule would generally be

consistent with existing practices used

by the FDIC with respect to these

matters. Further the proposed rule, if

adopted, would not affect the

application of related criminal

prohibitions under 18 U.S.C. 709.

Therefore, the FDIC believes that the

proposed rule, if adopted, would be

unlikely to have any significant effect

on formal and informal enforcement of

the Section 18(a)(4) prohibitions

istent with existing practices used

by the FDIC with respect to these

matters. Further the proposed rule, if

adopted, would not affect the

application of related criminal

prohibitions under 18 U.S.C. 709.

Therefore, the FDIC believes that the

proposed rule, if adopted, would be

unlikely to have any significant effect

on formal and informal enforcement of

the Section 18(a)(4) prohibitions.

The FDIC believes that the proposed

rule, if adopted, would benefit FDIC-

insured institutions and members of the

public by further clarifying what

constitutes a violation of Section

18(a)(4), by creating a process by which

institutions and members of the public

can report suspected instances of false

advertising, misuse, or

misrepresentation regarding deposit

insurance, and by establishing clear

procedures by which the FDIC will

investigate and, where necessary,

formally and informally resolve

potential violations of Section 18(a)(4).

Specifically, the added transparency on

the FDIC’s processes for investigating

potential instances of misuse or

misrepresentation and, if needed,

resolution are expected to benefit the

parties involved by establishing a

common understanding of those

processes.

V. Alternatives

The FDIC has considered alternatives

to the rule but believes that adopting

subpart B to part 328 represents the

most appropriate option. As discussed

previously, Section 18(a)(4) establishes

prohibitions against the misuse of the

FDIC’s name or logo and prohibits

misrepresentations and false advertising

in relation to deposit insurance. The

FDIC considered the status quo

alternative of not adopting a regulation

that further clarifies what constitutes

misuse of FDIC name or logo or false or

misleading representation with respect

to FDIC insurance, how the FDIC will

identify and investigate suspected

instances of misuse or

misrepresentation, and the process by

which the FDIC will pursue formal or

informal resolution of instances of

misuse or misrepresentation

ernative of not adopting a regulation

that further clarifies what constitutes

misuse of FDIC name or logo or false or

misleading representation with respect

to FDIC insurance, how the FDIC will

identify and investigate suspected

instances of misuse or

misrepresentation, and the process by

which the FDIC will pursue formal or

informal resolution of instances of

misuse or misrepresentation. However,

based on the FDIC’s recent experience

addressing instances of potential and

actual misuse, misrepresentation, and

false advertising in relation to the FDIC

name and logo, the FDIC believes that

the proposed rule is the most

appropriate action.

VI. Request for Comments

The FDIC invites comments on all

aspects of this proposed rulemaking. In

particular, the FDIC seeks feedback on

the scope of the proposed rule and the

procedures described therein, including

the following specific questions:

False Advertising, Misuse of Logo, and

Misrepresentations

1. Please describe the extent to which

the proposed rule sufficiently identifies

situations that present potential risks

related to false or misleading

representations regarding deposit

insurance coverage and the misuse of

the FDIC’s name or logo, including

those related to specific products and

advertising channels. If there are

additional types of false or misleading

representations about deposit insurance

coverage that may not be effectively

captured by the rule, please describe

them.

2. Please describe the extent to which

the proposed rule sufficiently addresses

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ional types of false or misleading

representations about deposit insurance

coverage that may not be effectively

captured by the rule, please describe

them.

2. Please describe the extent to which

the proposed rule sufficiently addresses

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15 5 U.S.C. 601, et seq.

16 The SBA defines a small banking organization

as having $600 million or less in assets, where an

organization’s ‘‘assets are determined by averaging

the assets reported on its four quarterly financial

statements for the preceding year.’’ See 13 CFR

121.201 (as amended, by 84 FR 34261, effective

August 19, 2019). ‘‘SBA counts the receipts,

employees, or other measure of size of the concern

whose size is at issue and all of its domestic and

foreign affiliates.’’ See 13 CFR 121.103. Following

these regulations, the FDIC uses a covered entity’s

affiliated and acquired assets, averaged over the

preceding four quarters, to determine whether the

covered entity is ‘‘small’’ for the purposes of RFA.

17 FDIC Call Report data, September 30, 2020.

18 How to Comply with the Regulatory Flexibility

Act, August 2017, The U.S. Small Business

Administration, Office of Advocacy, https://

cdn.advocacy.sba.gov/wp-content/uploads/2019/

06/21110349/How-to-Comply-with-the-RFA.pdf.

19 Public Law 106–102, section 722, 113 Stat.

1338, 1471 (1999).

false or misleading representations

regarding deposit insurance and the

misuse of the FDIC’s name and logo. If

there are additional or alternative ways

to more effectively or efficiently address

such misrepresentations and/or misuse,

please describe them.

3

-content/uploads/2019/

06/21110349/How-to-Comply-with-the-RFA.pdf.

19 Public Law 106–102, section 722, 113 Stat.

1338, 1471 (1999).

false or misleading representations

regarding deposit insurance and the

misuse of the FDIC’s name and logo. If

there are additional or alternative ways

to more effectively or efficiently address

such misrepresentations and/or misuse,

please describe them.

3. Please describe any suggested

additions to the proposed rule for

preventing and addressing the risks of

false or misleading representations

regarding deposit insurance and/or the

misuse of the FDIC’s name and logo.

