[Federal Register Volume 71, Number 136 (Monday, July 17, 2006)]
[Proposed Rules]
[Pages 40440-40443]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-6261]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 71, No. 136 / Monday, July 17, 2006 / 
Proposed Rules  

[[Page 40440]]



FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 328

RIN 3064-AD05


Advertisement of Membership

AGENCY: Federal Deposit Insurance Corporation (FDIC).

ACTION: Notice of proposed rulemaking.

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SUMMARY: The FDIC is proposing to revise its regulation governing 
official FDIC signs and advertising of FDIC membership. The proposed 
rule would replace the separate signs used by Bank Insurance Fund (BIF) 
and Savings Association Insurance Fund (SAIF) members with a new sign, 
or insurance logo, to be used by all insured depository institutions. 
In addition, the proposed rule would extend the advertising 
requirements to savings associations and consolidate the exceptions to 
those requirements. The proposed rule also would restructure the text 
in certain sections in order to make them easier to read. Finally, the 
current prohibition pertaining to receipt of deposits at the same 
teller's station or window as noninsured institutions would be placed 
in its own section.

DATES: Written comments must be received by the FDIC on or before 
September 15, 2006.

ADDRESSES: You may submit comments by any of the following methods:
     Agency Web site: http://www.FDIC.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments.
     E-mail: [email protected].
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivered/Courier: The guard station at the rear of 
the 550 17th Street Building (located on F Street), on business days 
between 7 a.m. and 5 p.m.
     Public Inspection: Comments may be inspected and 
photocopied in the FDIC Public Information Center, 3501 North Fairfax 
Drive, Room E-1002, Arlington, Virginia 22226, between 9 a.m. and 5 
p.m. on business days.
     Internet Posting: Comments received will be posted without 
change to http://www.FDIC.gov/regulations/laws/federal/propose.html, 
including any personal information provided.
     Federal e-Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.

FOR FURTHER INFORMATION CONTACT: Kara L. Ritchie, Policy Analyst, (202) 
898-3716, Division of Supervision and Consumer Protection (DSC); John 
M. Jackwood, Acting Chief, Compliance Section, (202) 898-3991, DSC; 
Kathleen G. Nagle, Supervisory Consumer Affairs Specialist, (202) 898-
6541, DSC; or Richard B. Foley, Counsel, (202) 898-3784, Legal 
Division, Federal Deposit Insurance Corporation, Washington, DC 20429.

SUPPLEMENTARY INFORMATION:

I. The Proposed Rule

A. Section 328.0--Scope

    The scope provision would be revised by the proposed rule to 
reflect that there would now be one sign used by all insured depository 
institutions and the advertising requirements in section 328.3 would be 
extended to savings associations.

B. Section 328.1--Official Sign

    Pursuant to section 18(a) of the Federal Deposit Insurance Act (FDI 
Act), as amended by section 2(c)(2) of the Federal Deposit Insurance 
Reform Conforming Amendments Act of 2005, Public Law 109-173, 119 Stat. 
3601-19 (FDIRCA Act), the FDIC must promulgate regulations prescribing 
a sign or signs that each insured depository institution will be 
required to display at each place of business it maintains. Section 
18(a)(1)(B) of the FDI Act, as amended by the FDIRCA Act, specifies 
that the required sign must include a statement that insured deposits 
are backed by the full faith and credit of the United States 
Government. Therefore, this section would be revised to eliminate the 
separate official bank sign and official savings association sign, and 
display a black and white version of the new official sign that would 
be used by all insured depository institutions.
    The proposed official sign would be 7 by 3 in 
size, with black lettering and gold background. The design is similar 
in color scheme and layout to the current bank sign but with the 
following differences: First, the language above ``FDIC'' states ``Each 
depositor insured to at least $100,000,'' instead of ``Each depositor 
insured to $100,000.'' The revised language more accurately reflects 
the new deposit insurance coverage limits in the FDIRCA Act and the 
Federal Deposit Insurance Reform Act of 2005, Public Law 109-171, title 
II, subtitle B, 120 Stat. 9-21. Second, the proposed sign includes the 
FDIC's internet website and leaves out the FDIC seal. Finally, the full 
faith and credit statement required by the FDIRCA Act is in italics on 
the left side of the proposed sign and is bordered by a semi-circle of 
stars, a design that partially reflects the current savings association 
sign.
    Section 328.1 also describes the ``symbol'' of the Corporation that 
insured depository institutions could use at their option as the 
official advertising statement. The ``symbol'' would be that portion of 
the proposed official sign consisting of ``FDIC'' and the two lines of 
smaller type above and below ``FDIC.''

