FDIC Provides Additional Questions and Answers Regarding FDIC Official Signs and Advertising Requirements, False Advertising, Misrepresentation of Insured Status, and Misuse of the FDIC Name or Logo

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 328

RIN 3064-AF26

FDIC Official Signs and Advertising Requirements, False Advertising,

Misrepresentation of Insured Status, and Misuse of the FDIC’s Name or Logo

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending its

regulations governing use of the official FDIC sign and insured depository institutions’

(IDIs) advertising statements to reflect how depositors conduct business with IDIs today,

including through digital and mobile channels. The final rule also clarifies the FDIC’s

regulations regarding misrepresentations of deposit insurance coverage by addressing

specific scenarios where consumers may be misled as to whether they are conducting

business with an IDI and whether their funds are protected by federal deposit insurance.

The final rule is intended to enable consumers to better understand when they are

conducting business with an IDI and when their funds are protected by the FDIC’s

deposit insurance coverage.

DATES: The amendments made by the final rule are effective on April 1, 2024; with an

extended compliance date of January 1, 2025.

FOR FURTHER INFORMATION CONTACT: Division of Depositor and Consumer

Protection: Luke H. Brown, Associate Director, 202-898-3842, LuBrown@FDIC.gov;

Meron Wondwosen, Chief, Supervisory Policy, 202-898-7211,

MeWondwosen@FDIC.gov; Edward J. Hof, Senior Policy Analyst, 202-898-7213,

dments made by the final rule are effective on April 1, 2024; with an

extended compliance date of January 1, 2025.

FOR FURTHER INFORMATION CONTACT: Division of Depositor and Consumer

Protection: Luke H. Brown, Associate Director, 202-898-3842, LuBrown@FDIC.gov;

Meron Wondwosen, Chief, Supervisory Policy, 202-898-7211,

MeWondwosen@FDIC.gov; Edward J. Hof, Senior Policy Analyst, 202-898-7213,

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EdwHof@FDIC.gov. Legal Division: Vivek Khare, Counsel, 202-898-6847,

VKhare@fdic.gov; James Watts, Counsel, 202-898-6678, JWatts@FDIC.gov; Chantal

Hernandez, Senior Attorney, 202-898-7388, ChHernandez@fdic.gov.

SUPPLEMENTARY INFORMATION:

The FDIC is amending part 328 of its regulations, which includes requirements

for use of the official FDIC sign and IDIs’ advertising statements, as well as

misrepresentations of insured status and misuse of the FDIC’s name or logo. The final

rule generally: (1) modernizes and amends the rules governing the display of the official

sign in branches to also, for example, apply the rules to IDIs’ physical premises with

different layouts and designs where consumers have access to or transact with deposits;

(2) establishes and requires the display of the FDIC official digital sign on bank websites,

mobile applications, and certain IDI automated teller machines (ATMs) and other like

devices; (3) requires the use of disclosures differentiating deposits and non-deposit

products across all banking channels, including digital channels; (4) clarifies the FDIC’s

rules regarding misrepresentations of deposit insurance coverage by addressing specific

scenarios where information provided to consumers may be misleading; (5) amends the

definition of “non-deposit product” to include crypto-assets and specifically address safe

deposit box services; and (6) requires IDIs to establish and maintain written policies and

procedures addressing compliance with part 328

s regarding misrepresentations of deposit insurance coverage by addressing specific

scenarios where information provided to consumers may be misleading; (5) amends the

definition of “non-deposit product” to include crypto-assets and specifically address safe

deposit box services; and (6) requires IDIs to establish and maintain written policies and

procedures addressing compliance with part 328. As explained below, the final rule is

intended to enable consumers to better understand when they are conducting business

with an IDI and when their funds are protected by the FDIC’s deposit insurance

coverage.

A. Policy Objectives

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The banking landscape has significantly changed since 2006, when the FDIC last

updated its regulation on the official sign and advertising statement. For example,

consumers are increasingly relying on internet and mobile banking channels to access IDI

banking services, bank branches are continually evolving to serve depositors, and

financial technology (fintech) companies are offering consumers new options and

alternatives for accessing banking products and services. While these developments are

beneficial, they may make it more difficult for depositors and consumers to understand

when they are conducting business with an IDI and when their funds are protected by

FDIC deposit insurance. In addition, the FDIC has observed an increase in misleading

representations about deposit insurance on the internet, which can result in consumer

confusion and harm. These types of misleading statements create uncertainty and could

dilute and undermine the confidence that underpins banks and our nation’s broader

financial system.

To address ongoing market and technological developments, the amendments to

part 328 are intended to achieve several policy goals

ntations about deposit insurance on the internet, which can result in consumer

confusion and harm. These types of misleading statements create uncertainty and could

dilute and undermine the confidence that underpins banks and our nation’s broader

financial system.

To address ongoing market and technological developments, the amendments to

part 328 are intended to achieve several policy goals. Specifically, the FDIC intends to

bring the certainty and confidence historically provided by the FDIC official sign found

at banks’ teller windows to IDI digital channels through which depositors are

increasingly handling their banking needs today. These channels serve as the digital

teller windows of the modern banking landscape, and it is critical that these channels

provide clear, consistent, and accurate information about deposit insurance upon which

consumers, businesses, and other entities may base their financial decisions.

The final rule establishes sign requirements across all banking channels, including

evolving digital channels, to better align with how depositors conduct business with IDIs

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today. The sign requirements are also intended to more clearly distinguish insured

deposits from non-deposit products (which are not insured) and to help consumers

distinguish IDIs from non-banks in the digital age. The final rule allows consumers,

businesses, and other entities to better understand when their funds are protected by

FDICs deposit insurance, and when they may not be insured. At the same time, the sign

requirements are intended to permit flexibility for IDIs and other firms in the marketing

of their products and services.

The amendments to the FDIC’s rules regarding misrepresentations of deposit

insurance coverage are intended to address specific scenarios where information provided

to consumers may be misleading with respect to deposit insurance coverage

nsured. At the same time, the sign

requirements are intended to permit flexibility for IDIs and other firms in the marketing

of their products and services.

The amendments to the FDIC’s rules regarding misrepresentations of deposit

insurance coverage are intended to address specific scenarios where information provided

to consumers may be misleading with respect to deposit insurance coverage. In

particular, the FDIC is concerned that certain business relationships between IDIs and

non-banks may be confusing to many consumers. Consequently, the final rule requires

clear disclosures that will better inform consumers as to when their funds are protected by

FDIC deposit insurance. Further clarity in this area will be beneficial for both consumers

and the industry.

B. Background

The FDIC is an independent federal agency and its mission is to maintain stability

and public confidence in the nation’s financial system by, among other things, insuring

deposits at all IDIs. Today, there are about 4,654 IDIs in the United States.1 Since 1933,

the FDIC has taken action in accordance with its mission to restore public confidence in

the banking system in times of financial turmoil, including the severe financial crisis of

2008 to 2013, during the financial stress associated with the coronavirus disease 2019

1 Call Reports as of June 30, 2023.

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(COVID-19) pandemic, and, most recently, when large regional banks failed in the first

half of 2023. The FDIC has proactively sought to protect depositors and consumers,2

promote public confidence in insured deposits, and prevent false and misleading

representations about the manner and extent of FDIC deposit insurance

1 Call Reports as of June 30, 2023.

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(COVID-19) pandemic, and, most recently, when large regional banks failed in the first

half of 2023. The FDIC has proactively sought to protect depositors and consumers,2

promote public confidence in insured deposits, and prevent false and misleading

representations about the manner and extent of FDIC deposit insurance. Statutory

Authority and Regulations

Sign and advertising statement requirements for IDIs date back to the Banking

Act of 1935 and are now set forth in section 18(a) of the Federal Deposit Insurance Act

(FDI Act).3 Section 18(a) grants the FDIC authority to prescribe regulations with respect

to these requirements, which are currently contained in subpart A to 12 CFR part 328.4

The FDIC’s official sign and advertising statement regulations require IDIs to

continuously display the FDIC official sign where insured deposits are usually and

normally received in the bank’s principal place of business and at all of its branches and

to use an official advertising statement, such as “Member FDIC,” when advertising

deposit products and services, with few exceptions.5 The FDIC last made major

amendments to these regulations in 2006.6 The 2006 amendments refer to an IDI’s

physical premises and “Remote Service Facilities” but do not specify other banking

channels that have since evolved, such as digital banking channels.7

2 As used in this document, the term “consumer” means any current or potential depositor, including

natural persons, organizations, corporate entities, and governmental bodies. See 12 CFR 328.101.

3 12 U.S.C. 1828(a)(1). Section 9 of the FDI Act provides the FDIC with the authority to prescribe rules

and regulations as it may deem necessary to carry out the provisions of this Act or of any other law which it

has the responsibility of administering or enforcing. 12 U.S.C. 1819(a) Tenth

ng

natural persons, organizations, corporate entities, and governmental bodies. See 12 CFR 328.101.

3 12 U.S.C. 1828(a)(1). Section 9 of the FDI Act provides the FDIC with the authority to prescribe rules

and regulations as it may deem necessary to carry out the provisions of this Act or of any other law which it

has the responsibility of administering or enforcing. 12 U.S.C. 1819(a) Tenth.

4 See subpart A to 12 CFR part 328 (§§ 328.0 through 328.5-328.99).

5 See generally, 12 CFR part 328.

6 71 FR 66098 (Nov. 13, 2006).

7 See 12 CFR 328.2. “Remote Service Facility” includes any automated teller machine, cash dispensing

machine, point-of-sale terminal, or other remote electronic facility where deposits are received. 12 CFR

328.2(a)(1)(ii).

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Section 18(a)(4) of the FDI Act prohibits any person from misusing the name or

logo of the FDIC or from engaging in false advertising or making knowing

misrepresentations about deposit insurance.8 The FDIC has broad statutory authority in

this area and, in May 2022, issued specific regulations in subpart B to 12 CFR part 328

regarding false representations related to FDIC insurance and the misuse of the FDIC

name and logo.9

Developments in Consumer Access to Banking and Financial Services

In recent years, there have been significant changes in the provision of banking

products and services, including the widespread use of digital banking channels as a

critical and fundamental mechanism to access banking and financial services, the

evolution of bank branches’ role in serving consumers, and an increasingly broad array of

financial products offered through banking channels, including access to non-deposit

products. The following overview of these trends is intended to provide context for the

final rule, which seeks to enable consumers to better understand when they are

conducting business with an IDI and when their funds are protected by the FDIC’s

deposit insurance coverage

and an increasingly broad array of

financial products offered through banking channels, including access to non-deposit

products. The following overview of these trends is intended to provide context for the

final rule, which seeks to enable consumers to better understand when they are

conducting business with an IDI and when their funds are protected by the FDIC’s

deposit insurance coverage.

Many bank branches retain a traditional physical branch footprint, serving

depositors primarily at teller windows or stations. According to the FDIC’s 2021

8 12 U.S.C. 1828(a)(4). Section 18(a)(4) also provides the FDIC 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 misuses the FDIC name or logo or makes misrepresentations

about deposit insurance. 12 U.S.C. 1828(a)(4)(C)-(D). Furthermore, under Federal law, it is a criminal

offense to misuse the FDIC name or make false representations regarding deposit insurance. See 18 U.S.C.

709.

9 87 FR 33415 (June 2, 2022); Subpart B to 12 CFR part 328 (§§ 328.100 through 328.109). Subpart B

establishes the process by which the FDIC identifies and investigates conduct that may violate section

18(a)(4), the standards under which such conduct is evaluated, and the procedures the FDIC follows when

formally and informally enforcing the provisions of section 18(a)(4).

e 18 U.S.C.

709.

9 87 FR 33415 (June 2, 2022); Subpart B to 12 CFR part 328 (§§ 328.100 through 328.109). Subpart B

establishes the process by which the FDIC identifies and investigates conduct that may violate section

18(a)(4), the standards under which such conduct is evaluated, and the procedures the FDIC follows when

formally and informally enforcing the provisions of section 18(a)(4).

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National Survey of Unbanked and Underbanked Households (Household Survey),

roughly 63.4 percent of all banked households used a bank teller to access their accounts

at least once in the last 12 months, including 57.8 percent of the youngest banked

households between the ages of 15 to 24, and 72.2 percent of the oldest banked

households aged 65 or older.10 However, IDIs have increasingly begun operating

physical premises with different layouts and designs. These locations may include

electronically-staffed kiosks, interactive ATMs that provide remote assistance with a

teller, and teller-less cafés with internet access where deposits can be accepted on tablets

or through ATMs. The FDIC’s long-standing sign rules, focused on display of the

official sign at teller windows or stations, need to be updated to reflect these market

changes and the way banks and consumers conduct business.

The FDIC’s long-standing sign rules also do not reflect the digital banking

services now offered, such as online banking and mobile banking. For example, digital

banking channels enable banks to receive customer deposits through remote deposit

capture. For consumers that use these channels to make deposits, an IDI’s ATM,

website, or mobile application effectively serves as a digital teller window

DIC’s long-standing sign rules also do not reflect the digital banking

services now offered, such as online banking and mobile banking. For example, digital

banking channels enable banks to receive customer deposits through remote deposit

capture. For consumers that use these channels to make deposits, an IDI’s ATM,

website, or mobile application effectively serves as a digital teller window. The results of

the Household Survey show that the proportion of banked households that used mobile

banking as their primary method of bank account access increased from 34.0 percent in

2019 to 43.5 percent in 2021.11 The proportion of banked households that used online

banking as their primary method of bank account access was similar in 2019 (22.8

10 Federal Deposit Insurance Corporation (FDIC), 2021 National Survey of Unbanked and Underbanked

Households (October 2022), https://www.fdic.gov/analysis/household-survey/2021report.pdf.

11 Id. at 25.

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percent) and 2021 (22.0 percent).12 Combined, 65.4 percent of banked households in

2021 used mobile or online banking as their primary method of bank account access, up

from 56.8 percent in 2019.13 Given that nearly two-thirds of banked households

primarily access banking products through phones, computers, and other devices, the

FDIC believes it is critical to update its rules and provide consistent sign requirements for

digital channels.

Banking customers are also offered an increasingly wide array of financial

products and services, regardless of whether they are in a branch, using an ATM, or

connecting with an IDI through digital channels. In many instances, IDIs offer both

deposits and non-deposit products to consumers. For example, IDIs might allow

depositors in their branches to consult with an investment adviser and purchase securities

or mutual funds

an increasingly wide array of financial

products and services, regardless of whether they are in a branch, using an ATM, or

connecting with an IDI through digital channels. In many instances, IDIs offer both

deposits and non-deposit products to consumers. For example, IDIs might allow

depositors in their branches to consult with an investment adviser and purchase securities

or mutual funds. Options to purchase non-deposit products are continuing to evolve, with

some IDIs offering ATM or digital banking customers the ability to purchase crypto-

assets with their funds. In some cases, an IDI may provide its customers who initially

access the IDI’s website, ATM, or banking application the ability to purchase non-deposit

products from a third party. Absent adequate signs or disclosures, simultaneous offering

of both insured deposits and non-deposit products may lead bank customers (who are

aware that the IDI is insured by the FDIC) to mistakenly conclude that all of the financial

products being offered through their bank’s website or application are FDIC-insured.