Procedures for Investigations, Informal

Resolution, and Formal Enforcement

Actions

4. Are the proposed complaint and

inquiry procedures sufficiently clear

about how business entities and

members of the public may contact the

FDIC if they have questions or concerns

relating to potentially false or

misleading representations regarding

deposit insurance or misuse of the

FDIC’s name and logo? Are there other

types of procedures the FDIC should

consider? If so, please describe them.

5. Are there other alternative,

effective, and efficient methods by

which a customer can ensure that a

third-party’s representations regarding

deposit insurance are true and accurate?

If so, please describe them.

6. Is the proposed informal resolution

process an adequate means of

addressing, in the first instance in most

circumstances, potentially false or

misleading representations regarding

deposit insurance or misuse of the

FDIC’s name and logo? Should the FDIC

consider other or additional procedures?

If so, please describe them.

7. The proposed rule contains a

provision that would permit the FDIC,

in those limited circumstances where

there is risk of imminent harm to

consumers or depositors, to confirm the

existence of a formal investigation, so

long as the target of the investigation

was not an IDI or a known IAP thereof

logo? Should the FDIC

consider other or additional procedures?

If so, please describe them.

7. The proposed rule contains a

provision that would permit the FDIC,

in those limited circumstances where

there is risk of imminent harm to

consumers or depositors, to confirm the

existence of a formal investigation, so

long as the target of the investigation

was not an IDI or a known IAP thereof.

This provision would be an exception to

the longstanding confidentiality

provisions found in 12 CFR 308.147. Is

such an exception appropriate? Does the

proposed rule strike an appropriate

balance between the need to maintain

the confidentiality of investigations

involving IDIs and known IAPs, versus

the potential value in identifying the

existence of investigations into non-

bank persons and entities whose

conduct may result in risk of imminent

harm to consumers and depositors? Are

there alternatives the FDIC should

consider? If so, please describe them.

8. Is the formal enforcement action

process sufficiently clear, given that

Section 18(a)(4) expressly references the

use of established enforcement

mechanisms set forth in Section 8 of the

FDI Act? Should other provisions be

added? If so, please describe them.

9. Do the investigation, informal

resolution, and formal enforcement

action processes described in the

proposed rule strike the appropriate

balance between addressing in a timely

manner potentially false or misleading

representations regarding deposit

insurance and allowing the parties

identified as potentially participating in

the false or misleading representations

an opportunity to present additional

facts or provide a legal defense?

Other Areas of Concern

10

rocesses described in the

proposed rule strike the appropriate

balance between addressing in a timely

manner potentially false or misleading

representations regarding deposit

insurance and allowing the parties

identified as potentially participating in

the false or misleading representations

an opportunity to present additional

facts or provide a legal defense?

Other Areas of Concern

10. Upon entering into a relationship

or arrangement with a third-party non-

bank entity, as part of FDIC-insured

institutions’ due diligence, do such

institutions currently take steps to

ensure: (a) That the non-bank is aware

of existing laws and regulations related

to the use of the FDIC’s name and logo,

and (b) that representations made by the

non-bank regarding the insured status of

bank products are accurate and comply

with existing laws and regulations? If

not, are there practices that FDIC-

insured institutions could adopt to

spread awareness of and compliance

with these laws and regulations by non-

banks?

11. Are there other topics or issues

relating to false or misleading

representations regarding deposit

insurance or the misuse of the FDIC’s

name and logo that the FDIC should

consider? If so, please describe them

and how you think the FDIC should

address those topics and issues.

Written comments must be received

by the FDIC no later than July 9, 2021.

VII. Administrative Law Matters

A

11. Are there other topics or issues

relating to false or misleading

representations regarding deposit

insurance or the misuse of the FDIC’s

name and logo that the FDIC should

consider? If so, please describe them

and how you think the FDIC should

address those topics and issues.

Written comments must be received

by the FDIC no later than July 9, 2021.

VII. Administrative Law Matters

A. The Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA),

requires that, in connection with a

notice of proposed rulemaking, an

agency prepare and make available for

public comment an initial regulatory

flexibility analysis that describes the

impact of the proposed rule on small

entities.15 However, a regulatory

flexibility analysis is not required if the

agency certifies that the rule will not

have a significant economic impact on

a substantial number of small entities,

and publishes its certification and a

short explanatory statement in the

Federal Register together with the rule.

The Small Business Administration

(SBA) has defined ‘‘small entities’’ to

include banking organizations with total

assets of less than or equal to $600

million.16 Generally, the FDIC considers

a significant effect to be a quantified

effect in excess of 5 percent of total

annual salaries and benefits per

institution, or 2.5 percent of total

noninterest expenses. The FDIC believes

that effects in excess of these thresholds

typically represent significant effects for

FDIC-supervised institutions. For the

reasons provided below, the FDIC

certifies that the proposed rule, if

adopted in final form, would not have

a significant economic impact on a

substantial number of small banking

organizations. Accordingly, a regulatory

flexibility analysis is not required

believes

that effects in excess of these thresholds

typically represent significant effects for

FDIC-supervised institutions. For the

reasons provided below, the FDIC

certifies that the proposed rule, if

adopted in final form, would not have

a significant economic impact on a

substantial number of small banking

organizations. Accordingly, a regulatory

flexibility analysis is not required.