C. Section 328.2--Display and Procurement of Official Sign

    Conforming changes have been proposed to this section in order to 
make it applicable to all insured depository institutions, not just 
insured banks. The proposed rule also restructures this section to make 
it easier to read but without making any substantive changes.
    Part 328 uses the term ``automatic service facilities'' in some 
places, and the term ``remote service facilities'' in other places, 
although the two terms have the same meaning within that part. The 
proposed rule uses the term ``remote service facility'' in each place 
and defines that term in section 328.2(a)(1)(ii) to include any 
automated teller machine, cash dispensing machine, point-of-sale 
terminal, or other remote electronic facility where deposits are 
received.
    The current sections 328.2 and 328.4 are virtually identical, 
except that one applies to insured banks and the other applies to 
insured savings associations. The key difference between these 
provisions is that section 328.4 has a

[[Page 40441]]

paragraph (e) prohibiting insured savings associations from using the 
official bank sign. As the new official sign would be applicable to all 
insured depository institutions, the proposed rule would combine 
current sections 328.2 and 328.4 into a new section 328.2.
    As in the current section 328.2, the proposed revision would allow 
an insured depository institution to vary the size, color, and 
materials of the official sign at its expense, and to display such 
altered signs within the institution at locations other than where 
insured deposits are received. However, the official sign provided by 
the FDIC would adhere to the specifications of section 328.1, and only 
the official sign could be displayed where insured deposits are 
received. The proposed rule refers to the FDIC's Internet Web site, 
http://www.fdic.gov, for information on obtaining the official sign.

D. Section 328.3--Official Advertising Statement Requirements

(1) Proposal to Extend Official Advertising Statement Requirement to 
Savings Associations
    Section 328.3 requires insured banks to include the official 
advertising statement in all their advertisements (with certain 
exceptions). The basic form of the statement is ``Member of the Federal 
Deposit Insurance Corporation,'' which may be shortened to ``Member 
FDIC.'' There is no equivalent requirement for insured savings 
associations. The FDIC proposes to revise section 328.3 to provide for 
consistent treatment of banks and savings associations by requiring all 
insured depository institutions to include the official advertising 
statement in their advertisements.
    The FDIC believes there are compelling reasons to apply the 
advertising requirements equally to banks and savings associations, 
particularly now that the BIF and SAIF have been merged into one fund, 
the Deposit Insurance Fund, and there will be one official sign for 
both banks and savings associations. Consistent treatment of banks and 
savings associations on this matter would significantly enhance the 
public's ability to determine whether an institution's deposits are 
federally insured or not, and it would eliminate any possibility for 
public confusion. A consistent and uniform rule applicable to both 
banks and savings associations would best serve the interests of the 
public and best protect the Deposit Insurance Fund.
(2) Proposals To Consolidate Exceptions to the Required Use of the 
Official Advertising Statement
    There are currently twenty exceptions to the required use of the 
official advertising statement. The FDIC proposes to simplify the 
advertising requirements by reducing the number of exceptions to five. 
The proposed rule does this by limiting the applicability of section 
328.3 to advertisements that specifically promote deposit products or 
generally promote banking services offered by an insured depository 
institution. The latter would include advertisements that contain an 
institution's name and a statement about the availability of general 
banking services. The term advertisement is defined as a commercial 
message, in any medium, that is designed to attract public attention or 
patronage to a product or business. By limiting the applicability of 
section 328.3 in this way, most of the current exceptions to the 
advertising requirements become unnecessary. The exemptions eliminated 
from the proposed rule are for: statements and reports of condition; 
bank supplies; listings in directories; and advertisements relating to 
loan services, safekeeping box services, trust services, real estate 
services, armored car services, service or analysis charges, securities 
services, travel department business, and savings bank life insurance.
(3) Other Proposed Revisions
    The proposed rule also would make certain clarifying, non-
substantive, and conforming editorial changes in section 328.3. In 
addition, three provisions in the current rule have not been included 
in the proposed rule because they address narrow situations that rarely 
occur. The first provision, section 328.3(a)(2), allows the Board to 
grant temporary exemptions from the advertising requirements for good 
cause. The second provision, section 328.3(a)(3), concerns advertising 
copy not including the official advertising statement that is on hand 
on the date the advertising requirements become operative. The third 
provision, section 328.3(d), addresses how to handle outstanding 
billboard advertisements that require use of the official advertising 
statement.

E. Section 328.4--Prohibition Against Receiving Deposits at Same 
Teller's Station or Window as Noninsured Institution

    Sections 328.2 currently has a provision that prohibits banks from 
receiving deposits at the same teller's station or window where a 
noninsured institution receives deposits, except for a remote service 
facility. Since this provision does not relate directly to the display 
and procurement of the official sign and is significant enough that it 
should be set apart in a separate section, the proposed rule would move 
the provision to section 328.4.

II. Effective Date

    In order to give insured depository institutions a transition 
period to adjust to the new requirements in the proposed revision of 
part 328, the final rule would be effective six months after 
publication in the Federal Register.