Growth in the number of fintech companies has also blurred the distinction

between IDIs and non-banks in the eyes of many consumers, increasing the potential for

confusion regarding deposit insurance coverage. Business arrangements between IDIs

12 Id.

13 Id.

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and non-banks, including fintech companies, can take many forms and continue to evolve

at a rapid pace. In some cases, such business arrangements can present the risk of

consumer confusion. For example, an IDI and a fintech company might enter into an

arrangement where the fintech company offers the IDI’s deposit products and services to

the fintech company’s customers. In other instances, fintech companies might deposit

their customers’ funds at an IDI

nd continue to evolve

at a rapid pace. In some cases, such business arrangements can present the risk of

consumer confusion. For example, an IDI and a fintech company might enter into an

arrangement where the fintech company offers the IDI’s deposit products and services to

the fintech company’s customers. In other instances, fintech companies might deposit

their customers’ funds at an IDI. In such cases, the fintech company might represent to

its customers that the customers’ funds are FDIC-insured, or that they are insured by the

FDIC on a “pass-through” basis, without noting that it is subject to certain conditions.

The substantial increase in the number and types of arrangements and the various

representations that companies are making regarding deposit insurance coverage may

confuse many consumers. For example, inadequate disclosures may result in consumers

not understanding whether they are dealing with an IDI, and whether their funds are

insured by the FDIC.

Industry Outreach - Request for Information

In February 2020 and April 2021, the FDIC published Requests for Information

(collectively, the RFIs) in the Federal Register to seek public input regarding potential

modernization of the official sign and advertising rules to reflect changes in deposit-

taking via physical branch, digital, and mobile banking channels.14 In response to the

RFIs, the FDIC received 20 comments from trade associations, IDIs, and others.15 In

addition, FDIC staff met with representatives from IDIs, a technology service provider,

14 85 FR 18528 (Feb. 26, 2020); 86 FR 18528 (Apr. 9, 2021)

reflect changes in deposit-

taking via physical branch, digital, and mobile banking channels.14 In response to the

RFIs, the FDIC received 20 comments from trade associations, IDIs, and others.15 In

addition, FDIC staff met with representatives from IDIs, a technology service provider,

14 85 FR 18528 (Feb. 26, 2020); 86 FR 18528 (Apr. 9, 2021).

15 Comments to the RFIs can be found on the FDIC’s website, available at:

https://www.fdic.gov/resources/regulations/federal-register-publications/2020/2020-rfi-fdic-sign-and-

advertising-requirements-3064-za14.html and https://www.fdic.gov/resources/regulations/federal-register-

publications/2021/2021-rfi-fdic-official-sign-and-advertising-requirements-3064-za14.html.

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and consumer groups. Commenters generally recognized the importance and value of

displaying FDIC signs and the advertising statement, and some commenters stressed that

depositors place significant trust in FDIC signs. A summary of these comments was

provided in the December 2022 Notice of Proposed Rulemaking (NPR or proposal) and

the comments were considered as part of this rulemaking process.16

Previous Rulemaking

On May 17, 2022, the FDIC issued a final rule adding a new subpart B to 12 CFR

part 328.17 The final rule describes: (1) the process by which the FDIC will identify and

investigate conduct that may violate the prohibitions against misuse and

misrepresentation; (2) the standards under which such conduct will be evaluated; and (3)

the procedures that the FDIC will follow when formally and informally enforcing these

prohibitions. While this rulemaking was an important step, the FDIC has observed an

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

about FDIC insurance

uct will be evaluated; and (3)

the procedures that the FDIC will follow when formally and informally enforcing these

prohibitions. While this rulemaking was an important step, the FDIC has observed an

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

about FDIC insurance. Although the FDIC demanded that these non-banks cease and

desist from making false and misleading statements, such actions by non-banks caused

continuing challenges for consumers in determining whether they are conducting

business with an IDI and whether their funds are protected by the FDIC’s deposit

insurance coverage.18 This final rule will provide further clarification of subpart B to

address these challenges, particularly to address specific situations where consumers may

16 87 FR 78017, 78020 (Dec. 21, 2022).

17 87 FR 33415 (June 2, 2022).

18 A public list of FDIC cease and desist letters related to violations of section 18(a)(4) of the FDI Act can

be found on the FDIC’s website, available at: https://www.fdic.gov/resources/regulations/laws/section-

18a4-of-fdi-act/.

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be misled as to whether an entity is insured by the FDIC or as to the nature and extent of

deposit insurance coverage.

December 2022 Proposal and Comments

On December 13, 2022, the FDIC Board approved an NPR on the FDIC’s sign

and advertising requirements, rules on misrepresentation of insured status, and misuse of

the FDIC’s name or logo. The FDIC sought to obtain input from the public for these

proposed regulations in light of significant changes to bank branches and their role in

serving consumers, the proliferation of digital channels as a critical and fundamental

mechanism to access banking and financial services, and an increasingly broad array of

financial products offered through banking channels, including access to non-deposit

products

obtain input from the public for these

proposed regulations in light of significant changes to bank branches and their role in

serving consumers, the proliferation of digital channels as a critical and fundamental

mechanism to access banking and financial services, and an increasingly broad array of

financial products offered through banking channels, including access to non-deposit

products.

Specifically, the FDIC’s proposal aimed to modernize its sign and advertising

requirements to reflect current banking practices, like deposit-taking via physical

branches and similar locations, digital banking channels, and ATMs. The proposal

included three distinct signs relating to deposit insurance. The first pertained to the

official sign displayed at IDIs’ principal places of business. The NPR proposed to

modernize the requirements relating to display of the official sign to reflect developments

in the marketplace. The second was for a new digital official sign that IDIs would be

required to display on their digital deposit-taking channels, such as online banking

websites, mobile applications, and ATMs. Third, the FDIC proposed requiring IDIs to

display a non-deposit products sign indicating that such products: are not insured by the

FDIC; are not deposits; and may lose value (where the IDI offers both insured and

uninsured, non-deposit products through the same channel) in order to address potential

al deposit-taking channels, such as online banking

websites, mobile applications, and ATMs. Third, the FDIC proposed requiring IDIs to

display a non-deposit products sign indicating that such products: are not insured by the

FDIC; are not deposits; and may lose value (where the IDI offers both insured and

uninsured, non-deposit products through the same channel) in order to address potential

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customer confusion regarding a product’s insured status. The FDIC also proposed

limited amendments to its official advertising statement requirements to provide IDIs

with an additional option for a shortened official advertising statement. Finally, the

proposal included clarifications for the application of the misrepresentation statute in

specific situations where consumers may misunderstand or be misled as to whether an

entity is insured by the FDIC or the nature and extent of deposit insurance coverage.

The NPR solicited comments on all aspects of the proposed rule. The comment

period ended on April 7, 2023. The FDIC received 17 substantive comments from

financial institutions, industry groups, consumer organizations, investor advocacy groups,

crypto-asset/blockchain groups, deposit networks, and third-party vendors.19

A number of comments were supportive of the proposal. More specifically,

several comments supported the FDIC’s efforts to modernize its rules in light of changes

and innovation in the marketplace and to provide further clarity through deposit insurance

signage and advertisement requirements. Several comments also supported the FDIC’s

efforts to ensure consumers fully understand the insured status of products offered by

financial institutions. One commenter provided that the confusion over new and complex

financial products could undermine public confidence in the safety and reliability of the

mainstream banking system.

A number of commenters expressed a desire for more flexibility regarding the

proposed signage and disclosure requirements

sumers fully understand the insured status of products offered by

financial institutions. One commenter provided that the confusion over new and complex

financial products could undermine public confidence in the safety and reliability of the

mainstream banking system.

A number of commenters expressed a desire for more flexibility regarding the

proposed signage and disclosure requirements. Some commenters advocated for

increased flexibility in the placement of both physical and digital signage, noting the

19 Comments can be accessed at: https://www.fdic.gov/resources/regulations/federal-register-

publications/2022/2022-fdic-official-sign-advertising-requirements-3064-af26.html. In response to a

comment letter, the FDIC extended the comment period by 45 days to provide additional opportunity for

the public to prepare comments to address the matters raised by the NPR.

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costs entailed to comply with the proposed rule’s requirements.

Several financial institutions provided that the proposed rule focused on

community banks instead of non-banks that falsify their insured status, and noted that

banks already take affirmative steps to inform their customers about deposit insurance

coverage. However, other commenters commended the FDIC’s effort to improve clarity

for customers regarding deposit insurance coverage and reduce customer confusion,

given the rise of various banking services offered by the third parties.

Some comments advocated for stronger measures to address deposit insurance

misrepresentations. Specifically, a commenter suggested that FDIC should expressly

prohibit comparing an uninsured financial product to an insured product without clearly

and conspicuously noting the difference between insured and uninsured status.

Commenters also expressed views on an appropriate effective date for the rule.

One commenter recommended a minimum 18-month implementation period before the

final rule becomes effective

menter suggested that FDIC should expressly

prohibit comparing an uninsured financial product to an insured product without clearly

and conspicuously noting the difference between insured and uninsured status.

Commenters also expressed views on an appropriate effective date for the rule.

One commenter recommended a minimum 18-month implementation period before the

final rule becomes effective. Another commenter requested that the requirements related

to the digital sign be made effective after the industry has at least one year to comply.

C. Final Rule and Discussion of Comments

The FDIC has reviewed and carefully considered public comments received and

is generally finalizing the rule as proposed, with some changes and clarifications, as

described below. The amendments made by this final rule will take effect on April 1,

2024. However, full compliance with the amendments made by this final rule is extended

to January 1, 2025. The extended compliance date is intended to provide sufficient time

for financial institutions to put in place processes, systems and technological updates to

implement the new regulatory requirements described below.

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1. FDIC Official Sign

The FDIC did not receive comments on its official sign and will continue to use

the existing design of the official sign, which, in addition to prominently bearing the

name of the FDIC, includes statements indicating that each depositor is insured up to at

least $250,000 and that the FDIC’s deposit insurance is backed by the full faith and credit

of the United States government. In the proposed rule, the FDIC moved the reference to

the display of the official sign to proposed § 328.3, including the language that the

official sign must be in a size of 7″ by 3″ or larger with black lettering on a gold

background. After further consideration, the FDIC is including the official sign size and

color requirements as part of the official sign description under § 328.2 for ease of

reference under the final rule

the reference to

the display of the official sign to proposed § 328.3, including the language that the

official sign must be in a size of 7″ by 3″ or larger with black lettering on a gold

background. After further consideration, the FDIC is including the official sign size and

color requirements as part of the official sign description under § 328.2 for ease of

reference under the final rule. The FDIC also continues to reference this language in the

requirements for display of the official sign in § 328.3 under the final rule.

2. Sign Requirements on IDIs’ Physical Premises

Official sign in an IDI’s physical premises

Proposed Rule

Section 18(a) of the FDI Act requires all IDIs to display at each place of business

a sign or signs relating to the insurance of the deposits of the institution. The FDIC

proposed updated signage requirements in § 328.3 to govern signage within an IDI’s

premises. The proposed rule would have continued to require all IDIs to continuously,

clearly, and conspicuously display the official sign in their principal place of business and

all their U.S. branches.20 To accommodate evolving styles and footprints of branches,

the proposed rule also would have required IDIs to display the FDIC official sign in any

20 As stated in the NPR, the term “branch” would be defined by reference to the FDI Act’s definition of

“domestic branch,” 12 U.S.C. 1813(o).

al place of business and

all their U.S. branches.20 To accommodate evolving styles and footprints of branches,

the proposed rule also would have required IDIs to display the FDIC official sign in any

20 As stated in the NPR, the term “branch” would be defined by reference to the FDI Act’s definition of

“domestic branch,” 12 U.S.C. 1813(o).

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physical location where IDIs receive deposits other than teller windows or stations

(referred to as “non-traditional branches” in the preamble to the proposed rule).

Discussion of Comments

One commenter suggested that the FDIC eliminate references to “non-traditional

branches” and stated that non-branch locations should not be subject to the proposed

rule’s sign requirement. The commenter further stated that the proposed rule’s

requirements for physical premises would apply only to banks’ principal place of

business and branches. The commenter expressed concerns that the term “non-traditional

branch” could be over-inclusive and include non-branch locations, like deposit

production offices.

Final Rule

The FDIC is revising § 328.3(b) to now require that:

Each insured depository institution must continuously, clearly, and conspicuously

display the official sign at each place of business where consumers have access to

or transact with deposits, including all of its branches (except branches excluded

from the scope of this subpart under § 328.0) and other premises in the manner

described in this paragraph (b).21

This requirement is consistent with section 18(a) of the FDI Act, which provides

the FDIC authority to prescribe regulations for IDIs to display at each place of business a

sign or signs relating to the insurance of deposits of the institution.22

With respect to the comment that requested the FDIC not use the term “non-

traditional branches,” the FDIC did not intend to affect how the term “branch” is defined

21 Final 12 CFR 328.3(b

C authority to prescribe regulations for IDIs to display at each place of business a

sign or signs relating to the insurance of deposits of the institution.22

With respect to the comment that requested the FDIC not use the term “non-

traditional branches,” the FDIC did not intend to affect how the term “branch” is defined

21 Final 12 CFR 328.3(b) (emphasis added).

22 See 12 U.S.C. 1828(a)(1)(A), 1828(a)(2).

16

or interpreted in other regulations. In the preamble to the proposal, the FDIC used the

term “non-traditional branches” to help distinguish such places of business from what are

commonly viewed as the “traditional branches” where deposits are usually and normally

received at only teller windows. The FDIC intended for the term to describe the new

layouts and designs that some IDIs are using where deposits are usually and normally

received in areas other than teller windows or stations.23

However, to prevent potential confusion related to the term “branch” and its

applications in other regulations, the preamble to the final rule will not refer to the term

“non-traditional branches.” Rather, under the final rule, the signage requirements apply

to an IDI’s places of business where consumers have access to, or transact with, deposits,

including branches and other physical premises (e.g., café-style locations). As a result,

the types of bank premises that were intended to be covered under the proposal are

covered by the final rule. For example, under a scenario where an IDI usually and

normally receives insured deposits at a teller window or station and other areas within the

same premise, then pursuant to the final rule, the IDI is required to display the official

sign in accordance with the applicable signage requirements for each area as provided in

§ 328.3(b)

overed under the proposal are

covered by the final rule. For example, under a scenario where an IDI usually and

normally receives insured deposits at a teller window or station and other areas within the

same premise, then pursuant to the final rule, the IDI is required to display the official

sign in accordance with the applicable signage requirements for each area as provided in

§ 328.3(b).

Display of official sign when deposits received at teller windows or stations

Proposed rule

Under the proposed rule, if IDIs usually and normally receive deposits at teller

windows or stations, IDIs would have been required to display the official sign at each

teller window or station in a size of 7″ by 3″ or larger with black lettering on a gold

23 See final 12 CFR 328.3(b)(2).

17

background. The proposed rule would also have allowed flexibility with respect to

display of the official sign where the IDI usually and normally receives deposits at teller

windows or stations and only offers insured deposit products on the premises. In such

instances, an IDI would have the option to display the official sign at one or more

locations visible from the teller windows or stations in a manner that ensures a copy of

the official sign is large enough so as to be legible from anywhere in that area.