As of September 30, 2020, the FDIC

insured 5,042 depository institutions, of

which 3,585 are considered small

banking organizations for the purposes

of RFA.17 Potential instances of misuse

or misrepresentation of the FDIC name

or logo by IDIs are usually addressed

under the normal supervisory authority

of the appropriate federal financial

regulator, therefore although the

proposed rule could affect IDIs, in

practice the proposed rule would

primarily affect non-bank entities and

private individuals. Private individuals

are not considered ‘‘small entities’’ by

the terms of the RFA.18

Based on the information above, the

FDIC certifies that the proposed rule

would not have a significant economic

impact on a substantial number of small

entities.

The FDIC invites comments on all

aspects of the supporting information

provided in this RFA section. In

particular, would this rule have any

significant effects on small entities that

the FDIC has not identified?

B. Plain Language

Section 722 of the Gramm-Leach-

Bliley Act 19 requires the federal

banking agencies to use plain language

in all proposed and final rules

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ve any

significant effects on small entities that

the FDIC has not identified?

B. Plain Language

Section 722 of the Gramm-Leach-

Bliley Act 19 requires the federal

banking agencies to use plain language

in all proposed and final rules

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20 Public Law 104–208, 110 Stat. 3009 (1996).

21 12 U.S.C. 4802(a).

22 Id.

published after January 1, 2000. The

FDIC has sought to present the proposed

rule in a simple and straightforward

manner. The FDIC invites comments on

whether the proposal is clearly stated

and effectively organized, and how the

FDIC might make the proposal easier to

understand.

C. The Economic Growth and

Regulatory Paperwork Reduction Act

Under section 2222 of the Economic

Growth and Regulatory Paperwork

Reduction Act of 1996 (EGRPRA), the

FDIC is required to review all of its

regulations, at least once every 10 years,

in order to identify any outdated or

otherwise unnecessary regulations

imposed on insured institutions.20

D. Riegle Community Development and

Regulatory Improvement Act of 1994

Pursuant to section 302(a) of the

Riegle Community Development and

Regulatory Improvement Act

(RCDRIA),21 in determining the effective

date and administrative compliance

requirements for new regulations that

impose additional reporting, disclosure,

or other requirements on IDIs, each

Federal banking agency must consider,

consistent with principles of safety and

soundness and the public interest, any

administrative burdens that the

regulations would place on depository

institutions, including small depository

institutions, and customers of

depository institutions, as well as the

benefits of the regulations

nal reporting, disclosure,

or other requirements on IDIs, each

Federal banking agency must consider,

consistent with principles of safety and

soundness and the public interest, any

administrative burdens that the

regulations would place on depository

institutions, including small depository

institutions, and customers of

depository institutions, as well as the

benefits of the regulations. In addition,

section 302(b) of RCDRIA requires new

regulations and amendments to

regulations that impose additional

reporting, disclosures, or other new

requirements on IDIs generally to take

effect on the first day of a calendar

quarter that begins on or after the date

on which the regulations are published

in final form.22 The FDIC invites

comments that further will inform its

consideration of RCDRIA.

List of Subjects in 12 CFR Part 328

Advertising, Bank deposit insurance,

Savings associations, Signs and

symbols.

Authority and Issuance

For the reasons stated in the

preamble, the Federal Deposit Insurance

Corporation proposes to amend 12 CFR

part 328 as follows:

■1. Revise the heading for part 328 to

read as follows:

PART 328—ADVERTISEMENT OF

MEMBERSHIP, FALSE ADVERTISING,

MISREPRESENTATION OF INSURED

STATUS, AND MISUSE OF THE FDIC’S

NAME OR LOGO

■2. Revise the authority citation for part

328 to read as follows:

Authority: 12 U.S.C. 1818, 1819 (Tenth),

1820(c), 1828(a).

■3. Add new subpart A of part 328

entitled ‘‘Subpart A—Advertisement of

Membership.’’

■4. Redesignate §§ 328.0 through 328.4

as subpart A of part 328.

■5. Reserve §§ 328.5 through 328.99.

■6. Add a new part 328, subpart B to

read as follows:

Subpart B—False Advertising,

Misrepresentation of Insured Status,

and Misuse of the FDIC’s Name or

Logo.

Sec

18, 1819 (Tenth),

1820(c), 1828(a).

■3. Add new subpart A of part 328

entitled ‘‘Subpart A—Advertisement of

Membership.’’

■4. Redesignate §§ 328.0 through 328.4

as subpart A of part 328.

■5. Reserve §§ 328.5 through 328.99.

■6. Add a new part 328, subpart B to

read as follows:

Subpart B—False Advertising,

Misrepresentation of Insured Status,

and Misuse of the FDIC’s Name or

Logo.

Sec.

328.100

Scope

328.101

Definitions

328.102

Prohibition

328.103

Inquiries and Complaints

328.104

Investigations of Potential

Violations

328.105

Referral to Appropriate Authority

328.106

Informal Resolution

328.107

Formal Enforcement Actions

328.108

Appeals Process

Subpart B—False Advertising,

Misrepresentation of Insured Status,

and Misuse of the FDIC’s Name or

Logo

§ 328.100

Scope.

This Subpart applies to any person

who: (1) Falsely represents, expressly or

by implication, that any deposit

liability, obligation, certificate, or share

is FDIC-insured by using the FDIC’s

name or logo; (2) knowingly

misrepresents, expressly or by

implication, that any deposit liability,

obligation, certificate, or share is

insured by the FDIC if such an item is

not so insured; (3) knowingly

misrepresents, expressly or by

implication, the extent to which or the

manner in which any deposit liability,

obligation, certificate, or share is

insured by the FDIC, if such an item is

not insured to the extent or manner

represented; or (4) aid or abets another

in any of the foregoing.

§ 328.101

Definitions.