III. Request for Comments

    The FDIC requests comments on all aspects of the proposed rule and, 
in particular, the following issues:

(1) Effective Date

    The final rule would be effective six months after publication in 
the Federal Register. The FDIC solicits comment on whether the proposed 
effective date would give insured depository institutions sufficient 
time to adjust to the new requirements in the proposed revision of part 
328.

(2) Use of Official Advertising Statement in Advertisements Marketing 
Non-Deposit Products

    Many insured depository institutions offer both deposit products 
and non-deposit products (NDPs). NDPs include both insurance and 
investment products. Where NDPs are offered, insured depository 
institutions are required to disclose that they are not federally 
insured.\1\ However, consumers may be confused about Federal deposit 
insurance coverage when the official advertising statement is used in 
advertisements that market NDPs. The FDIC therefore solicits comment on 
whether the final rule should include a provision that would: (1) 
Prohibit use of the official advertising statement in advertisements 
relating solely to NDPs or hybrid products containing NDP and deposit 
features (e.g., sweep accounts); and (2) require that the official 
advertising statement be clearly segregated from information about NDPs 
in advertisements containing information about both NDPs and insured 
deposit products.
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    \1\ See e.g., 12 CFR 343.40 (Consumer Protection in Sales of 
Insurance rules applicable to FDIC supervised institutions) and the 
Interagency Policy Statement on retail Sales of Nondeposit 
Investment Products, issued on February 15, 1994.

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[[Page 40442]]

IV. Paperwork Reduction Act

    The proposed rule does not contain any ``collections of 
information'' within the meaning of section 3502(3) of the Paperwork 
Reduction Act of 1995 (44 U.S.C. 3502(3)).

V. Regulatory Flexibility Act

    Display of the official sign is required by section 18(a) of FDI 
Act, as amended by section 2(c)(2) of the FDIRCA Act. There would not 
be any compliance costs with displaying the official sign, because it 
would be provided by the FDIC free of charge. Insured banks have 
complied with similar advertising requirements for over seventy years 
without significant expense. Although savings associations have not 
been subject to such advertising requirements, many have used the 
official advertising statement voluntarily. Moreover, mandatory 
compliance with the advertising requirements by savings association 
would not entail significant expense. Accordingly, the Board hereby 
certifies that the proposed rule would not have a significant economic 
impact on a substantial number of small entities within the meaning of 
the Regulatory Flexibility Act (5 U.S.C. 601-612).

VI. The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The FDIC has determined that the proposed rule will not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, enacted as part of the Omnibus 
Consolidated and Emergency Supplemental Appropriations Act of 1999 
(Pub. L. 105-277, 112 Stat. 2681).

List of Subjects in 12 CFR Part 328

    Advertising, Bank deposit insurance, Savings associations, Signs 
and symbols.

    For the reasons stated above, the Board of Directors of the Federal 
Deposit Insurance Corporation hereby proposes to amend part 328 of 
title 12, chapter III of the Code of Federal Regulations by revising it 
to read as follows:

PART 328--ADVERTISEMENT OF MEMBERSHIP

Sec.
328.0 Scope.
328.1 Official sign.
328.2 Display and procurement of official sign.
328.3 Official advertising statement requirements.
328.4 Prohibition against receiving deposits at same teller's 
station or window as noninsured institution.

    Authority: 12 U.S.C. 1818(a), 1819 (Tenth), 1828(a).


Sec.  328.0  Scope.

    Part 328 describes the official sign of the FDIC and prescribes its 
use by insured depository institutions. It also prescribes the official 
advertising statement insured depository institutions must include in 
their advertisements. For purposes of part 328, the term ``insured 
depository institution'' includes insured branches of a foreign 
depository institution. Part 328 does not apply to non-insured offices 
or branches of insured depository institutions located in foreign 
countries.


Sec.  328.1  Official sign.

    (a) The official sign referred to in this part shall be 
7 by 3 in size, with black lettering and gold 
background, and of the following design:
[GRAPHIC] [TIFF OMITTED] TP17JY06.000

    (b) The symbol of the Corporation, as used in this part, shall be 
that portion of the official sign consisting of ``FDIC'' and the two 
lines of smaller type above and below ``FDIC.''


Sec.  328.2  Display and procurement of official sign.

