The Federal Deposit Insurance Corporation (FDIC) has recently updated its rules regarding the display and advertising of FDIC insurance signage. These new rules took effect on April 1, 2024, with a compliance deadline of Jan. 1, 2025. The primary objective of this modernization effort is to enhance consumer understanding of when their funds are protected by FDIC deposit insurance. Below are the key takeaways from the update:
Key updates:
- Coverage expansion: The updated rule mandates that FDIC insurance signs must by displayed across both physical and digital channels. This includes teller windows, ATMs, online banking platforms and mobile banking apps. The aim is to ensure that customers are clearly informed about with deposits are covered by FDIC insurance.
- Nondeposit products: The updated rule also requires an additional sign to be displayed where nondeposit products are offered. This applies to both physical locations and digital platforms. The definition of “nondeposit product” has been expanded to include crypto assets, reflecting the evolving financial landscape.
Steps for compliance:
- Update physical signage: Banks must ensure that all branch signage is updated to comply with the new rules by Jan. 1, 2025. This includes updating signs at teller windows and other areas where deposits are accepted.
- Digital deposit channels: Banks should compile a list of all current or proposed deposit-taking ATM's and digital deposit channels such as websites, online banking, and mobile banking apps. New signage must be uploaded to each relevant page by January 1, 2025. It is important to note that if a bank’s website is purely informational and does not allow customers to make or access deposits, it is not considered a deposit taking channel.
- Nondeposit signage: Identify all physical locations, ATMs and digital channels offering nondeposit products. Ensure that the nondeposit sign is displayed at each relevant physical location or digital screen by January 1, 2025. This step is crucial for informing customers about the nature of the products they are engaging in, since these are not FDIC insured.
- Policies and procedures: Establish and maintain written policies and procedures to ensure ongoing compliance with the updated FDIC signage and advertising rules. This document should outline the steps the bank will take to remain compliant and should be regularly reviewed and updated as necessary.
- Staff training: Provide through training to all staff members to help them understand the new requirements. This training should provide the staff with the knowledge to effectively communicate the changes to customers and ensure that they can answer any questions that may arise.
- Conduct an audit: It is highly recommended to conduct an internal audit before the compliance deadline. This audit will help identify any gaps or areas needing improvement, ensuring a smooth transition to the new rules. The audit should cover both physical and digital channels.
For additional resources on the changes to the FDIC signs, please refer to the official FDIC guidelines.