For purposes of this subpart:

(a) Advertisement means a

commercial message, in any medium,

that is designed to attract public

attention or patronage to a product,

business, or service.

(b) Appropriate Federal Banking

Agency has the meaning set forth in

section 3(q) of the FDIC (12 U.S.C.

1813(q)).

(c) FDIA means the Federal Deposit

Insurance Act, 12 U.S.C. 1811 et seq.

(d) FDIC means the Federal Deposit

Insurance Corporation.

ement means a

commercial message, in any medium,

that is designed to attract public

attention or patronage to a product,

business, or service.

(b) Appropriate Federal Banking

Agency has the meaning set forth in

section 3(q) of the FDIC (12 U.S.C.

1813(q)).

(c) FDIA means the Federal Deposit

Insurance Act, 12 U.S.C. 1811 et seq.

(d) FDIC means the Federal Deposit

Insurance Corporation.

(e) FDIC-Associated Images means the

Seal of the FDIC, alone or within the

letter C of the term FDIC; the Official

Sign and Symbol of the FDIC, as set

forth in 12 CFR 328.1; the Official

Advertising Statement, as set forth in 12

CFR 328.3(b); any similar images; and

any other signs and symbols that may

represent or imply that any deposit,

liability, obligation certificate, or share

is insured or guaranteed by the FDIC.

(f) FDIC-Associated Terms means the

abbreviation, ‘‘FDIC,’’ and the following

words or phrases: ‘‘Federal Deposit

Insurance Corporation,’’ ‘‘Federal

Deposit,’’ ‘‘Federal Deposit Insurance,’’

‘‘FDIC-insured,’’ ‘‘FDIC insurance,’’

‘‘insured by FDIC,’’ ‘‘member FDIC;’’

any similar words or phrases; or any

other terms that may represent or imply

that any deposit, liability, obligation

certificate, or share is insured or

guaranteed by the FDIC.

(g) Federal Banking Agency has the

meaning set forth in section 3(z) of the

FDIC (12 U.S.C. 1813(z)).

(h) General Counsel means the

General Counsel of the FDIC or his or

her designee.

(i) Hybrid Product has the same

meaning as set forth under 12 CFR

328.3(e)(1)(ii).

(j) Institution-Affiliated Party (IAP)

has the same meaning as set forth under

section 3(u) of the FDIA, 12 U.S.C.

1813(u).

(k) Insured Deposit has the same

meaning as set forth under section 3(m)

of the FDIA, 12 U.S.C. 1813(m).

(l) Insured Depository Institution has

the same meaning as set forth under

section 3(c)(2) of the FDIA, 12 U.S.C.

1813(c)(2).

(m) Non-Deposit Product has the same

meaning as set forth under 12 CFR

328.3(e)(1)(i).

aning as set forth under

section 3(u) of the FDIA, 12 U.S.C.

1813(u).

(k) Insured Deposit has the same

meaning as set forth under section 3(m)

of the FDIA, 12 U.S.C. 1813(m).

(l) Insured Depository Institution has

the same meaning as set forth under

section 3(c)(2) of the FDIA, 12 U.S.C.

1813(c)(2).

(m) Non-Deposit Product has the same

meaning as set forth under 12 CFR

328.3(e)(1)(i).

(n) Person means a natural person,

sole proprietor, partnership,

corporation, unincorporated association,

trust, joint venture, pool, syndicate,

agency or other entity, association, or

organization, including a Regulated

Institution as defined in paragraph (o) of

this section.

(o) Regulated Institution means any

institution for which the FDIC, the

Office of the Comptroller of the

Currency, or the Board of Governors of

the Federal Reserve System is the

‘‘appropriate Federal banking agency’’

under section 3(q) of the FDIA, 12

U.S.C. 1813(q).

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(p) Third-Party Publisher means any

party that publishes, places, distributes,

or circulates advertising or marketing

materials, regardless of the platform or

media used for distribution, containing

FDIC-Associated Images, FDIC-

Associated Terms, or other claims

regarding FDIC insurance or guarantees.

Third-Party Publishers shall include,

but not be limited to: Publishers and

distributors of written, visual, or print

advertising; broadcasters of video or

audio advertisements; telemarketers;

internet or web-based distributors,

including internet service providers,

and email marketers; and direct mail

marketers and distributors.

, or other claims

regarding FDIC insurance or guarantees.

Third-Party Publishers shall include,

but not be limited to: Publishers and

distributors of written, visual, or print

advertising; broadcasters of video or

audio advertisements; telemarketers;

internet or web-based distributors,

including internet service providers,

and email marketers; and direct mail

marketers and distributors.

(q) Uninsured Financial Product

means any Non-Deposit Product,

Hybrid-Product, investment, security,

obligation, certificate, share, or financial

product other than an ‘‘Insured Deposit’’

as defined in paragraph (k) of this

section.

§ 328.102

Prohibition.

(a) Use of the FDIC Name or Logo.

(1) No person may represent or imply

that any Uninsured Financial Product is

insured or guaranteed by the FDIC by

using FDIC-Associated Terms as part of

any business name or firm name of any

person;

(2) No person may represent or imply

that any Uninsured Financial Product is

insured or guaranteed by the FDIC by

using FDIC-Associated Terms or by

using FDIC-Associated Images as part of

an Advertisement, solicitation, or other

publication or dissemination.