    (a) Display of official sign. Each insured depository institution 
shall continuously display the official sign at each station or window 
where insured deposits are usually and normally received in the 
depository institution's principal place of business and in all its 
branches.
    (1) Other locations--
    (i) Within the institution. An insured depository institution may 
display signs in other locations within the insured depository 
institution that vary from the official sign in size, colors, or 
materials.
    (ii) Other facilities. An insured depository institution may 
display the official sign on or at Remote Service Facilities. If an 
insured depository institution displays the official sign at a Remote 
Service Facility, and if there are any noninsured institutions that 
share in the Remote Service Facility, any insured depository 
institution that displays the official sign must clearly show that the 
sign refers only to a designated insured depository institution(s). As 
used in this part, the term ``Remote Service Facility'' includes any 
automated teller machine, cash dispensing machine, point-of-sale 
terminal, or other remote electronic facility where deposits are 
received.
    (2) Newly insured institutions. A depository institution shall 
display the official sign no later than its twenty-first

[[Page 40443]]

day of operation as an insured depository institution, unless the 
institution promptly requested the official sign from the Corporation, 
but did not receive it before that date.
    (b) Procuring official sign. An insured depository institution may 
procure the official sign from the Corporation for official use at no 
charge. Information on obtaining the official sign is posted on the 
FDIC's Internet Web site, www.fdic.gov. Alternatively, insured 
depository institutions may procure from commercial suppliers signs 
that vary from the official sign in size, colors, or materials. 
However, only the official sign may be displayed at stations or windows 
where insured deposits are usually and normally received. Any insured 
depository institution which has promptly submitted a written request 
for an official sign to the Corporation shall not be deemed to have 
violated this section by failing to display the official sign, unless 
the insured depository institution fails to display the official sign 
after receipt thereof.
    (c) Required changes in sign. The Corporation may require any 
insured depository institution, upon at least thirty (30) days' written 
notice, to change the wording of the official sign in a manner deemed 
necessary for the protection of depositors or others.


Sec.  328.3  Official advertising statement requirements.

    (a) Advertisement defined. The term advertisement, as used in this 
part, shall mean a commercial message, in any medium, that is designed 
to attract public attention or patronage to a product or business.
    (b) Official advertising statement. The official advertising 
statement shall be in substance as follows: ``Member of the Federal 
Deposit Insurance Corporation.''
    (1) Optional short title and symbol. The short title ``Member of 
FDIC'' or ``Member FDIC,'' or a reproduction of the ``symbol'' of the 
Corporation (as defined in section 328.1 of this part), may be used by 
insured depository institutions at their option as the official 
advertising statement.
    (2) Size and print. The official advertising statement shall be of 
such size and print to be clearly legible. If the ``symbol'' of the 
Corporation is used as the official advertising statement, and the 
``symbol'' must be reduced to such proportions that the two lines of 
smaller type above and below ``FDIC'' are indistinct and illegible, 
those lines of smaller type may be blocked out or dropped.
    (c) Use of official advertising statement in all advertisements.
    (1) General requirement. Except as provided in paragraph (d) of 
this section, each insured depository institution shall include the 
official advertising statement, prescribed in paragraph (b) of this 
section, in all advertisements that either promote deposit products and 
services or generally promote banking services offered by the 
institution.
    (2) Foreign depository institutions. When a foreign depository 
institution has both insured and noninsured U.S. branches, the 
depository institution must also identify which branches are insured 
and which branches are not insured in all of its advertisements 
requiring use of the official advertising statement.
    (3) Newly insured institutions. A depository institution shall 
include the official advertising statement in its advertisements no 
later than its twenty-first day of operation as an insured depository 
institution.
    (d) Types of advertisements which do not require the official 
advertising statement. The following types of advertisements do not 
require use of the official advertising statement:
    (1) Signs or plates in the insured depository institution offices 
or attached to the building or buildings in which such offices are 
located;
    (2) Joint or group advertisements of banking services where the 
names of insured depository institutions and noninsured institutions 
are listed and form a part of such advertisements;
    (3) Advertisements by radio or television, other than display 
advertisements, which do not exceed thirty (30) seconds in time;
    (4) Advertisements which are of the type or character that make it 
impractical to include the official advertising statement, including, 
but not limited to, promotional items such as calendars, matchbooks, 
pens, pencils, and key chains; and
    (5) Advertisements which contain a statement to the effect that the 
depository institution is a member of the Federal Deposit Insurance 
Corporation, or that the depository institution is insured by the 
Federal Deposit Insurance Corporation, or that its deposits or 
depositors are insured by the Federal Deposit Insurance Corporation to 
at least $100,000 for each depositor.
    (e) Official advertising statement in non-English language. The 
non-English equivalent of the official advertising statement may be 
used in any advertisement, provided that the translation has had the 
prior written approval of the Corporation.


Sec.  328.4  Prohibition against receiving deposits at same teller's 
station or window as noninsured institution.

    (a) Prohibition. An insured depository institution may not receive 
deposits at any teller's station or window where any noninsured 
institution receives deposits or similar liabilities.
    (b) Exception. This section does not apply to deposits received at 
a Remote Service Facility.

    Dated at Washington DC, this 11th day of July, 2006.

    By order of the Board of Directors.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 06-6261 Filed 7-14-06; 8:45 am]
BILLING CODE 6714-01-P