Discussion of comments

One commenter suggested that the FDIC provide IDIs with flexibility to display

clear and conspicuous signage and disclosures best suited for a particular branch facility.

The commenter further stated that branch managers and other employees are readily

available onsite to answer customer questions and address any confusion to the extent a

customer may have questions, even with the presence of clear, conspicuous disclosures

e FDIC provide IDIs with flexibility to display

clear and conspicuous signage and disclosures best suited for a particular branch facility.

The commenter further stated that branch managers and other employees are readily

available onsite to answer customer questions and address any confusion to the extent a

customer may have questions, even with the presence of clear, conspicuous disclosures.

With respect to IDIs that only offer insured deposit products on the premises, one

commenter requested clarification as to whether the proposed flexible option would apply

if the IDI’s larger locations offer non-deposit products. The same commenter also

commended the FDIC for providing flexibility in signage placement but sought an

example of what the FDIC would consider a sign “large enough to be legible from

anywhere in that area” to satisfy this flexible option.

Final Rule

The FDIC is finalizing the proposed requirements with respect to the display of

the official sign when IDIs usually and normally receive deposits at teller windows or

stations. The final rule will continue to require that IDIs display the official sign at each

teller window or station in a size of 7” by 3” or larger, with black lettering on a gold

18

background, if insured deposits are usually and normally received at teller windows or

stations.

As provided under the proposal, the FDIC believes that it is appropriate to allow

additional flexibility with respect to display of the official sign in instances when the IDI

usually and normally receives deposits at teller windows and stations and only offers

insured deposit products on the premises. In such cases, the requirement to display the

official sign at each teller window or station may be satisfied by displaying the official

sign in one or more locations visible from the teller windows or stations, in a size large

enough to be legible from anywhere in that area

and normally receives deposits at teller windows and stations and only offers

insured deposit products on the premises. In such cases, the requirement to display the

official sign at each teller window or station may be satisfied by displaying the official

sign in one or more locations visible from the teller windows or stations, in a size large

enough to be legible from anywhere in that area. This flexible option would apply to

branches that do not offer non-deposit products on the premises even if the IDI’s other

locations offer non-deposit products.24

Under the final rule, whether the display of the official sign is “large enough to be

legible from anywhere in that area” means that the average customer can easily see and

read the sign from a reasonable distance from that area. This would depend on factors

specific to the layout of the bank’s physical premises or places of business and the sign

used, such as the size and shape of the physical location, the area where deposits are

usually and normally accepted, a sign’s placement, a sign’s size, and its font and colors.

For example, if a bank’s place of business has two teller windows right next to each other

and it posts one official sign between the teller windows that is large enough to be legible

to depositors at both teller windows, that approach would meet the standard. Banks’

places of business vary significantly in size and layout, and the final rule is intended to

provide banks the flexibility to account for these physical variations.

24 See infra Non-Deposits Sign on IDI’s Premises Section for discussion on the offering of non-deposit

products.

oth teller windows, that approach would meet the standard. Banks’

places of business vary significantly in size and layout, and the final rule is intended to

provide banks the flexibility to account for these physical variations.

24 See infra Non-Deposits Sign on IDI’s Premises Section for discussion on the offering of non-deposit

products.

19

Display of official sign when deposits received in areas other than teller windows or

stations

Proposed Rule

Under the proposal, if an IDI usually and normally receives deposits in areas of

the premises other than teller windows or stations, IDIs would have been required to

display the official sign in one or more locations in a manner that ensures the official sign

is large enough so as to be legible from anywhere in those areas.

Discussion of comments

As discussed above, a commenter suggested that non-branch locations should not

be subject to the proposed rule’s sign requirements.

Final rule

Consistent with the proposal, the final rule provides that if insured deposits are

usually and normally received in areas of the premises other than teller windows or

stations (e.g., café-style locations), the IDI is required to display the official sign in one

or more locations in a size large enough to be legible anywhere in those deposit-taking

areas.25 The FDIC believes that such a requirement will help ensure that IDI customers

are aware that their deposits are protected by deposit insurance.

As discussed above, an IDI’s premises, including non-branch locations that

receive deposits in areas other than teller windows or stations, are subject to the final

rule’s requirements

enough to be legible anywhere in those deposit-taking

areas.25 The FDIC believes that such a requirement will help ensure that IDI customers

are aware that their deposits are protected by deposit insurance.

As discussed above, an IDI’s premises, including non-branch locations that

receive deposits in areas other than teller windows or stations, are subject to the final

rule’s requirements. For example, an IDI’s café-style location that does not receive

25 As discussed, whether the display of the official sign is “large enough to be legible from anywhere in

that area” means that the average customer can easily see and read the sign from a reasonable distance

from that area depending on factors specific to the layout of the bank’s physical branch and the sign used,

such as the size and shape of the physical location, the area where deposits are usually and normally

accepted, a sign’s placement, a sign‘s size, and its font and colors.

20

deposits at a teller window or station, but where customers engage with bankers in an

open area and customers have access to or transact with deposits, is subject to the sign

requirements under the final rule.

Non-deposit signage on an IDIs’ physical premises

Proposed Rule

When both insured deposits and non-deposit products are offered within the IDI’s

premises (regardless of whether deposits are received at teller windows or stations or

deposits are received in areas other than teller windows or stations), the proposed rule

would have required IDIs to display a non-deposit sign within a segregated area and not

in close proximity to the official sign. The proposed rule would have required that IDIs

continuously, clearly, and conspicuously display signage indicating that the non-deposit

products: are not insured by the FDIC; are not deposits; and may lose value

r than teller windows or stations), the proposed rule

would have required IDIs to display a non-deposit sign within a segregated area and not

in close proximity to the official sign. The proposed rule would have required that IDIs

continuously, clearly, and conspicuously display signage indicating that the non-deposit

products: are not insured by the FDIC; are not deposits; and may lose value.

Under the proposed rule, the definition of “non-deposit product” read as, “Any

product that is not a ‘deposit’, including, but not limited to: stocks, bonds, government

and municipal securities, mutual funds, annuities (fixed and variable), life insurance

policies (whole and variable), savings bonds, and crypto-assets. For purposes of this

definition, a credit product is not a non-deposit product.”26

Discussion of Comments

Non-deposit product definition. One commenter requested clarification on what

products constitute a non-deposit product under the proposed rule, such that they would

require the display of the non-deposit sign. Specifically, the commenter noted the

proposal only included life insurance policies that are whole or variable and requested

26 87 FR 78017, 78033, 78036 (Dec. 21, 2022).

21

clarification as to whether other types of insurance offerings are also included in the

definition. Moreover, the commenter requested clarification on whether safe deposit box

services would be considered a non-deposit product requiring the display of the non-

deposit sign.

Non-deposit sign design. With respect to the design of the non-deposit sign, one

commenter stated that it would not be necessary for the FDIC to fully standardize the

design, but recommended the FDIC set minimum standards for the sign such as a

minimum font size

on on whether safe deposit box

services would be considered a non-deposit product requiring the display of the non-

deposit sign.

Non-deposit sign design. With respect to the design of the non-deposit sign, one

commenter stated that it would not be necessary for the FDIC to fully standardize the

design, but recommended the FDIC set minimum standards for the sign such as a

minimum font size. Another commenter supported standardization of the non-deposit

sign and suggested a standardized icon, such as the red circle-backslash symbol overlaid

on the word “FDIC” or “FDIC-insured” with the phrase “NOT FDIC-insured”

underneath the symbol.

Display of non-deposit sign. Some commenters requested that the FDIC take a

less prescriptive approach with respect to the non-deposit sign requirements and adopt a

more flexible approach that can change with evolving technology and business practices.

Two commenters suggested that the FDIC adopt a single, centralized disclosure approach

to address deposit and non-deposit products rather than separate signage requirements.

Another commenter raised concerns that the costs of segregating physical signage across

multiple branch locations would be challenging in smaller branch locations and requested

further clarification when separation would be required for institutions with various

service offerings.

One commenter requested the FDIC define the term “offers” in relation to the

offering of non-deposit products on the IDI’s physical premises that would require the

display of the non-deposit sign. The commenter stated that they understood “offers” to

ller branch locations and requested

further clarification when separation would be required for institutions with various

service offerings.

One commenter requested the FDIC define the term “offers” in relation to the

offering of non-deposit products on the IDI’s physical premises that would require the

display of the non-deposit sign. The commenter stated that they understood “offers” to

22

mean that the bank has personnel on the premises who are licensed to sell non-deposit

products but would exclude locations without onsite staff licensed to sell non-deposit

products.

Final rule

The FDIC is finalizing the proposed requirement to display non-deposit signs

when both insured deposits and non-deposit products are offered within the IDI’s

premises. The final rule’s non-deposit sign requirement applies to both an IDI’s places of

business where deposits are received at teller windows or stations and an IDI’s places of

business where deposits are received in areas other than teller windows or stations (e.g.,

café-style locations). Under the final rule an IDI generally must physically segregate the

areas where non-deposit products are offered from areas where insured deposits are

usually and normally accepted, and display a sign in the non-deposit areas indicating that

non-deposit products: are not insured by the FDIC; are not deposits; and may lose

value.27 An IDI is required to continuously, clearly, and conspicuously display this non-

deposit sign; however, the final rule does not include specific design or size

requirements. To minimize the potential for consumer confusion, the final rule prohibits

display of non-deposit signs in close proximity to the official FDIC sign.

Non-deposit product definition

Through the proposed rule, the FDIC intended to provide further clarity on the

types of products that would constitute non-deposit products

the final rule does not include specific design or size

requirements. To minimize the potential for consumer confusion, the final rule prohibits

display of non-deposit signs in close proximity to the official FDIC sign.

Non-deposit product definition

Through the proposed rule, the FDIC intended to provide further clarity on the

types of products that would constitute non-deposit products. In response to comments

related to the non-deposit definition, the FDIC acknowledges that the proposed

27 As noted above, this requirement is intended to be generally consistent with longstanding interagency

guidance on the retail sale of non-deposit investment products that many institutions already follow and

thus should be familiar to many consumers.

23

definition, as written, could be read as excluding products that would otherwise constitute

a non-deposit product. Accordingly, the final rule generally retains the current non-

deposit definition with minor changes, discussed in further detail below.

The final rule defines a non-deposit product as: “[A]ny product that is not a

‘deposit’, including, but not limited to: insurance products, annuities, mutual funds,

securities, and crypto-assets. For purposes of this definition, credit products and safe

deposit box services are not non-deposit products.”28

The definition under the final rule provides a non-exclusive list of general

examples of the types of products that constitute non-deposit products that is consistent

with the long-standing definition, updated to include “crypto-assets.”29 However, the

FDIC agrees with a commenter that safe deposit boxes should not be included in the

definition for purposes of requiring display of the non-deposit sign under part 328,

Subpart A, and has revised the definition under the final rule to clarify the treatment of

safe deposit boxes.30 Banks have a longstanding history of providing safe deposit box

services to consumers to store valuables in a pri

FDIC agrees with a commenter that safe deposit boxes should not be included in the

definition for purposes of requiring display of the non-deposit sign under part 328,

Subpart A, and has revised the definition under the final rule to clarify the treatment of

safe deposit boxes.30 Banks have a longstanding history of providing safe deposit box

services to consumers to store valuables in a private, secure section of the bank.

Accordingly, IDIs are not required to display the non-deposit sign in areas where IDIs

provide safe deposit boxes and offer no other non-deposit products.

Design of non-deposit sign

Consistent with the proposal, the final rule requires IDIs that offer both deposit

and non-deposit products at their physical premises to display a non-deposit sign in a

continuous, clear, and conspicuous manner with information indicating that non-deposit

28 Final 12 CFR §§ 328.1, 328.101.

29 See infra Crypto-Assets Section for further discussion.

30 For purposes of Part 328, Subpart B, the “non-deposit definition” includes safe deposit boxes.

24

products: are not insured by the FDIC; are not deposits; and may lose value. The FDIC is

not standardizing the design of the non-deposit sign as the FDIC believes the rule strikes

a proper balance in providing IDIs flexibility, but also helps prevent consumer confusion

by requiring signs informing consumers of the risks associated with non-deposit products.

With respect to the comment to use red circle-backslash over “FDIC” or “FDIC-insured,”

the FDIC views the suggestion as potentially confusing to consumers. With respect to

the recommendation that the FDIC set minimum standards for the sign such as a

minimum font size, the final rule, as proposed, requires that the sign be displayed in a

continuous, clear, and conspicuous manner

it products.

With respect to the comment to use red circle-backslash over “FDIC” or “FDIC-insured,”

the FDIC views the suggestion as potentially confusing to consumers. With respect to

the recommendation that the FDIC set minimum standards for the sign such as a

minimum font size, the final rule, as proposed, requires that the sign be displayed in a

continuous, clear, and conspicuous manner. As such, the FDIC believes this standard

will help mitigate potential concerns regarding minimum font sizes and standards to

ensure that consumers are able to view clearly the non-deposit sign. Accordingly, the

FDIC is not adopting this recommendation and is not standardizing the design of the non-

deposit sign.

Display of the non-deposit sign

Under the final rule, the FDIC requires IDIs that offer both insured deposits and

non-deposit products to clearly delineate and distinguish areas where activities related to

the sale of non-deposit products occur from the areas where insured deposit-taking

activities occur. The FDIC believes requiring display of the non-deposit sign in a

physically segregated area would more effectively mitigate the potential for consumer

confusion than a centralized disclosure as recommended by some commenters, as it

would better alert consumers when products are not insured. Further, given that the final

rule does not require standardization of the non-deposit sign and provides IDIs flexibility

regarding the design of the non-deposit sign, the FDIC believes that the approach taken in

vely mitigate the potential for consumer

confusion than a centralized disclosure as recommended by some commenters, as it

would better alert consumers when products are not insured. Further, given that the final

rule does not require standardization of the non-deposit sign and provides IDIs flexibility

regarding the design of the non-deposit sign, the FDIC believes that the approach taken in

25

the final rule is responsive to commenter concerns on flexibility.

With respect to comments noting concerns on the costs of segregating physical

signage across multiple locations and requesting further clarification on when separation

would be required, the non-deposit sign requirement is intended to be generally

consistent with practices described in the longstanding interagency guidance on the retail

sale of non-deposit investment products.31 As a result, the FDIC has added a provision to

the final rule, generally consistent with longstanding guidance, noting that in limited

situations in which physical considerations present challenges to offering non-deposit

products in a distinct area, institutions must take prudent and reasonable steps to

minimize customer confusion. This guidance has informed many institutions’ current

approaches, and thus should be familiar to many IDIs and consumers.