(3) This subsection applies, but is not

limited, to:

(i) An Advertisement for any

Uninsured Financial Product which

feature or include one or more FDIC-

Associated Terms or FDIC-Associated

Images, without a clear, conspicuous,

and prominent disclaimer that the

products being offered are not FDIC

insured or guaranteed;

(ii) An Advertisement for any

Uninsured Financial Product which

may be backed or guaranteed by an

entity other that the FDIC, but which

feature or include one or more FDIC-

Associated Terms or FDIC-Associated

Images, without a clear, conspicuous,

prominent, and accurate explanation as

to the actual nature and source of the

guarantee;

ts being offered are not FDIC

insured or guaranteed;

(ii) An Advertisement for any

Uninsured Financial Product which

may be backed or guaranteed by an

entity other that the FDIC, but which

feature or include one or more FDIC-

Associated Terms or FDIC-Associated

Images, without a clear, conspicuous,

prominent, and accurate explanation as

to the actual nature and source of the

guarantee;

(iii) An Advertisement for any Non-

Deposit Product or Hybrid Product by a

Regulated Institution which include any

statement or symbol which implies or

suggests the existence of Federal deposit

insurance relating to the Non-Deposit

product or Hybrid Product;

(iv) Publication or dissemination of

information, regardless of the media or

platform, that suggests or implies that

the party making the representation is

an FDIC-insured institution if this is not

in fact true.

(v) Publication or dissemination of

information, regardless of the media or

platform, that suggests or implies that

the party making the representation is

associated with an FDIC-insured

institution if the nature of the

association is not clearly,

conspicuously, prominently, and

accurately described.

(vi) Publication or dissemination of

information, regardless of the media or

platform, that suggests or implies that

the party making the representation is

the FDIC or any office, division, or

subdivision thereof, if this is not in fact

true.

(vii) Publication or dissemination of

information, regardless of the media or

platform, that suggests or implies that

the party making the representation is

associated with the FDIC or any office,

division, or subdivision thereof, if the

nature of the association is not clearly,

conspicuously, prominently, and

accurately described.

(b) False or Misleading

Representations regarding FDIC

Insurance.

(1) No person may knowingly make

false or misleading representations

about deposit insurance, including:

the party making the representation is

associated with the FDIC or any office,

division, or subdivision thereof, if the

nature of the association is not clearly,

conspicuously, prominently, and

accurately described.

(b) False or Misleading

Representations regarding FDIC

Insurance.

(1) No person may knowingly make

false or misleading representations

about deposit insurance, including:

(i) That any deposit liability,

obligation, certificate, or share is

insured, under this subpart, if such a

deposit is not so insured;

(ii) the extent to which any deposit

liability, obligation, certificate, or share

is insured under this subpart, if such

item is not insured to the extent

represented; or

(iii) the manner in which any deposit

liability, obligation, certificate, or share

is insured under this subpart, if such

item is not insured in the manner

represented.

(2) For the purposes of this

subsection, a statement is deemed to be

a statement regarding deposit insurance,

if it:

(i) Includes any FDIC-Associated

Images or FDIC-Associated Terms;

(ii) makes any representation,

suggestion, or implication about the

existence of FDIC insurance or the

extent or manner of coverage; or

(iii) makes any representation,

suggestion, or implication about the

existence, extent, or effectiveness of any

guarantee by FDIC in the event of

financial distress by Insured Depository

Institutions, whether a specific Insured

Depository Institution or Insured

Depository Institutions generally,

including but not limited to bank

failure, insolvency, or receivership of

such institutions.

(3) For the purposes of this

subsection, a statement regarding

deposit insurance violates this section,

if:

y

guarantee by FDIC in the event of

financial distress by Insured Depository

Institutions, whether a specific Insured

Depository Institution or Insured

Depository Institutions generally,

including but not limited to bank

failure, insolvency, or receivership of

such institutions.

(3) For the purposes of this

subsection, a statement regarding

deposit insurance violates this section,

if:

(i) The statement contains any

material representations which would

have the tendency or capacity to

mislead a reasonable consumer,

regardless of whether any such

consumer was actually misled; or

(ii) the statement omits material

information which would be necessary

to prevent a reasonable consumer from

being misled, regardless of whether any

such consumer was actually misled.

Where such a statement is made by a

person other than an Insured Depository

Institution, failure to identify the

name(s) of the Insured Depository

Institution(s) that will be receiving the

deposits is deemed a material omission.

(4) Without limitation, a false or

misleading representation is deemed to

be material if it states, suggests or

implies that:

(i) Uninsured Financial Products are

insured or guaranteed by the FDIC;

(ii) Insured Deposits (whether

generally or at a particular Regulated

Institution) are not insured or

guaranteed by the FDIC;

(iii) the amount of deposit insurance

coverage is different (whether greater or

less) than actually provided under the

FDIA;

(iv) the circumstances under which

deposit insurance may be paid are

different than actually provided under

the FDIA;

nteed by the FDIC;

(ii) Insured Deposits (whether

generally or at a particular Regulated

Institution) are not insured or

guaranteed by the FDIC;

(iii) the amount of deposit insurance

coverage is different (whether greater or

less) than actually provided under the

FDIA;

(iv) the circumstances under which

deposit insurance may be paid are

different than actually provided under

the FDIA;

(v) the requirements to qualify for

deposit insurance, or the process by

which deposit insurance would be paid,

are different from what is provided

under the FDIA and its implementing

regulations, including false or

misleading claims related to actions

required of depositors to qualify for or

obtain such insurance; or

(vi) Regulated Institutions may

convert Insured Deposits into another

form of liability that is not insured, such

as unsecured debt or equity.

(5) Without limitation, a

representation is deemed to have been

knowingly made if the person making

the representation:

(i) Has made false or misleading

representations regarding deposit

insurance;

(ii) has been advised by the FDIC in

an advisory letter, as provided in

§ 328.106(a) or has been advised by

another governmental or regulatory

authority, including, but not limited to,

another Federal banking agency, the

Federal Trade Commission, the U.S.

Department of Justice, or a state bank

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supervisor, that such representations are

false or misleading; and

agency, the

Federal Trade Commission, the U.S.

Department of Justice, or a state bank

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supervisor, that such representations are

false or misleading; and

(iii) thereafter, continues to make

these, or substantially-similar,

representations.

§ 328.103

Inquiries and Complaints.

Should any person have reason to

believe that anyone is or may be acting

in violation of section 18(a) of the FDIA

(12 U.S.C. 1828(a)) or this subpart, or

have questions regarding the accuracy of

deposit-related representations, such

individuals may contact the FDIC at the

FDIC Information and Support Center,

https://ask.fdic.gov/fdicinformation

andsupportcenter/s/, or by telephone at:

1–877–275–3342 (1–877–ASK–FDIC).

§ 328.104

Investigations of Potential

Violations.

(a) The General Counsel shall have

delegated authority to investigate

potential violations of section 18(a) of

the FDIA (12 U.S.C. 1828(a)) and this

subpart.

(b) Such investigations will be

conducted as prescribed under section

10(c) of the FDIA (12 U.S.C. 1820(c))

and subpart K of part 308 of the FDIC’s

Rules of Practice and Procedure (12 CFR

308.144–150). Notwithstanding the

general confidentiality provisions of 12

CFR 308.147, in cases which may pose

a risk of imminent harm to consumers

or depositors, the FDIC may disclose or

confirm the existence of an investigation

that does not involve an Insured

Depository Institution or a known IAP

thereof. Such disclosure shall not

disclose any information obtained or

uncovered during the course of the

investigation.

§ 328.105

Referral to Appropriate

Authority.

08.147, in cases which may pose

a risk of imminent harm to consumers

or depositors, the FDIC may disclose or

confirm the existence of an investigation

that does not involve an Insured

Depository Institution or a known IAP

thereof. Such disclosure shall not

disclose any information obtained or

uncovered during the course of the

investigation.

§ 328.105

Referral to Appropriate

Authority.

(a) If, in connection with the receipt

of an inquiry or complaint, or during the

course of an investigation, informal

resolution, or formal enforcement under

this subpart:

(1) The FDIC becomes aware of

conduct by a Regulated Institution for

which another Federal banking agency

is the appropriate Federal banking

agency or an Institution-Affiliated Party

of such an institution, that appears to

violate section 18(a) of the FDIA (12

U.S.C. 1828(a)), the FDIC may

recommend that the appropriate Federal

banking agency take appropriate

enforcement action. If the appropriate

Federal banking agency does not take

the recommended action within 30

days, the FDIC may pursue any and all

remedies available under section 18(a)

or the FDIA (12 U.S.C. 1828(a)) and this

subpart;

(2) the FDIC becomes aware of

conduct that the FDIC has reason to

believe violates a civil law or

regulations within the jurisdiction of

another regulatory authority, the FDIC

may take steps to notify the appropriate

authority; and

(3) the FDIC becomes aware of

conduct that the FDIC has reason to

believe violates 18 U.S.C. 709, the FDIC

may notify FDIC’s Office of Inspector

General for referral to the appropriate

criminal law enforcement authority.

o

believe violates a civil law or

regulations within the jurisdiction of

another regulatory authority, the FDIC

may take steps to notify the appropriate

authority; and

(3) the FDIC becomes aware of

conduct that the FDIC has reason to

believe violates 18 U.S.C. 709, the FDIC

may notify FDIC’s Office of Inspector

General for referral to the appropriate

criminal law enforcement authority.

(b) To the extent that any records are

provided to a regulatory or criminal law

enforcement authority, as set forth in

paragraph (a), of this section, the

provision of such records will be made

in accordance with the requirements of

part 309. Where such records were

obtained during the course of an

investigation, informal resolution, or

formal enforcement action, the General

Counsel shall be considered the Director

of the Corporation’s Division having

primary authority over records so

obtained.

§ 328.106

Informal Resolution.

(a) If the FDIC has reason to believe

that any person may be misusing an

FDIC-associated image or FDIC-

associated term or otherwise violating

§ 328.102(a), or may be making false or

misleading representations regarding

deposit insurance in violation of

§ 328.102(b), the FDIC may issue an

advisory letter to such a person and/or

any person who aids or abets another in

such conduct, including any Third-

Party Publisher. Generally, such an

advisory letter will:

(1) Alert the recipient of advisory

letter of the basis for the FDIC’s

concerns;

(2) Request that the person and/or

Third-Party Publisher:

rding

deposit insurance in violation of

§ 328.102(b), the FDIC may issue an

advisory letter to such a person and/or

any person who aids or abets another in

such conduct, including any Third-

Party Publisher. Generally, such an

advisory letter will:

(1) Alert the recipient of advisory

letter of the basis for the FDIC’s

concerns;

(2) Request that the person and/or

Third-Party Publisher:

(i) Take reasonable steps to prevent

any violations of section 18(a) of the

FDIA (12 U.S.C. 1828(a)) and this

subpart;

(ii) commit in writing to refrain from

such violations in the future; and

(iii) notify the FDIC in writing that the

identified concerns have been fully

addressed and remediated; and

(3) Offer the person or Third-Party

Publisher the opportunity to provide

additional information, documentation,

or justifications to substantiate the

representations made or otherwise

refute the FDIC’s expressed concerns.