Consistent with the interagency guidance, the FDIC expects IDIs to minimize the

possibility of consumer confusion when delineating the areas where non-deposit activities

take place from areas where insured deposit-taking activities occur. The FDIC intends

for the delineation requirement to include some flexibility, depending on the

circumstances. For example, IDIs could conduct non-deposit related activity in separate

areas or in areas that are not in close proximity to where deposits are taken by using a

desk, cubicle, partitions, railings, planters, a separate room, or other indicator that the

area is distinct and separate from the deposit-taking area

lineation requirement to include some flexibility, depending on the

circumstances. For example, IDIs could conduct non-deposit related activity in separate

areas or in areas that are not in close proximity to where deposits are taken by using a

desk, cubicle, partitions, railings, planters, a separate room, or other indicator that the

area is distinct and separate from the deposit-taking area. In the limited situations where

IDIs experience challenges in physically segregating products, IDIs must take prudent

and reasonable steps to minimize consumer confusion, consistent with the regulation’s

31 See Interagency Statement on Retail Sales of Non-deposit Investment Products, FIL–9–94 (Feb. 17,

1994), available at: https://www.fdic.gov/news/financial-institution-letters/1994/fil9409.html.

26

requirements.

In response to the commenter requesting clarification on the term “offers” for

purposes of displaying the non-deposit sign under part 328, the FDIC interprets “offers”

to capture situations where customers are presented with or sold non-deposit products

within an IDI’s physical premises. This could include situations where personnel are not

physically present on the bank premises, but the IDI presents or sells non-deposit

products to consumers within the bank’s premises. As an example, non-deposit signs are

required in areas where the consumer is offered non-deposit products within an IDI’s

physical premises by personnel through an electronic communication device (e.g., an

interactive kiosk or tablet).

Relevance of non-deposit sign requirements to Interagency Statement of Policy

The federal banking agencies have previously issued guidance to IDIs they

supervise relating to the retail sale of non-deposit investment products.32 The FDIC’s

proposed rule stated that its non-deposit sign requirement was intended to be consistent

with the practices described in this longstanding interagency guidance

evance of non-deposit sign requirements to Interagency Statement of Policy

The federal banking agencies have previously issued guidance to IDIs they

supervise relating to the retail sale of non-deposit investment products.32 The FDIC’s

proposed rule stated that its non-deposit sign requirement was intended to be consistent

with the practices described in this longstanding interagency guidance. Specifically, the

proposed rule’s non-deposit sign requirements were similar to disclosures related to sales

of non-deposit products described in the interagency guidance.

Use of Electronic Media or Varied Signs to Satisfy Official Sign and Non-deposit Sign

Requirements on IDIs’ Premises

Proposed Rule

Under the proposed rule, IDIs would have had the option to display the official

sign and non-deposit sign through the use of electronic media. The proposed rule also

32 Id.

27

would retain certain provisions of existing regulations that provide IDIs with flexibility in

displaying the official sign. Under the proposal, IDIs would have the option to display

the official sign in locations on the premises other than those required under the rule,

except for in areas where non-deposit products are offered. For locations where display

of the official sign is required, IDIs could choose to display signs that vary from the

official sign in size, color, or material, provided that the sign is no smaller than the

official sign, has the same color for the text and graphics, and includes the same content.

Discussion of Comments

Commenters supported the proposed option to use electronic media to display the

official sign and non-deposit sign. One commenter recommended that the FDIC produce

educational, captioned consumer videos to be displayed on digital signage within an

IDI’s lobby.

Final Rule

The final rule adopts the proposal to provide IDIs the flexibility to utilize

electronic media to satisfy sign requirements on an IDI’s premises

proposed option to use electronic media to display the

official sign and non-deposit sign. One commenter recommended that the FDIC produce

educational, captioned consumer videos to be displayed on digital signage within an

IDI’s lobby.

Final Rule

The final rule adopts the proposal to provide IDIs the flexibility to utilize

electronic media to satisfy sign requirements on an IDI’s premises. This provision

allowing IDIs to use electronic signs applies to both display of the official sign and non-

deposit signage, where required, and would similarly be subject to the continuous, clear,

and conspicuous display standard. Accordingly, a rotating display will not satisfy the

“continuous” requirement applicable to the display of official sign and non-deposit sign.

The final rule also retains certain provisions of current regulations that provide

IDIs with flexibility in displaying the official sign. IDIs have the option to display the

official sign in locations on the premises other than those required under the rule, except

for in areas where non-deposit products are offered. For locations where display of the

28

official sign is required, IDIs may choose to display signs that vary from the official sign

in size, color, or material, provided that the sign is no smaller than the official sign, has

the same color for the text and graphics, and includes the same content.

Under the final rule, the FDIC will not require IDIs to display FDIC-produced

videos within their physical premises. The FDIC is, however, undertaking several efforts

to educate consumers regarding deposit insurance and the role of the FDIC, including a

public awareness campaign on deposit insurance launched in October 2023.33

3

r for the text and graphics, and includes the same content.

Under the final rule, the FDIC will not require IDIs to display FDIC-produced

videos within their physical premises. The FDIC is, however, undertaking several efforts

to educate consumers regarding deposit insurance and the role of the FDIC, including a

public awareness campaign on deposit insurance launched in October 2023.33

3. Sign Requirements for Digital Deposit-Taking Channels

The final rule will facilitate banks providing consumers with clear, consistent, and

accurate digital disclosures to promote consumers’ understanding of when they are

interacting with an IDI and when their funds are protected by the FDIC’s deposit

insurance coverage. At the same time, the FDIC intends to permit some flexibility for

IDIs with respect to digital sign requirements. As such, the FDIC is finalizing sign

requirements related to IDI digital channels, with some changes and clarifications, as

described below.

a. FDIC Official Digital Sign

Proposed Rule

Under the proposal, an IDI would have been required to clearly, continuously, and

conspicuously display a newly established digital sign on the IDI’s homepage, landing

and login pages or screens, and transactional pages or screens involving deposits, to the

extent applicable. The proposal further provided that a digital sign displayed in a

continuous manner, near the top of the relevant page or screen in close proximity to the

33 FDIC’s national consumer campaign (“Know Your Risk. Protect Your Money”), available at:

https://www.fdic.gov/news/campaigns/know-your-risk/index.html.

deposits, to the

extent applicable. The proposal further provided that a digital sign displayed in a

continuous manner, near the top of the relevant page or screen in close proximity to the

33 FDIC’s national consumer campaign (“Know Your Risk. Protect Your Money”), available at:

https://www.fdic.gov/news/campaigns/know-your-risk/index.html.

29

IDI’s name, would be considered “clear and conspicuous.” The proposed digital sign

was intended to visually communicate to consumers that they are conducting business

with an IDI rather than a non-bank. The proposal provided that the FDIC expected the

digital sign to be an abbreviated version of the official sign and that it would prominently

bear the name of the FDIC and the statement that insured deposits are backed by the full

faith and credit of the U.S. Government.

Discussion of Comments

Some commenters raised concerns that the proposed changes in digital signage

design and placement were overly prescriptive and may be difficult to implement due to

technological and budgetary limits. However, other commenters supported the proposed

requirement, noting the importance of ensuring that bank customers are made fully aware

of situations where deposit insurance is present and is separate and distinct from product

offerings that do not include deposit insurance.

With respect to the placement of the proposed digital sign on the IDI’s homepage,

landing and login pages or screens, one commenter offered that home pages and landing

pages are not the primary point of interaction between banks and customers, noting that

home pages are generally used for marketing, not customer transactions. As such, the

commenter believed only pages with transactional capacity should be subject to the

proposed signage requirement

on the IDI’s homepage,

landing and login pages or screens, one commenter offered that home pages and landing

pages are not the primary point of interaction between banks and customers, noting that

home pages are generally used for marketing, not customer transactions. As such, the

commenter believed only pages with transactional capacity should be subject to the

proposed signage requirement. Some commenters questioned the necessity of displaying

the same digital signage on each subsequent screen after a customer has logged in, and

thought that the rules were unclear regarding internal transfer screens between FDIC-

insured products after log-in. One comment noted that having the digital sign on login

and other pages could imply to customers that deposit insurance applies to all products on

30

the website.

Several commenters recommended that the FDIC adopt a more flexible approach

where banks could place the digital sign on the bank’s webpage. One commenter noted

that many websites use a basic template that carries through each successive webpage

and that template could contain the required statement. To allow for further flexibility in

implementation and compliance, a commenter suggested that the FDIC add a “reasonable

person test” when assessing the digital signage requirements in order to allow banks to

continue to innovate. Another commenter provided that there would be no significant

difference for a consumer in placing the FDIC official digital sign at the top of the page

in close proximity to the bank name, other than increased costs for the IDIs. Other

commenters supported the proposal to place the sign at the top of the screen to comply

with the clear and conspicuous requirement.

The FDIC notes that a specific question was asked as part of the NPR about the

design of the digital sign but no comments were received in response to this question

op of the page

in close proximity to the bank name, other than increased costs for the IDIs. Other

commenters supported the proposal to place the sign at the top of the screen to comply

with the clear and conspicuous requirement.

The FDIC notes that a specific question was asked as part of the NPR about the

design of the digital sign but no comments were received in response to this question.

Final Rule

After carefully considering the comments received, the FDIC is adopting this part

of the proposed rule as final and will require IDIs to display the FDIC official digital sign

“clearly and conspicuously” in a continuous manner, near the top of the relevant page or

screen, and in close proximity to the IDI’s name. The FDIC is finalizing a design for the

FDIC official digital sign that consists of “FDIC” along with the following text: “FDIC-

Insured- Backed by the full faith and credit of the U.S. Government.” Below is the design

for the FDIC official digital sign under 328.5:

31

The final rule establishes a clear standard to promote consistency in the use and

application of the FDIC official digital sign by IDIs. The rule specifies the color, size,

and font to establish an easily recognizable, consistent digital sign to convey the certainty

and confidence historically provided by the FDIC official sign at banks’ teller

windows. Recognizing the variability in the design and color of IDI websites, the final

rule also provides an alternative color if the specified colors, navy blue and black, would

not be legible against the background design colors of the IDI’s webpage or mobile

banking application.

The final rule requires “FDIC” in the FDIC official digital sign to be displayed

with a wordmark size of 37.36 x 15.74px in navy blue (hexadecimal color code

#003256), with “FDIC-Insured - Backed by the full faith and credit of the U.S.

Government” in Source Sans Pro Web font (regular 400 italic), 12.8px, displayed in

black (hexadecimal color code #000000) lettering

le

banking application.

The final rule requires “FDIC” in the FDIC official digital sign to be displayed

with a wordmark size of 37.36 x 15.74px in navy blue (hexadecimal color code

#003256), with “FDIC-Insured - Backed by the full faith and credit of the U.S.

Government” in Source Sans Pro Web font (regular 400 italic), 12.8px, displayed in

black (hexadecimal color code #000000) lettering. If the official FDIC digital sign in

these colors would be illegible due to the color of the background, the final rule requires

the “FDIC” and the one line of smaller type to the right of “FDIC” to both be displayed in

white (hexadecimal color code #FFFFFF).

The FDIC official digital sign aligns with the statutory provisions in Section 18 of

the FDI Act on the display of signage at each IDI’s principal place of business relating to

the insurability of deposits and, consistent with Section 18 of the FDI Act, the FDIC

official digital sign includes a statement that insured deposits are backed by the full faith

and credit of the U.S. Government. The FDIC appreciates the issues raised by

commenters with respect to the FDIC official digital sign, including supporting flexibility

32

and ensuring the new FDIC official digital sign does not cause depositor

confusion. Given the discussion above regarding the increased use of mobile banking, as

well as the FDIC’s interest in protecting consumers, the FDIC believes the requirement to

display the FDIC official digital sign will promote consumer confidence in the Nation’s

banking system and benefit IDIs by assisting consumers in more easily identifying IDI

websites.

The FDIC believes that the use of the FDIC official digital sign by IDIs will assist

consumers in better understanding when they are conducting business with an IDI and

when they are interacting with a non-bank entity. Seeing the FDIC official digital sign on

all IDI websites and mobile applications will promote awareness that consumers are

doing business with FDIC-insured institutions

s.

The FDIC believes that the use of the FDIC official digital sign by IDIs will assist

consumers in better understanding when they are conducting business with an IDI and

when they are interacting with a non-bank entity. Seeing the FDIC official digital sign on

all IDI websites and mobile applications will promote awareness that consumers are

doing business with FDIC-insured institutions. Display of the FDIC official digital sign

by any non-bank third party would improperly imply that the non-bank is FDIC-insured

and would constitute a misrepresentation under part 328 subpart B.

The FDIC official digital sign must be displayed on the (1) initial or homepage of

the website or application, (2) landing or login pages, and (3) pages where the customer

may transact with deposits. For example, the FDIC official digital sign should be

displayed where an IDI’s mobile application allows customers to deposit checks

remotely, because this electronic space is in effect a digital teller window.

In response to comments related to technical issues and potential costs, the FDIC

recognizes the commenters’ concerns. But several comments also highlighted the

importance and value of clear and conspicuous signage to prevent consumer

confusion. The FDIC believes that the benefits of the FDIC official digital sign outweigh

the concerns about costs. To alleviate those concerns the FDIC is reviewing options to

ents related to technical issues and potential costs, the FDIC

recognizes the commenters’ concerns. But several comments also highlighted the

importance and value of clear and conspicuous signage to prevent consumer

confusion. The FDIC believes that the benefits of the FDIC official digital sign outweigh

the concerns about costs. To alleviate those concerns the FDIC is reviewing options to

33

provide IDIs with technical assistance or guidance to assist in implementing the FDIC

official digital sign requirements. The FDIC will also review options to provide an image

of the FDIC official digital sign to IDIs upon request at no charge, similar to the process

by which the FDIC provides banks with physical official signs.

b. Digital Display of Non-deposit Signage

Proposed Rule

Under the proposed rule, if a digital deposit-taking channel offers access to

deposits, as well as non-deposit products, IDIs would have been required to clearly,

continuously and conspicuously display a non-deposit sign indicating that the non-deposit

products: are not insured by the FDIC; are not deposits; and may lose value.

To satisfy this proposed requirement, the proposed rule would have required the

continuous display of the non-deposit sign (referred to as the “static” non-deposit sign)

on each IDI page relating to non-deposit products and prohibit displaying the non-deposit

sign in close proximity to the FDIC official digital sign. The FDIC would expect the

non-deposit signage to be in a prominent place, in an appropriate size, and displayed in a

continuous manner for any consumer accessing the page to notice. The proposal

provided, however, that institutions would have flexibility in the way they market non-

deposit products and did not specify design or size requirements for this non-deposit

sign

ficial digital sign. The FDIC would expect the

non-deposit signage to be in a prominent place, in an appropriate size, and displayed in a

continuous manner for any consumer accessing the page to notice. The proposal

provided, however, that institutions would have flexibility in the way they market non-

deposit products and did not specify design or size requirements for this non-deposit

sign.

In addition, under the proposed rule, IDIs would have been required to display

this non-deposit sign via a “one-time” notification when consumers initially access a page

related to non-deposit products (referred to as the one-time notification). The notification

would have provided an initial, prominent display of the non-deposit information to alert

34

consumers that they are dealing with non-deposit products that are not covered by FDIC

insurance. Moreover, consumers would need to take action to dismiss the notification

before accessing the relevant page or screen.