(b) Except in cases where the FDIC

has reason to believe that consumers or

Insured Depository Institutions may

suffer harm arising from continued

violations, recipients of advisory letters

described in paragraph (a) of this

section, shall be provided not less than

fifteen (15) days to provide the

requested commitment, explanation, or

justification.

(c) Where a recipient of an advisory

letter described in paragraph (a) of this

section, provides the FDIC with the

requested written commitments within

the timeframe specified in the letter,

and where any required remediation has

been verified by FDIC staff, the FDIC

will generally take no further

administrative enforcement against such

a party under § 328.107.

ation, or

justification.

(c) Where a recipient of an advisory

letter described in paragraph (a) of this

section, provides the FDIC with the

requested written commitments within

the timeframe specified in the letter,

and where any required remediation has

been verified by FDIC staff, the FDIC

will generally take no further

administrative enforcement against such

a party under § 328.107.

(d) Where a recipient of an advisory

letter described in paragraph (a) of this

section, fails to respond to the letter;

fails to make the requested

commitments; or fails to provide

additional information, documentation,

or justifications that the FDIC, in its

discretion, finds adequate to

substantiate the representations made or

otherwise refute the concerns set forth

in the advisory letter, the FDIC may

pursue all remedies set forth in this

subpart.

(e) Nothing in this section shall

prevent the FDIC from commencing a

formal enforcement action under

§ 328.107 at any time before or after the

issuance of an advisory letter under this

section if:

(1) The FDIC has reason to believe

that consumers or Insured Depository

Institutions may suffer harm arising

from continued violations; or

(2) the person to whom such an

advisory letter would be sent has

previously received a similar advisory

letter from the FDIC under § 328.106(a).

§ 328.107

Formal Enforcement Actions.

(a) Enforcement Authority—For the

purpose of enforcing the requirements

of Section 18(a)(4) of the FDIA (12

U.S.C. 1818(a)(4)), the General Counsel

is authorized to bring administrative

enforcement actions against any person

under sections 8(b), (c), (d), and (i) of

the FDIA (12 U.S.C. 1818(b), 1818(c),

1818(d), and 1818(i)), in the same

manner and to the same extent as with

respect to a state nonmember insured

bank

the

purpose of enforcing the requirements

of Section 18(a)(4) of the FDIA (12

U.S.C. 1818(a)(4)), the General Counsel

is authorized to bring administrative

enforcement actions against any person

under sections 8(b), (c), (d), and (i) of

the FDIA (12 U.S.C. 1818(b), 1818(c),

1818(d), and 1818(i)), in the same

manner and to the same extent as with

respect to a state nonmember insured

bank. In the case of conduct by a

Regulated Institution for which another

Federal banking agency is the

appropriate Federal banking agency or

an institution-affiliated party of such an

institution, the General Counsel may not

bring an enforcement action under this

subpart unless the FDIC has provided

the appropriate Federal banking agency

with notice as set forth in section

105(a)(1) of this subpart and the

appropriate Federal banking agency

failed to take the recommended action.

(b) Venue—Unless the person who is

the subject of the enforcement action

consents to a different location, the

venue for an administrative action

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commenced under Section 18(a)(4) of

the FDIA (12 U.S.C. 1818(a)(4)), shall be

as follows:

(1) In a case where the person who is

the subject of the action is an Insured

Depository Institution or an IAP of an

Insured Depository Institution, in the

federal judicial district or territory in

which the home office of the Insured

Depository Institution is located;

May 10, 2021 / Proposed Rules

commenced under Section 18(a)(4) of

the FDIA (12 U.S.C. 1818(a)(4)), shall be

as follows:

(1) In a case where the person who is

the subject of the action is an Insured

Depository Institution or an IAP of an

Insured Depository Institution, in the

federal judicial district or territory in

which the home office of the Insured

Depository Institution is located;

(2) In a case where the person who is

the subject of the action is not an

Insured Depository Institution or an IAP

of an Insured Depository Institution, the

federal judicial district or territory

where the person who is the subject of

the action resides, if the subject resides

in the United States. If the subject of the

action does not reside in the United

States, the venue shall be where the

subject of the action conducts business

or the federal judicial district for the

District of Columbia.

(3) For the purposes of paragraph (1)

of this section, a natural person is

deemed to reside in the federal judicial

district where the natural person is

domiciled. A person other than a

natural person is deemed to reside in

the federal judicial district where it is

headquartered or has its principal place

of business.

(c) Rules of Practice and Procedure.

All actions brought and maintained

under this section will be subject to the

FDIC’s Rules of Practice and Procedure,

Subparts A–C of Part 308 (12 CFR

308.1–308.109).

§ 328.108

Appeals Process.

(a) A person who is the subject of a

final order issued after an

administrative action commenced

pursuant to this subpart may obtain

judicial review of such order in

accordance with the procedures set

forth in section 8(h)(2) of the FDIA (12

U.S.C. 1818(h)(2)).

ct to the

FDIC’s Rules of Practice and Procedure,

Subparts A–C of Part 308 (12 CFR

308.1–308.109).

§ 328.108

Appeals Process.

(a) A person who is the subject of a

final order issued after an

administrative action commenced

pursuant to this subpart may obtain

judicial review of such order in

accordance with the procedures set

forth in section 8(h)(2) of the FDIA (12

U.S.C. 1818(h)(2)).