Discussion of Comments

Commenters generally recommended that the FDIC consider the costs related to

implementing the digital signage requirements for IDIs and to ensure that the

requirements are not overly burdensome for consumers and the industry.

More specifically, several commenters raised concerns that the increased digital

signage requirements would increase costs for banks without countervailing benefits for

consumers. While agreeing with the sentiment behind the proposed pop-up requirement,

two commenters noted that creating pop-ups can be operationally complex and may be

burdensome for smaller institutions to implement. Similarly, another commenter raised

technical concerns and suggested a reduction of the repetitive disclosures.

One commenter recommended that the FDIC only finalize a requirement for non-

deposit disclosures to be included statically on the applicable pages, and not require

affirmative consumer action regarding such disclosures

ex and may be

burdensome for smaller institutions to implement. Similarly, another commenter raised

technical concerns and suggested a reduction of the repetitive disclosures.

One commenter recommended that the FDIC only finalize a requirement for non-

deposit disclosures to be included statically on the applicable pages, and not require

affirmative consumer action regarding such disclosures.

Some commenters also stated that the proposed digital signage requirements

could lead to customer confusion and create a suboptimal customer

experience. Relatedly, another commenter stated that the proposed digital pop-up

message could degrade the customer experience and may cause difficulties for screen

readers used by disabled customers.

One commenter expressed appreciation about the ability of “pop-ups”,

“speedbumps”, or “overlays” to notify consumers of non-deposit products and ensure that

35

they remain properly informed. However, the commenter also asserted that to reflect the

various business models, products, and services, as well as adequately respect the

importance of a consumer’s experience in the increasingly competitive online financial

services market, the FDIC should allow banks to work with their non-bank partners to

ensure proper disclosure and ensure that these disclosures are properly applied to the

various online platforms and consumer experiences.

Several commenters supported the proposed requirements, noting that it would be

beneficial for customers to know a given entity’s or product’s insured status. One

commenter advocated for the FDIC to require IDIs to explicitly mark every financial

product as either insured or non-insured and advocated for a more comprehensive

disclosure statement

us online platforms and consumer experiences.

Several commenters supported the proposed requirements, noting that it would be

beneficial for customers to know a given entity’s or product’s insured status. One

commenter advocated for the FDIC to require IDIs to explicitly mark every financial

product as either insured or non-insured and advocated for a more comprehensive

disclosure statement.

Non-Deposit Digital Signage in Final Rule: Requirements When Non-Deposit Products

and Deposit Products are Offered Through Same Digital Deposit-Taking Channel

After consideration of the comments responding to the proposed non-deposit

digital signage requirements, the FDIC is finalizing certain aspects of the proposal and

modifying other aspects as described below.

The FDIC is finalizing the requirement for IDIs to clearly and conspicuously

display the “static” non-deposit signage on its digital deposit-taking channels. More

specifically, if an IDI’s digital deposit-taking channel offers access to both deposits at the

IDI and non-deposit products, the IDI must clearly and conspicuously display34 signage

indicating that the non-deposit products: are not insured by the FDIC; are not deposits;

34 Some IDIs currently display non-deposit disclosures in small font near the bottom of web pages and

application screens. Consumers are unlikely to notice such disclosures and may mistakenly believe that

non-deposits products are covered by FDIC insurance. Such display of non-deposit disclosures would not

satisfy the clear, continuous, and conspicuous display requirement of the proposed rule.

4 Some IDIs currently display non-deposit disclosures in small font near the bottom of web pages and

application screens. Consumers are unlikely to notice such disclosures and may mistakenly believe that

non-deposits products are covered by FDIC insurance. Such display of non-deposit disclosures would not

satisfy the clear, continuous, and conspicuous display requirement of the proposed rule.

36

and may lose value. This signage must be displayed on each IDI page relating to non-

deposit products and may not be displayed in close proximity to the FDIC digital sign.

The static non-deposit language described above will provide an important disclosure

aimed at addressing potential customer confusion regarding the insured status of

particular products offered by IDIs.

Separately, the FDIC acknowledges the commenters that discussed the one-time

non-deposit notification requirement increasing costs, being operationally complex, and

creating a suboptimal customer experience. The FDIC has concluded that having two

separate disclosures relating to non-deposit products on an IDI’s digital channel – the

“static” signage and the one-time notification – are unnecessary. One such disclosure

will sufficiently inform consumers and mitigate risks. As such, and in response to

commenter concerns, the FDIC is only retaining a part of the proposed one-time

notification requirement and is narrowing the scope for when the one-time notification is

provided.

Under the final rule, IDIs will only be required to display a one-time notification

when a bank customer accesses non-deposit products from a non-bank third party via an

IDI’s digital deposit-taking channel such as through a hyperlink (or similar weblinking

feature)

of the proposed one-time

notification requirement and is narrowing the scope for when the one-time notification is

provided.

Under the final rule, IDIs will only be required to display a one-time notification

when a bank customer accesses non-deposit products from a non-bank third party via an

IDI’s digital deposit-taking channel such as through a hyperlink (or similar weblinking

feature). For example, if an IDI’s digital channel offers a third party’s securities product

that requires the bank customer to leave the IDI’s website and access the securities

product on the third party’s website, then the IDI will be required to provide the bank

customer with a “one time” notification before the customer leaves the IDI’s digital

channel.

Moreover, under the final rule, the “one time” notification requirement will not

37

apply broadly to all consumers accessing the IDI’s website; instead, it will only apply to

bank customers that have logged into their respective account at a particular IDI website.

The “one time” notification will be required per web session, which is the period of

interaction between a bank customer and the IDI’s digital channel, starting when the

customer logs in and ending when the customer logs off.

Consistent with the proposal, the “one time” notification must be clearly and

conspicuously displayed and indicate that the non-deposit products: are not insured by the

FDIC; are not deposits; and may lose value. The one-time notification could include, for

example, an IDI using a “pop-up”, “speedbump”, or “overlay” that displays a notification

to the customer that the customer must dismiss before accessing the content related to

non-deposit products on the third party’s website

sly displayed and indicate that the non-deposit products: are not insured by the

FDIC; are not deposits; and may lose value. The one-time notification could include, for

example, an IDI using a “pop-up”, “speedbump”, or “overlay” that displays a notification

to the customer that the customer must dismiss before accessing the content related to

non-deposit products on the third party’s website.

Bank customers, who log in to their bank’s website and can access non-deposit

products through their IDI’s deposit-taking digital channel, may click on a hyperlink that

takes them to an IDI’s non-deposit page or click on a hyperlink that, unbeknownst to the

customer, causes them to leave the bank’s website to access non-deposit products offered

or presented by a third party. From the FDIC’s perspective, this raises two areas of

elevated risk regarding customer confusion and potential harm because a bank customer

is moving: (a) from an IDI to a non-bank; and (b) from an FDIC-insured deposit area to a

non-deposit area. Further, bank customers that are accessing the third party’s website

will not have the same benefit of the “static” non-deposit signage that will be available on

IDI digital channels.

As described above, one commenter recommended that the FDIC allow banks to

work with their non-bank partners to ensure proper disclosure and ensure that these

38

disclosures are properly applied to the various online platforms and consumer

experiences. Given that certain non-bank third parties may offer both deposit products

through a bank partner and non-deposit products on its website, IDIs will have discretion

to provide customers with additional disclosure information as part of its one-time

notification related to products offered by the non-bank third party, which may further

minimize customer confusion

orms and consumer

experiences. Given that certain non-bank third parties may offer both deposit products

through a bank partner and non-deposit products on its website, IDIs will have discretion

to provide customers with additional disclosure information as part of its one-time

notification related to products offered by the non-bank third party, which may further

minimize customer confusion.

The final rule’s narrower, less burdensome, one-time non-deposit notification

responds to several commenters’ concerns, while still mitigating the broader consumer

protection risks by enabling bank customers to better understand when they are doing

business with an IDI and when their funds are protected by the FDIC’s deposit insurance

coverage.

Regarding the comment about digital pop-up disclosures causing issues for

disabled customers that use screen readers, the FDIC encourages IDIs to ensure that their

pop-up notifications can be as accessible to screen reader users as any other web content.

4. Automated Teller Machines and Similar Devices

Proposed Rule

The FDIC proposed amendments to update § 328.4 signage requirements for

IDIs’ ATMs and other remote electronic facilities that receive deposits. The FDIC

sought to ensure that depositors receive necessary disclosures regarding deposit insurance

as banks continue to devise new ways to provide services to their customers. The

proposed rule intended to capture banking kiosks and other devices currently defined as

“Remote Service Facilities”35 that receive deposits. This section of the proposed rule was

35 “Remote Service Facility” includes any automated teller machine, cash dispensing machine, point-of-sale

terminal, or other remote electronic facility where deposits are received. 12 CFR 328.2(a)(1)(ii).

g kiosks and other devices currently defined as

“Remote Service Facilities”35 that receive deposits. This section of the proposed rule was

35 “Remote Service Facility” includes any automated teller machine, cash dispensing machine, point-of-sale

terminal, or other remote electronic facility where deposits are received. 12 CFR 328.2(a)(1)(ii).

39

not intended to address online and mobile banking channels, which are considered

“digital deposit-taking channels.”

The proposed rule would have required electronic display of the FDIC official

digital sign on IDIs’ ATM and like devices. The proposed rule provided that the official

FDIC sign must be electronically displayed clearly and conspicuously. ATMs and like

devices would be required, at a minimum, to display the FDIC official digital sign on the

home page or screen and each transaction page or screen relating to deposits.

The proposed rule would have further required electronic non-deposit signs where

an IDI’s ATM or like device both receives deposits for an IDI and offers access to non-

deposit products.36 In this instance, the ATM or like device would be required to clearly,

continuously, and conspicuously display electronic disclosures indicating that non-

deposit products are not insured by the FDIC, are not deposits, and may lose value. The

proposed rule would have required the display of these disclosures on each transaction

page or screen relating to non-deposit products.

Discussion of Comments

Generally, commenters expressed concern over the difficulty or cost in

implementing the proposed signage requirements for ATMs. Some commenters noted

that costs will disproportionately affect community banks who rely on third-party

vendors that provide ATM operating software; one commenter noted that software

changes take time, and these vendors would be expected to prioritize large banks

ts

Generally, commenters expressed concern over the difficulty or cost in

implementing the proposed signage requirements for ATMs. Some commenters noted

that costs will disproportionately affect community banks who rely on third-party

vendors that provide ATM operating software; one commenter noted that software

changes take time, and these vendors would be expected to prioritize large banks.

Another commenter noted that a handful of third-party vendors are utilized by many

36 The FDIC would not view postage stamps sold at ATMs to require these disclosures.

40

banks, and the proposed changes would create supply bottlenecks as digital platforms are

individualized for each bank. Three commenters specifically requested additional time –

ranging from at least one year to up to 18 months – in order to comply with any new

requirements imposed for physical or software signs on ATMs or similar devices.

Relatedly, another commenter urged the FDIC to consider allowing banks to use a

physical sign at their ATMs instead of an electronic one.

A few comments sought clarity or expressed concern on the scope of the proposed

ATM signage requirements. One commenter requested that the FDIC clarify whether the

proposed ATM provision would only apply to ATMs and similar devices that receive

deposits, excluding facilities that only provide balance, transfer, or withdrawal

capabilities. Another commenter requested that the FDIC exclude Interactive Teller

Machines (ITMs) from the ATM and like devices requirements as the commenter

believed that ITMs do not have any transaction screens visible and do not perform bank

branch functions. One commenter requested that the FDIC clarify whether non-deposit

signage requirements apply to the owner of the ATM and not the depository bank, if they

are not the same.

Commenters representing consumer groups were supportive of the proposed rule

changes relating to ATMs and similar devices

ed that ITMs do not have any transaction screens visible and do not perform bank

branch functions. One commenter requested that the FDIC clarify whether non-deposit

signage requirements apply to the owner of the ATM and not the depository bank, if they

are not the same.

Commenters representing consumer groups were supportive of the proposed rule

changes relating to ATMs and similar devices. One commenter believed the proposed

rules were beneficial because consumers do not have the opportunity to seek clarification

from bank employees at an ATM, like they would at a bank or bank branch. One

commenter advocated for more stringent signage requirements for ATMs, recommending

that the FDIC require IDIs to display disclosures on each screen that references a deposit

or non-deposit product.

41

Final Rule

The FDIC has carefully considered these comments and is adopting certain parts

of the proposed ATM signage requirements, with changes discussed below. The FDIC

appreciates the comments and concerns provided regarding the costs of the proposed

requirements and a need for additional time and the impact of potential changes on

community banks who often rely on third parties to support operating and maintaining

ATMs. The FDIC believes that the benefits of the new ATM signage requirements

outweigh the potential costs; however, additional flexibility is warranted in certain

situations. The new ATM requirements under the final rule will provide clear

information to consumers as to when they are engaging with insured deposit products and

when they are engaging with non-deposit products.

For an IDI’s ATM or like device that receives deposits but does not offer access

to non-deposit products, the final rule provides flexibility to meet the signage

requirement by either (1) displaying the FDIC official digital sign on ATM screens as

described in 328.5, or (2) displaying the physical official sign by attaching or posting it to

the ATM as described in § 328.2

-deposit products.

For an IDI’s ATM or like device that receives deposits but does not offer access

to non-deposit products, the final rule provides flexibility to meet the signage

requirement by either (1) displaying the FDIC official digital sign on ATM screens as

described in 328.5, or (2) displaying the physical official sign by attaching or posting it to

the ATM as described in § 328.2. However, IDIs’ ATMs or like devices that accept

deposits and are put into service after January 1, 2025 must display the official digital

sign (with no option to satisfy the requirement through display of the physical official

sign). This approach provides IDIs with flexibility, consistent with some comments the

FDIC received, and provides additional time to make related system and process

revisions and updates.

For an IDI’s ATM or like device that both receives deposits and offers access to

non-deposit products, the final rule requires that such ATMs must: (a) display the official

42

digital sign clearly, continuously, and conspicuously on the home page or screen and on

each transaction page or screen relating to deposits; and (b) clearly, continuously, and

conspicuously indicate that non-deposit products are not insured by the FDIC, are not

deposits, and may lose value on each transaction page or screen relating to non-deposit

products by January 1, 2025. The FDIC believes that clear signs differentiating the

insured and uninsured products is important in this setting because customers often

interact with ATMs alone, including when bank branches are closed or in areas that are

isolated or where there are no bank branches. In such situations bank customers would

not have an opportunity to ask clarifying questions of a bank representative or for bank

staff to ensure that customers fully understand whether a product is covered by FDIC

deposit insurance

tting because customers often

interact with ATMs alone, including when bank branches are closed or in areas that are

isolated or where there are no bank branches. In such situations bank customers would

not have an opportunity to ask clarifying questions of a bank representative or for bank

staff to ensure that customers fully understand whether a product is covered by FDIC

deposit insurance.

The final rule also provides that degraded or defaced physical official signs would

not meet the “clearly, continuously, and conspicuously” standard. For example, an

official sign defaced such that portions are illegible would not “clearly” signal or notify

consumers that they are dealing with an FDIC-insured depository institution’s

ATM. However, if an ATM’s physical digital sign is, for example, slightly diminished,

minimally blemished, or superficially damaged, these circumstances would be considered

de minimis for the purposes of determining whether a physical official sign meets the

“clearly, continuously, and conspicuous” standard for the purposes of compliance with

the final rule.

In addition, the final rule includes specific design features of the digital official

sign, including specifics about colors, size, and font which should assist in

implementation. In response to the comments on the scope of the rule, the final rule’s

43

ATM provisions apply to an IDI’s automated teller machines or other remote electronic

facilities that receive deposits. If an IDI’s remote electronic facility receives deposits and

is labeled an ITM (instead of an ATM), the official sign requirements in part 328 apply;

however, if an ITM does not receive deposits, it is not subject to the rule.

In some cases, where there is a deposit-taking ATM or like device, the owner of

the ATM and the IDI may not be the same

electronic

facilities that receive deposits. If an IDI’s remote electronic facility receives deposits and

is labeled an ITM (instead of an ATM), the official sign requirements in part 328 apply;

however, if an ITM does not receive deposits, it is not subject to the rule.

In some cases, where there is a deposit-taking ATM or like device, the owner of

the ATM and the IDI may not be the same. As noted above, § 328.4 applies to “IDIs’

automated teller machines or like devices.” In determining whether an ATM or like

device is an IDI’s, the FDIC will consider circumstances such as the ATM or like

device’s location, branding, whether it is operated by the IDI, and other factors that

reasonably indicate it is an IDI’s ATM. Under the final rule, for such in-scope ATMs

and like devices, the official digital sign and non-deposit signage requirements under §

328.4 apply.

In response to the comment on recommending more stringent requirements, the

FDIC does not consider more stringent signage requirements as necessary to achieve its

policy goals. For certain in-scope ATMs, the signage requirements under the final rule

apply to each transaction page or screen for deposits and, if applicable, non-deposit

products.

5. Official Advertising Statement for IDIs

Proposed Rule

The FDIC proposed limited amendments to the advertisement statement

requirements applicable to IDIs. Specifically, the FDIC proposed to expand IDIs’

options for use of a short advertising statement to include the term “FDIC-insured.”

Currently, IDIs must include the official advertising statement in all

e, non-deposit

products.

5. Official Advertising Statement for IDIs

Proposed Rule

The FDIC proposed limited amendments to the advertisement statement

requirements applicable to IDIs. Specifically, the FDIC proposed to expand IDIs’

options for use of a short advertising statement to include the term “FDIC-insured.”

Currently, IDIs must include the official advertising statement in all

44

advertisements that promote deposit products.37 The term advertisement means a

commercial message in any medium that is designed to attract public attention or

patronage to a product or business.38 The FDIC views this definition to include

advertising published through social media channels.

The current regulation allows IDIs to use the short title “Member of FDIC”,

“Member FDIC”, or a reproduction of the symbol of the corporation (defined in §

328.2(b)). In addition to these options, to provide additional flexibility, the proposed rule

would allow the use of “FDIC-insured”.

The FDIC also proposed to make a technical correction to the reference to the

deposit insurance limit found in paragraph (d)(10) of the current regulation, which states

that “deposits or depositors are insured by the Federal Deposit Insurance Corporation to

at least $100,000 for each depositor.”39 As a technical correction, the proposed rule

would instead reference the standard maximum deposit insurance amount (currently

$250,000), as established by Congress.

Discussion of Comments

A comment letter submitted by several non-profit organizations opposed the

addition of the term “FDIC-insured” for use as a shortened form of the official

advertising statement and suggested that IDIs continue to use the shortened forms of the

advertising statement found in the existing regulation (“Member of FDIC” or “Member

FDIC”)

50,000), as established by Congress.

Discussion of Comments

A comment letter submitted by several non-profit organizations opposed the

addition of the term “FDIC-insured” for use as a shortened form of the official

advertising statement and suggested that IDIs continue to use the shortened forms of the

advertising statement found in the existing regulation (“Member of FDIC” or “Member

FDIC”). The commenters stated that when IDIs offer products that are not FDIC-insured,

their use of the term “FDIC-insured” could be misleading and poses risk of consumer

37 12 CFR 328.3(c).

38 12 CFR 328.3(a).

39 12 CFR 328.3(d)(10).

45

confusion. The commenters asserted that the purported benefit to IDIs of increased

flexibility is not worth this risk of increased consumer confusion.

Final Rule

The FDIC appreciates the concern about risk of consumer confusion stemming

from use of the term “FDIC-Insured.” However, the FDIC believes that restrictions on

usage of the advertising statement (including a shortened form) in connection with non-

deposit products sufficiently mitigate any risk of consumer confusion.

Specifically, IDIs are prohibited from using the official advertising statement in

any advertisement relating solely to non-deposit products. IDIs are also prohibited from

using the official advertising statement in any advertisement relating solely to hybrid

products, which are products that have both deposit product features and non-deposit

product features. IDIs may use the official advertising statement in advertisements

containing information about both insured deposit products and non-deposit or hybrid

products, but are required to clearly segregate the official advertising statement from any

portion of the advertisement that relates to the non-deposit products. These restrictions

are part of the existing regulation and were included in the proposed rule

the official advertising statement in advertisements

containing information about both insured deposit products and non-deposit or hybrid

products, but are required to clearly segregate the official advertising statement from any

portion of the advertisement that relates to the non-deposit products. These restrictions

are part of the existing regulation and were included in the proposed rule. The FDIC is

including these same restrictions in the final rule, meaning that consumers should not, for

example, see statements indicating that a particular IDI is “FDIC-Insured” made in

connection with advertisements related solely to non-deposit products.

The FDIC is finalizing the advertising statement provisions of the final rule as

proposed. Under the final rule, IDIs will have the option to use “FDIC-Insured” as a

short form of the official advertising statement to satisfy advertising statement

requirements. Subject to limited exceptions, IDIs are required to include the official

46

advertising statement in all advertisements that promote either deposit products and

services or non-specific banking products and services offered by the institution. The

advertising statement must be in a size and print to be clearly legible.

In addition, as noted in the proposed rule, the FDIC does not intend for the digital

sign requirement to overlap with the general advertising statement requirements that

apply to IDIs. For example, the advertising statement would not be required on web

pages where an IDI displays the digital official sign, such as a homepage. In these

situations, under section 328.6(d)(10), the advertising statement is unnecessary because

the inclusion of the digital official sign makes it clear that the IDI is insured by the FDIC.

However, IDIs remain responsible for complying with the official advertising statement

requirements for other qualifying advertisements, including those contained on other web

pages

uch as a homepage. In these

situations, under section 328.6(d)(10), the advertising statement is unnecessary because

the inclusion of the digital official sign makes it clear that the IDI is insured by the FDIC.

However, IDIs remain responsible for complying with the official advertising statement

requirements for other qualifying advertisements, including those contained on other web

pages.

As under existing regulations, the final rule provides that a non-English

equivalent of the official advertising statement may be used in any advertisement,

provided that the translation has the prior written approval of the FDIC. The FDIC is

also considering making available to the public approved translations of the official

advertising statement in several common languages on its website or through other means

in the future to support IDIs’ efforts to communicate with their non-English-speaking

customers.

6. Misrepresentations and Material Omissions by Any Person

Proposed Rule

Section 18(a)(4) of the FDI Act,40 and its implementing regulations in subpart B

40 See 12 U.S.C. 1828(a)(4).

47

to part 328,41 prohibit any person from misusing the name or logo of the FDIC, engaging

in false advertising, and making knowing misrepresentations about deposit insurance. In

the NPR, the FDIC stated that it may be beneficial to provide further clarity on the

application of the statutory prohibition on misrepresentations in specific situations where

consumers may be misled as to whether an entity is insured by the FDIC and the nature

and extent of deposit insurance coverage. The FDIC proposed to amend subpart B to

expressly address these situations, making clear when specific statements or omissions

constitute a misrepresentation under section 18(a)(4)

cation of the statutory prohibition on misrepresentations in specific situations where

consumers may be misled as to whether an entity is insured by the FDIC and the nature

and extent of deposit insurance coverage. The FDIC proposed to amend subpart B to

expressly address these situations, making clear when specific statements or omissions

constitute a misrepresentation under section 18(a)(4).

Use of the Official Advertising Statement or FDIC-Associated Terms or Images

Consumers have historically identified the use of the official advertising statement

(such as “Member FDIC”), FDIC-Associated Terms, or FDIC-Associated Images to

signify that they are dealing with an IDI and will receive the protection of FDIC deposit

insurance. The official advertising statement, FDIC-Associated Terms, and FDIC-

Associated Images have increasingly been used by non-banks that purport to deposit their

customers’ funds at IDIs. As discussed in the NPR, the FDIC believes that use of the

official advertisement, FDIC-Associated Terms, or FDIC-Associated Images in such

instances presents a high risk of confusing consumers as to whether they are dealing with

an IDI and whether deposit insurance applies to their funds.

To address this risk, the proposed rule would have amended § 328.102(a) and §

328.102(b) to clarify specific circumstances under which use of the official advertising

statement, FDIC-Associated Terms, or FDIC-Associated Images by a non-bank would

constitute a misrepresentation of insured status as it would inaccurately imply that the

41 See 12 CFR §§ 328.100 through 328.109.

ed rule would have amended § 328.102(a) and §

328.102(b) to clarify specific circumstances under which use of the official advertising

statement, FDIC-Associated Terms, or FDIC-Associated Images by a non-bank would

constitute a misrepresentation of insured status as it would inaccurately imply that the

41 See 12 CFR §§ 328.100 through 328.109.

48

non-bank is FDIC-insured. For example, under the proposed rule, a non-bank’s use of

the “Member FDIC” logo on its website or in its marketing materials would have been a

misrepresentation unless that logo is next to the name of one or more IDIs. The NPR also

stated that a non-bank’s use of either the FDIC official sign or the FDIC official digital

sign would be a misrepresentation if it inaccurately implies that the non-bank is insured

by the FDIC and backed by the full faith and credit of the U.S. Government. Similarly,

the NPR stated that a non-bank’s use of FDIC-Associated Terms in statements suggesting

that the non-bank is insured by the FDIC would constitute a misrepresentation.42

Failure to Disclose that a Person is a Non-Bank is a Material Omission When a

Statement is Made Regarding Deposit Insurance

Non-banks that purport to deposit their customers’ funds at IDIs sometimes make

statements regarding deposit insurance coverage for those funds. Absent additional

context, to the extent such statements suggest that FDIC deposit insurance will protect

consumers in the event of the non-bank’s insolvency, they likely misrepresent the insured

status of the non-bank. To minimize the risk of consumer confusion, the proposed rule

provided that if a non-bank makes statements regarding deposit insurance for its

customers, it is a material omission for the non-bank to fail to clearly and conspicuously

disclose that it is not itself an FDIC-insured institution and that the FDIC’s deposit

insurance coverage only protects against the failure of an FDIC-insured depository

institution

of consumer confusion, the proposed rule

provided that if a non-bank makes statements regarding deposit insurance for its

customers, it is a material omission for the non-bank to fail to clearly and conspicuously

disclose that it is not itself an FDIC-insured institution and that the FDIC’s deposit

insurance coverage only protects against the failure of an FDIC-insured depository

institution. In the NPR, the FDIC stated that this additional disclosure is necessary to

prevent consumers from misinterpreting a non-bank’s assertions regarding deposit

42 These examples are intended to be illustrative, rather than an exhaustive list of ways in which a non-bank

might misrepresent its insured status. Any use of the official advertising statement, FDIC-Associated

Terms, or FDIC-Associated Images that inaccurately states or implies that the non-bank is insured by the

FDIC will violate the final rule.

49

insurance coverage. The FDIC noted that some non-banks already include such language

on their websites, often identifying the partner IDI through which banking services are

provided.43 The proposed rule did not prescribe specific disclosure language; however, it

explained that a statement that a person is not an FDIC-insured bank and deposit

insurance covers the failure of an insured bank would be considered a clear statement for

purposes of this provision. The proposed rule aimed to give non-banks that wish to make

statements regarding deposit insurance coverage some flexibility in how they

communicate the required information.

Failure to State that Non-Deposit Products are Not Insured by the FDIC is a Material

Omission When a Statement is Made Regarding Deposit Insurance

The FDIC’s experience suggests that deposits and non-deposit products are

increasingly being offered to consumers in ways that fail to distinguish which products

are insured by the FDIC

lexibility in how they

communicate the required information.

Failure to State that Non-Deposit Products are Not Insured by the FDIC is a Material

Omission When a Statement is Made Regarding Deposit Insurance

The FDIC’s experience suggests that deposits and non-deposit products are

increasingly being offered to consumers in ways that fail to distinguish which products

are insured by the FDIC. For instance, marketing materials might emphasize the deposit

insurance protection that applies to some products while failing to make clear that not all

of the products offered are FDIC-insured. In other instances, firms have represented to

their customers that non-deposit products are eligible for deposit insurance coverage,

which has led consumers to believe, mistakenly, that their money or investments are

protected by deposit insurance. In the NPR, the FDIC stated it believes that where banks

or non-banks make statements regarding deposit insurance in a context where deposits

and non-deposit products are involved, additional information is necessary to ensure that

consumers understand which products are subject to deposit insurance. To prevent

consumer confusion, the proposed rule provided that if a person makes statements

43 For example, “ABC Co. is not an FDIC-insured depository institution; banking services provided by

XYZ Bank, Member FDIC.”

50

regarding deposit insurance in a context that involves both deposits and non-deposit

products, it is a material omission to fail to disclose that non-deposit products are not

insured by the FDIC, are not deposits, and may lose value

43 For example, “ABC Co. is not an FDIC-insured depository institution; banking services provided by

XYZ Bank, Member FDIC.”

50

regarding deposit insurance in a context that involves both deposits and non-deposit

products, it is a material omission to fail to disclose that non-deposit products are not

insured by the FDIC, are not deposits, and may lose value. For example, under the

proposed rule, if a non-bank’s website offered customers the option to have their funds

deposited at an IDI and protected by deposit insurance or invested in non-deposit

products, it would be a material omission if the non-bank’s website failed to state that the

non-deposit products are not insured by the FDIC, are not deposits, and may lose value.