(b) Petitions for review under this

section may be filed in the court of

appeals for the circuit where the hearing

was held or the United States Court of

Appeals for the District of Columbia

Circuit.

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, on April 21,

2021.

James P. Sheesley,

Assistant Executive Secretary.

[FR Doc. 2021–08690 Filed 5–7–21; 8:45 am]

BILLING CODE 6714–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. FAA–2021–0338; Project

Identifier AD–2020–01423–T]

RIN 2120–AA64

Airworthiness Directives; The Boeing

Company Airplanes

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: The FAA proposes to adopt a

new airworthiness directive (AD) for

certain The Boeing Company Model

787–8 and 787–9 airplanes. This

proposed AD was prompted by reports

that shimming requirements were not

met during the assembly of certain

structural joints, which can result in

reduced fatigue thresholds and cracking

of the affected structural joints. This

proposed AD would require repetitive

inspections for cracking of certain areas

of the aft wheel well bulkhead (AWWB)

body chord and AWWB side fitting and

failsafe straps, and repair of any

cracking found. The FAA is proposing

this AD to address the unsafe condition

on these products.

DATES: The FAA must receive comments

on this proposed AD by June 24, 2021

ffected structural joints. This

proposed AD would require repetitive

inspections for cracking of certain areas

of the aft wheel well bulkhead (AWWB)

body chord and AWWB side fitting and

failsafe straps, and repair of any

cracking found. The FAA is proposing

this AD to address the unsafe condition

on these products.

DATES: The FAA must receive comments

on this proposed AD by June 24, 2021.

ADDRESSES: You may send comments,

using the procedures found in 14 CFR

11.43 and 11.45, by any of the following

methods:

• Federal eRulemaking Portal: Go to

https://www.regulations.gov. Follow the

instructions for submitting comments.

• Fax: 202–493–2251.

• Mail: U.S. Department of

Transportation, Docket Operations, M–

30, West Building Ground Floor, Room

W12–140, 1200 New Jersey Avenue SE,

Washington, DC 20590.

• Hand Delivery: Deliver to Mail

address above between 9 a.m. and 5

p.m., Monday through Friday, except

Federal holidays.

For service information identified in

this NPRM, contact Boeing Commercial

Airplanes, Attention: Contractual & Data

Services (C&DS), 2600 Westminster

Blvd., MC 110–SK57, Seal Beach, CA

90740–5600; telephone 562–797–1717;

internet https://

www.myboeingfleet.com. You may view

this referenced service information at

the FAA, Airworthiness Products

Section, Operational Safety Branch,

2200 South 216th St., Des Moines, WA.

For information on the availability of

this material at the FAA, call 206–231–

3195. It is also available on the internet

at https://www.regulations.gov by

searching for and locating Docket No.

FAA–2021–0338.

Examining the AD Docket

You may examine the AD docket on

the internet at https://

www.regulations.gov by searching for

and locating Docket No. FAA–2021–

0338; or in person at Docket Operations

between 9 a.m. and 5 p.m., Monday

through Friday, except Federal holidays.

The AD docket contains this NPRM, any

comments received, and other

information. The street address for

Docket Operations is listed above

AD Docket

You may examine the AD docket on

the internet at https://

www.regulations.gov by searching for

and locating Docket No. FAA–2021–

0338; or in person at Docket Operations

between 9 a.m. and 5 p.m., Monday

through Friday, except Federal holidays.

The AD docket contains this NPRM, any

comments received, and other

information. The street address for

Docket Operations is listed above.

FOR FURTHER INFORMATION CONTACT: Greg

Rutar, Aerospace Engineer, Airframe

Section, FAA, Seattle ACO Branch, 2200

South 216th St., Des Moines, WA 98198;

phone and fax: 206–231–3529; email:

Greg.Rutar@faa.gov.

SUPPLEMENTARY INFORMATION:

Comments Invited

The FAA invites you to send any

written relevant data, views, or

arguments about this proposal. Send

your comments to an address listed

under ADDRESSES. Include ‘‘Docket No.

FAA–2021–0338; Project Identifier AD–

2020–01423–T’’ at the beginning of your

comments. The most helpful comments

reference a specific portion of the

proposal, explain the reason for any

recommended change, and include

supporting data. The FAA will consider

all comments received by the closing

date and may amend the proposal

because of those comments.

Except for Confidential Business

Information (CBI) as described in the

following paragraph, and other

information as described in 14 CFR

11.35, the FAA will post all comments

we receive, without change, to https://

www.regulations.gov, including any

personal information you provide. The

agency will also post a report

summarizing each substantive verbal

contact we receive about this proposed

AD.

Confidential Business Information

CBI is commercial or financial

information that is both customarily and

actually treated as private by its owner.

Under the Freedom of Information Act

(FOIA) (5 U.S.C. 552), CBI is exempt

from public disclosure

sonal information you provide. The

agency will also post a report

summarizing each substantive verbal

contact we receive about this proposed

AD.

Confidential Business Information

CBI is commercial or financial

information that is both customarily and

actually treated as private by its owner.

Under the Freedom of Information Act

(FOIA) (5 U.S.C. 552), CBI is exempt

from public disclosure. If your

comments responsive to this NPRM

contain commercial or financial

information that is customarily treated

as private, that you actually treat as

private, and that is relevant or

responsive to this NPRM, it is important

that you clearly designate the submitted

comments as CBI. Please mark each

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