Failure to State that Requirements Apply to Pass-Through Deposit Insurance

The FDIC has a long history of providing “pass-through” deposit insurance

coverage, meaning that deposits placed at an IDI by a third party on behalf of one or

more owners are insured as if deposited directly at the IDI by the owner(s). Pass-through

insurance allows each owner of the funds in such an arrangement to be separately insured

up to the statutory deposit insurance limit, currently $250,000, even if the total deposits

of all owners (in the aggregate) exceeds the $250,000 limit. Pass-through insurance only

applies, however, if certain regulatory requirements are satisfied.44

Arrangements that rely on pass-through insurance have become increasingly

common, with non-banks often claiming to provide the protection of pass-through deposit

insurance for consumers’ funds. Such representations, however, may be inaccurate,

mislead consumers, and fail to apprise them of the risk they face in the event that the

44 See 12 CFR 330.5, 330.7. For pass-through deposit insurance to apply, a consumer’s funds must first be

on deposit at an IDI

provide the protection of pass-through deposit

insurance for consumers’ funds. Such representations, however, may be inaccurate,

mislead consumers, and fail to apprise them of the risk they face in the event that the

44 See 12 CFR 330.5, 330.7. For pass-through deposit insurance to apply, a consumer’s funds must first be

on deposit at an IDI. In addition: (1) the deposit account records of the IDI must disclose a basis for pass-

through coverage, such as a custodial or agency relationship; (2) the identities and interests of the actual

owners of the funds must be ascertainable either from the records of the IDI or records maintained in good

faith and in the regular course of business by another party; and (3) the relationship that provides the basis

for pass-through deposit insurance coverage must be genuine, with the deposited funds actually owned by

the named owners. Additional requirements apply to arrangements involving multiple levels of

relationships.

51

pass-through deposit insurance requirements have not been satisfied. If the pass-through

requirements are not met, consumers’ funds may not be fully insured in the event the IDI

where their funds have been deposited were to fail. In the NPR, the FDIC would have

required that parties that make statements regarding the application of pass-through

deposit insurance make additional disclosure to promote awareness of this risk.

The proposed rule provided that if a person makes statements regarding pass-

through deposit insurance for its customers’ funds, it is a material omission to fail to

clearly and conspicuously disclose that certain conditions must be satisfied for pass-

through deposit insurance coverage to apply. The proposed rule would not require a

person making a statement regarding pass-through deposit insurance to list the specific

conditions that must be satisfied; simply referencing that conditions must be satisfied

would be sufficient under the proposed rule

il to

clearly and conspicuously disclose that certain conditions must be satisfied for pass-

through deposit insurance coverage to apply. The proposed rule would not require a

person making a statement regarding pass-through deposit insurance to list the specific

conditions that must be satisfied; simply referencing that conditions must be satisfied

would be sufficient under the proposed rule. The proposed rule also did not prescribe

specific disclosure language, providing flexibility in how parties may wish to express the

required information. For example, under the proposed rule, if a website for a financial

product were to state that consumers’ funds are eligible for pass-through deposit

insurance, it would be a material omission to fail to clearly and conspicuously state that

certain conditions must be satisfied in order for pass-through insurance to apply.

Discussion of Comments

Some commenters recommended that the rule require entities to disclose certain

information that they believed was necessary to avoid material omissions when making

statements about deposit insurance. For example, one commenter suggested that the

FDIC impose several specific requirements, presumptions, and enforcement practices on

any advertising relating to digital assets. Another commenter suggested that the FDIC

52

prohibit non-banks from using the words “banking” and “bank account” to describe their

products or services offered, and that a non-bank’s failure to comply should constitute a

material omission.

With respect to statements referencing deposit and non-deposit products, one

commenter suggested that the FDIC should make clear that comparing an uninsured

financial product to an insured one without clearly and conspicuously noting the

difference in insurance status is a misrepresentation. Another commenter similarly

suggested that it would be a material omission for a non-bank to fail to disclose that its

non-deposit products are not FDIC-insured

sit products, one

commenter suggested that the FDIC should make clear that comparing an uninsured

financial product to an insured one without clearly and conspicuously noting the

difference in insurance status is a misrepresentation. Another commenter similarly

suggested that it would be a material omission for a non-bank to fail to disclose that its

non-deposit products are not FDIC-insured.

In connection with the proposed pass-through provision, one commenter

suggested that it should be a material omission for entities that are not FDIC-insured to

advertise pass-through deposit insurance without setting forth all the conditions necessary

to receive such coverage. Another commenter suggested that requiring a clear and

conspicuous disclosure that certain conditions must be satisfied for pass-through

insurance, without more, could lead a depositor to wonder what those conditions might

be and question whether pass-through claims will be honored.

One commenter requested confirmation as to whether hyperlinking would be

permissible for the required disclosures. Specifically, the commenter requested

confirmation that a non-bank entity placing deposits through a deposit network would

still be permitted to hyperlink to the list of network banks to satisfy this provision under

the new rule, as previously stated in the preamble to the 2022 final rule.45 The same

commenter also requested confirmation that a non-bank would be permitted to hyperlink

45 See 87 FR 33415, 33418 (June 2, 2022).

sits through a deposit network would

still be permitted to hyperlink to the list of network banks to satisfy this provision under

the new rule, as previously stated in the preamble to the 2022 final rule.45 The same

commenter also requested confirmation that a non-bank would be permitted to hyperlink

45 See 87 FR 33415, 33418 (June 2, 2022).

53

to required disclosures that a non-bank is not a bank and that pass-through insurance

coverage is subject to conditions.

Final Rule

As generally provided in the proposal, with specific changes noted below, the

FDIC is amending subpart B to expressly address additional examples that violate part

328, making clear when specific statements or omissions constitute a misrepresentation

under section 18(a)(4). Moreover, the FDIC reiterates that the specific examples set forth

in the final rule are part of a non-exhaustive list of conduct that violates part 328. The

FDIC has the authority to take action against conduct that constitutes a prohibited

misrepresentation about deposit insurance, regardless of whether it is among the non-

exhaustive list of examples included in the final rule.

The FDIC has been, and will continue to be, consistently proactive in enforcing

its requirements and taking appropriate action whenever it becomes aware of prohibited

conduct.

Use of the Official Advertising Statement or FDIC-Associated Terms or Images

The final rule adopts the proposed amendments to § 328.102 to clarify specific

circumstances under which use of the official advertising statement, FDIC-Associated

Terms, or FDIC-Associated Images by a non-bank would constitute a misrepresentation

of insured status. In a technical change from the proposal, the final rule corrects an

amendment to § 328.102

t or FDIC-Associated Terms or Images

The final rule adopts the proposed amendments to § 328.102 to clarify specific

circumstances under which use of the official advertising statement, FDIC-Associated

Terms, or FDIC-Associated Images by a non-bank would constitute a misrepresentation

of insured status. In a technical change from the proposal, the final rule corrects an

amendment to § 328.102. Proposed § 328.102(b)(4)(i) stated, without limitation, a false

or misleading representation is deemed to be material if it states, suggests, or implies that,

“A person or Uninsured Financial Products are insured or guaranteed by the FDIC”. The

final rule corrects the reference to “A person” to “A person other than Insured Depository

54

Institution” and moves this amendment to new § 328.102(b)(1)(iv).46

Failure to Disclose that a Person is a Non-Bank is a Material Omission When a

Statement is Made Regarding Deposit Insurance

The FDIC is adopting the proposal that if a non-bank makes statements regarding

deposit insurance for its customers, it is a material omission for the non-bank to fail to

clearly and conspicuously disclose that it is not itself an FDIC-insured institution and that

the FDIC’s deposit insurance coverage only protects against the failure of an FDIC-

insured depository institution. With respect to the comment on prohibiting non-banks

from using the words “banking” and “bank account,” the final rule’s amendments to

subpart B are limited to addressing misrepresentations concerning deposit insurance,

which is the focus of section 18(a)(4) of the FDI Act. A non-bank’s use of the terms

“bank” or “banking account” does not itself misrepresent deposit insurance status.

However, such usage may violate other laws, including state banking laws or laws that

address deceptive practices.

As stated above, the final rule makes clear that it is a misrepresentation for an

entity that is not insured by the FDIC to state, suggest, or imply that it is FDIC-insured

bank’s use of the terms

“bank” or “banking account” does not itself misrepresent deposit insurance status.

However, such usage may violate other laws, including state banking laws or laws that

address deceptive practices.

As stated above, the final rule makes clear that it is a misrepresentation for an

entity that is not insured by the FDIC to state, suggest, or imply that it is FDIC-insured.

Further, the final rule specifically notes that the FDIC considers it to be a material

omission for an entity that is not an IDI to make statements about deposit insurance

without clearly and conspicuously disclosing that it is not an IDI and that FDIC insurance

only covers the failure of IDIs. The FDIC concludes that these provisions adequately

address commenters’ concerns regarding situations where an entity that is not FDIC-

insured suggests that it is.

46 See final 12 CFR 328.102(b)(4)(iv).

55

Failure to State that Non-Deposit Products are Not Insured by the FDIC is a Material

Omission When a Statement is Made Regarding Deposit Insurance

The final rule adopts the proposal that, if a person makes statements regarding

deposit insurance in a context that involves both deposits and non-deposit products, it is a

material omission to fail to disclose that non-deposit products are not insured by the

FDIC, are not deposits, and may lose value, subject to the clarifications below. The

FDIC believes that the final rule addresses commenters’ concerns regarding

misrepresentations about uninsured financial products and non-deposit products as the

rule helps mitigate potential consumer confusion when deposit insurance statements are

made in the context of deposit and non-deposit products

y the

FDIC, are not deposits, and may lose value, subject to the clarifications below. The

FDIC believes that the final rule addresses commenters’ concerns regarding

misrepresentations about uninsured financial products and non-deposit products as the

rule helps mitigate potential consumer confusion when deposit insurance statements are

made in the context of deposit and non-deposit products. Under the final rule, if a non-

bank’s website offered customers the option to have their funds deposited at an IDI and

protected by deposit insurance or invested in non-deposit products in close proximity, it

is a material omission if the non-bank’s website failed to state that the non-deposit

products are not insured by the FDIC, are not deposits, and may lose value.

Non-bank digital wallets. The FDIC recognizes that certain non-banks offer

payment products that are not FDIC-insured that allow consumers to store, send, or

receive fiat money, for example U.S. dollars, electronically. While these products are not

insured by the FDIC and therefore are vulnerable to the risks related to the non-bank’s

insolvency, they do not otherwise fluctuate in value. Accordingly, the FDIC believes that

requiring non-banks to disclose to consumers that such products “may lose value” may

not be beneficial. As such, if a non-bank offers customers access to deposit products and

a digital wallet where funds placed in a digital wallet are not covered by FDIC deposit

insurance, it will not be a material omission for the non-bank entity to not include “may

lue. Accordingly, the FDIC believes that

requiring non-banks to disclose to consumers that such products “may lose value” may

not be beneficial. As such, if a non-bank offers customers access to deposit products and

a digital wallet where funds placed in a digital wallet are not covered by FDIC deposit

insurance, it will not be a material omission for the non-bank entity to not include “may

56

lose value” with respect to such digital wallet products. It will be a material omission for

the non-bank to fail to disclose that any such uninsured products are: “not insured by the

FDIC and are not deposits”. The FDIC believes that a disclosure that the product is not a

deposit and not FDIC-insured strikes a reasonable balance by providing consumers with

sufficient information if they utilize these digital wallet products from non-bank entities

that also offer deposit products. The FDIC also notes that if the non-bank offers other

non-deposit products as defined by part 328, including non-deposit products as part of its

digital wallet on its website, it must disclose that the non-deposit product “may lose

value” in addition to disclosing that the products are “not a deposit, not FDIC insured”.

Proximity. It has been the FDIC’s experience that it is more likely that a

consumer will be confused about the application of deposit insurance to non-deposit

products, when the deposit product is being offered in close proximity to the non-deposit

product by the non-bank. For example, the FDIC has seen that some non-banks provide

“mixed advertisements” where deposit products and non-deposit products are offered on

the same webpage or as part of a single social media post. As such, the FDIC believes

that such offerings, in close proximity, represent clear scenarios where it would be a

material omission for the entity to fail to disclose that the non-deposit product is not

insured by the FDIC, is not a deposit, and may lose value

ertisements” where deposit products and non-deposit products are offered on

the same webpage or as part of a single social media post. As such, the FDIC believes

that such offerings, in close proximity, represent clear scenarios where it would be a

material omission for the entity to fail to disclose that the non-deposit product is not

insured by the FDIC, is not a deposit, and may lose value.

Non-deposit products unrelated to financial or investment products. The intent of

this particular clarification in the final rule is to ensure that consumers understand when

deposit insurance applies, particularly when a non-bank is offering both deposits and

non-deposit products. From the FDIC’s experience, consumers are more likely to be

confused about the application of deposit insurance when a non-bank offers deposit

57

products and non-deposit products that are financial products subject to investment

risks. Services or products offered by a non-bank that are unrelated to financial or

investment products and physical goods are generally not the type of non-deposit product

that would confuse consumers about deposit insurance. While the FDIC generally would

not expect non-banks offering these types of non-deposit products to provide disclosures

that the non-deposit product is not insured by the FDIC, is not a deposit, and may lose

value, the non-bank is nevertheless prohibited from representing or implying that the

non-deposit products are insured or guaranteed by the FDIC.47

Failure to State that Requirements Apply to Pass-Through Deposit Insurance

The FDIC is finalizing the proposal that if a person makes statements regarding

pass-through deposit insurance for its customers’ funds, it is a material omission to fail to

clearly and conspicuously disclose that certain conditions must be satisfied for pass-

through deposit insurance coverage to apply

d by the FDIC.47

Failure to State that Requirements Apply to Pass-Through Deposit Insurance

The FDIC is finalizing the proposal that if a person makes statements regarding

pass-through deposit insurance for its customers’ funds, it is a material omission to fail to

clearly and conspicuously disclose that certain conditions must be satisfied for pass-

through deposit insurance coverage to apply. Under the final rule, a person making a

statement regarding pass-through deposit insurance is not required to list the specific

conditions that must be satisfied; simply referencing that conditions must be satisfied is

sufficient. The final rule also does not prescribe specific disclosure language, providing

flexibility as to how parties may express the required information.

With respect to the comments recommending that entities list all the conditions

necessary to receive pass-through coverage, the FDIC believes that the final rule strikes

an appropriate balance with making consumers aware of the risks they face without

inundating them with a technical recitation of the pass-through conditions. Further, such

technical information may be impracticable for some types of advertisements due to the

47 12 CFR 328.102(a).

58

amount of text required to adequately disclose the requirements. The FDIC believes that

the final rule’s approach reflects a better balance, as it puts consumers on notice that

pass-through insurance is not automatic or guaranteed and empowers them to raise

questions or concerns.

The FDIC remains concerned, however, that even with this notice, it is

challenging to consumers to assess the risks related to the likelihood of receiving pass-

through insurance given its technical legal requirements. In addition, consumers would

not have access to banks’ or non-banks’ records to directly confirm that applicable

conditions have been met

hem to raise

questions or concerns.

The FDIC remains concerned, however, that even with this notice, it is

challenging to consumers to assess the risks related to the likelihood of receiving pass-

through insurance given its technical legal requirements. In addition, consumers would

not have access to banks’ or non-banks’ records to directly confirm that applicable

conditions have been met. Given these circumstances, the FDIC is considering options

for conducting qualitative consumer testing of deposit insurance disclosure language,

including regarding pass-through coverage, to assess consumers’ understanding and

whether there are other disclosure language options that are more effective and beneficial

for consumers. In the event the FDIC identifies disclosure language through consumer

testing that would improve consumer understanding of the risks related to pass-through

coverage, the FDIC could consider options to promote use of the disclosure.

The FDIC is also considering whether additional public education efforts would

be valuable to help consumers understand the differences in deposit insurance coverage

when working with IDIs directly as compared to non-bank entities. Earlier this year, the

FDIC launched its “Know your Risk. Protect your Money.” national public awareness

campaign to help consumers better understand deposit insurance and how it protects their

money. This campaign complements the final rule’s intended purposes, including

helping consumers understand when they are interacting with an IDI and when their

funds are protected by the FDIC’s deposit insurance coverage.

FDIC launched its “Know your Risk. Protect your Money.” national public awareness

campaign to help consumers better understand deposit insurance and how it protects their

money. This campaign complements the final rule’s intended purposes, including

helping consumers understand when they are interacting with an IDI and when their

funds are protected by the FDIC’s deposit insurance coverage.

59

Hyperlinking to Material Information

In the NPR, the FDIC proposed to maintain the existing provision that it is a

material omission for a non-insured entity that advertises deposit insurance to fail to

identify the IDIs with which the representing party has a direct or indirect business

relationship for the placement of deposits and into which the consumers’ deposits may be

placed.48

As explained in the proposal, the FDIC is concerned that certain business

relationships between IDIs and non-banks may be confusing to consumers and proposed

to require clear disclosures that would better inform consumers as to when their funds are

protected by FDIC deposit insurance. The proposed rule made clear that it is a prohibited

misrepresentation to fail to clearly and conspicuously disclose material information

necessary to avoid a false statement, suggestion, or implication about deposit insurance.

After considering the comment received on hyperlinking to the list of network banks, the

FDIC is amending § 12 CFR 328.102(b)(5)(i) in the final rule to expressly state that it is a

material omission for a non-insured entity that advertises deposit insurance to fail to

clearly and conspicuously identify the IDIs with which the representing party has a direct

or indirect business relationship for the placement of deposits and into which the

consumers’ deposits may be placed.49 The addition of this language harmonizes this

provision with the other specific examples in the final rule and makes clear that

information about where funds may be placed must be clear and conspicuous

icuously identify the IDIs with which the representing party has a direct

or indirect business relationship for the placement of deposits and into which the

consumers’ deposits may be placed.49 The addition of this language harmonizes this

provision with the other specific examples in the final rule and makes clear that

information about where funds may be placed must be clear and conspicuous. To the

extent that a non-bank entity places deposits through a deposit network, it may satisfy

this requirement by clearly and conspicuously identifying the deposit network and each

48 See proposed 12 CFR 328.102(b)(5)(i).

49 See final 12 CFR 328.102(b)(5)(i) (emphasis added).

60

IDI in the deposit network or by providing a clear and conspicuous hyperlink to a current

list of all the IDIs that are part of such a network.

Further, the FDIC will evaluate the clear and conspicuous requirement in the

context of the statement the information is material to, including the information’s

proximity, placement, and prominence in relation to the statement. In particular, the

FDIC believes that Federal Trade Commission guidance provides helpful principles for

determining whether hyperlinks to the list of deposit network IDIs are sufficiently clear

and conspicuous.50

In response to the comment on hyperlinking to other disclosures, the FDIC

generally believes that hyperlinking to the required disclosures – that a non-bank is not an

FDIC-insured depository institution, the FDIC’s deposit insurance coverage only protects

against the failure of an FDIC-insured depository institution, and pass-through insurance

coverage is subject to conditions – would not satisfy the “clear and conspicuous”

standard in § 328.102(b)(5) under the final rule. Failure to include these disclosures with

statements regarding deposit insurance could result in consumer confusion as to whether

an entity is FDIC-insured and the extent of deposit insurance coverage.

7

sured depository institution, and pass-through insurance

coverage is subject to conditions – would not satisfy the “clear and conspicuous”

standard in § 328.102(b)(5) under the final rule. Failure to include these disclosures with

statements regarding deposit insurance could result in consumer confusion as to whether

an entity is FDIC-insured and the extent of deposit insurance coverage.

7. Policies and Procedures for IDIs

Proposed Rule

The FDIC proposed requirements for IDIs to establish written policies and

procedures to comply with part 328 that are commensurate with the nature, size,

complexity, scope, and potential risk of the deposit-taking activities of the institution. As

50 See Federal Trade Commission, .com Disclosures: How to Make Effective Disclosures in Digital

Advertising, available at: https://www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-

disclosures-information-about-online-advertising.pdf.

61

part of these policies and procedures, IDIs would also need to include, as appropriate,

provisions related to monitoring and evaluating activities of persons that provide deposit-

related services to the IDI or offer the IDI’s deposit-related products or services to other

parties.

a. Signs and Advertising Statement

The proposal provided that such policies and procedures could include, for

example, measures that an IDI would take to ensure compliance with the proposed sign

and advertising requirements when the IDI changes its advertising strategy or engages

with, or expands into, new physical or digital deposit-taking channels. For example, this

could include, if applicable, establishing procedures to ensure that the IDI’s technology

(e.g., websites and mobile applications) is capable of implementing the proposed signs

and advertisement statement requirements across all digital deposit-taking channels.

b

s its advertising strategy or engages

with, or expands into, new physical or digital deposit-taking channels. For example, this

could include, if applicable, establishing procedures to ensure that the IDI’s technology

(e.g., websites and mobile applications) is capable of implementing the proposed signs

and advertisement statement requirements across all digital deposit-taking channels.

b. Certain Third-Party Relationships and Misrepresentations

The proposal also provided that to the extent a third party has a business

relationship with, and is serving as a deposit-taking channel for, an IDI, sound risk

management would compel the IDI to be aware of the activities of the third party to

ensure that the availability of deposit insurance is not being misrepresented. As such, the

proposal would have required IDIs, as appropriate, to establish policies and procedures

that include provisions related to the deposit-related services that a third party provides to

the IDI or deposit-related products or services offered by the third party to other parties.

These policies and procedures would include, as appropriate, provisions related to

monitoring and evaluating whether such third parties are in compliance with subpart B.

c. Reservation of Authority

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The proposal reserved the FDIC’s authority to take appropriate actions, including

supervisory or enforcement actions, against any person that violates part 328. The

existence of adequate policies and procedures would not preclude the FDIC from taking

actions against IDIs or third parties to address violations.

Comments

Some commenters expressed concerns that the proposed policies and procedures

requirement was not aligned with existing interagency third-party risk management

guidance. In addition, commenters recommended excluding non-contractual

relationships from the scope of the rule and clarifying that the involvement of non-

marketing related deposit services does not automatically implicate the proposed rule

commenters expressed concerns that the proposed policies and procedures

requirement was not aligned with existing interagency third-party risk management

guidance. In addition, commenters recommended excluding non-contractual

relationships from the scope of the rule and clarifying that the involvement of non-

marketing related deposit services does not automatically implicate the proposed rule.

Other commenters requested the FDIC cover only third parties with a contractual

relationship with the IDI addressing the offering or sales of the IDI’s insured deposits,

and only relationships involving marketing and public dissemination of information on

FDIC deposit insurance. Another commenter requested that the FDIC exclude deposit

products traded in secondary markets, such as certificates of deposit, because IDIs have

no control over representations made to secondary market purchasers.

Final Rule

Under 12 CFR 328.8, the FDIC is finalizing the policies and procedures

requirement for IDIs as proposed. As part of the final rule, IDIs must establish and

maintain written policies and procedures to achieve compliance with part 328. Such

policies and procedures must be commensurate with the nature, size, complexity, scope,

and potential risk of the deposit-taking activities of the IDI and must include, as

appropriate, provisions related to monitoring and evaluating activities of persons that

63

provide deposit-related services to the IDI or offer the IDI’s deposit-related products or

services to other parties

t 328. Such

policies and procedures must be commensurate with the nature, size, complexity, scope,

and potential risk of the deposit-taking activities of the IDI and must include, as

appropriate, provisions related to monitoring and evaluating activities of persons that

63

provide deposit-related services to the IDI or offer the IDI’s deposit-related products or

services to other parties.

This new requirement is consistent with the Interagency Guidance on Third-Party

Relationships: Risk Management that was issued earlier this year.51 The interagency

guidance underscores that a banking organization’s use of third parties can increase its

risk, and that the use of third parties does not diminish or remove a banking

organization’s responsibility to perform all activities in a safe and sound manner and in

compliance with applicable laws and regulations, including those related to consumer

protection.

Here, the policies and procedures established and maintained by IDIs will

facilitate compliance with part 328, including by ensuring that appropriate monitoring is

conducted and evaluations are performed regarding activities of certain persons that

provide deposit-related services to IDIs or offer an IDI’s deposit products or services to

other parties. The policies and procedures will help ensure activities are conducted in

compliance with applicable laws and that IDIs are aware of whether certain third parties

are in violation of subpart B of part 328. Having these policies and procedures in place

will help mitigate the risks of consumer harm and confusion, consistent with the statutory

purpose underlying section 18(a) of the FDI Act and the FDIC’s mission to maintain and

promote public confidence in the banking system

ce with applicable laws and that IDIs are aware of whether certain third parties

are in violation of subpart B of part 328. Having these policies and procedures in place

will help mitigate the risks of consumer harm and confusion, consistent with the statutory

purpose underlying section 18(a) of the FDI Act and the FDIC’s mission to maintain and

promote public confidence in the banking system.

IDIs should include reasonable provisions regarding compliance with part 328 in

their policies and procedures, including addressing for example: the use of FDIC-

Associated Terms or FDIC-Associated Images by third parties in a manner that

51 See 88 FR 37920 (June 9, 2023).

64

inaccurately states or implies that a person other than an IDI is insured by FDIC;

statements made that represent or imply that an advertised product is insured by the FDIC

but fail to identify the IDI; and ensuring the marketing and advertising information or

materials presented or made available to prospective depositors by third parties do not

misrepresent the insurability of the IDI’s financial products. The FDIC expects that IDIs,

as appropriate, will implement, or enhance, current policies and procedures related to

training staff to review any marketing and advertising materials about the IDI’s deposit

products and services and to monitor and evaluate compliance with part 328.

With respect to the comments related to the scope of the third parties’ activities,

IDIs should establish and maintain policies and procedures to evaluate and monitor, as

appropriate, any deposit insurance-related representations made by third parties that

provide deposit-related services to the IDI or offer the IDI’s deposit-related products or

services to other parties

liance with part 328.

With respect to the comments related to the scope of the third parties’ activities,

IDIs should establish and maintain policies and procedures to evaluate and monitor, as

appropriate, any deposit insurance-related representations made by third parties that

provide deposit-related services to the IDI or offer the IDI’s deposit-related products or

services to other parties. More specifically, IDIs should consider the extent to which

their third-party relationships involve representations or statements subject to part 328,

and the role third parties have in crafting or presenting such representations or statements

for prospective depositors. For example, a third-party relationship for web hosting

services may not warrant policies or procedures for compliance with part 328 to the

extent the third party simply publishes and hosts content developed and directed by the

IDI. However, if the IDI offers a deposit account through or by a non-bank third party on

a consumer-facing website with the branding and marketing of a non-bank third party,

that third party may be making representations to consumers to describe the product’s

characteristics in a manner that is covered by part 328 subpart B. This would warrant

that the IDI include provisions in its policies and procedures to monitor and evaluate

65

compliance with part 328 by the third party. The IDI should also consider steps that it

would take to mitigate any misrepresentations related to deposit insurance that could

cause potential consumer confusion and harm regarding a product provided by the IDI.

Commenters also suggested that the policies and procedures requirement should

exclude non-contractual relationships

evaluate

65

compliance with part 328 by the third party. The IDI should also consider steps that it

would take to mitigate any misrepresentations related to deposit insurance that could

cause potential consumer confusion and harm regarding a product provided by the IDI.

Commenters also suggested that the policies and procedures requirement should

exclude non-contractual relationships. While the FDIC understands that IDIs often have

provisions in their contracts with third parties to review certain marketing materials, the

FDIC believes that limiting the scope of this requirement to only situations where IDIs

have contractual relationships with third parties would not capture IDI relationships with

certain third parties that the rule is intended to capture.

In response to commenter concerns about the scope of this requirement, the FDIC

notes that the policies and procedures related to certain third parties are required to be

commensurate with the nature, size, complexity, scope, and potential risk of the deposit-

taking activities. With regard to third-party relationships, IDIs will be expected to utilize

a risk-based approach in determining the nature and extent of the policies and procedures

that are needed to monitor and evaluate certain third parties’ compliance with part 328

subpart B. For example, there may be third parties that have long-standing, well-

established relationships with the IDI such that the third party has been offering products

and services on the IDI’s behalf for many years and appropriately representing deposit

insurance. In such instances, the IDI might deem the relationship to be one that warrants

less extensive monitoring and evaluation, depending on the relationship and potential

risk. The FDIC notes, however, that such relationships could experience significant

changes, including in personnel, risk management philosophy, or new types of products

offered, that may warrant more extensive policies and procedures. Likewise, the IDI may

ght deem the relationship to be one that warrants

less extensive monitoring and evaluation, depending on the relationship and potential

risk. The FDIC notes, however, that such relationships could experience significant

changes, including in personnel, risk management philosophy, or new types of products

offered, that may warrant more extensive policies and procedures. Likewise, the IDI may

66

be involved in nascent relationships with novel arrangements and products that present a

greater risk of consumer confusion and warrant more extensive monitoring and

evaluation. As such, IDIs should ensure that the nature and scope of the policies and

procedures under the final rule are tailored to the risks identified. The policies and

procedures should effectively identify, address, and mitigate potential deposit insurance

misrepresentations identified by the IDI. It is also prudent for policies and procedures to

include provisions ensuring that third parties that provide marketing or joint marketing

services, web and other electronic channel design, or similar services, are aware of the

IDI’s compliance responsibilities under part 328.

Finally, the FDIC notes that if a non-bank misrepresents deposit insurance, the

FDIC would still expect to devote attention to taking action against the non-bank,

formally or informally, under part 328 Subpart B, regardless of the presence of a bank

partner.

8. Crypto-Assets

Proposed Rule

Among other things, part 328 prohibits any person from representing or implying

that any uninsured financial product is insured or guaranteed by the FDIC.52 This

prohibition applies to advertisements, publications, and other disseminations of

information

bank,

formally or informally, under part 328 Subpart B, regardless of the presence of a bank

partner.

8. Crypto-Assets

Proposed Rule

Among other things, part 328 prohibits any person from representing or implying

that any uninsured financial product is insured or guaranteed by the FDIC.52 This

prohibition applies to advertisements, publications, and other disseminations of

information. The FDIC has noted a number of misrepresentations of deposit insurance

coverage for crypto-assets,53 and proposed to amend part 328 to reinforce that

52 “Uninsured Financial Product” is currently defined to include non-deposit products, hybrid products,

investments, securities, obligations, certificates, shares, or financial products other than insured deposits.

53 See FDIC Press Release PR-60-2022, FDIC Issues Cease and Desist Letters to Five Companies for

Making Crypto Related False or Misleading Representations About Deposit Insurance (Aug. 19, 2022);

FDIC Press Release PR-9-2023, FDIC Demands Four

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