[Federal Register Volume 87, Number 244 (Wednesday, December 21, 2022)]
[Proposed Rules]
[Pages 78017-78037]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-27349]


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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 328

RIN 3064-AF26


FDIC Official Sign and Advertising Requirements, False 
Advertising, Misrepresentation of Insured Status, and Misuse of the 
FDIC's Name or Logo

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of proposed rulemaking and request for comment.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is seeking 
comment on a proposal to modernize the rules governing use of the 
official FDIC sign and insured depository institutions' (IDIs) 
advertising statements to reflect how depositors do business with IDIs 
today, including through digital and mobile channels. The proposed rule 
also would clarify the FDIC's regulations regarding misrepresentations 
of deposit insurance coverage by addressing specific scenarios where 
consumers may be misled as to whether they are doing business with an 
IDI and whether their funds are protected by deposit insurance. The 
proposal is intended to enable consumers to better understand when they 
are doing business with an IDI and when their funds are protected by 
the FDIC's deposit insurance coverage.

DATES: Comments must be received by the FDIC no later than February 21, 
2023.

ADDRESSES: Interested parties are invited to submit written comments, 
identified by RIN 3064-AF26, by any of the following methods:
     Agency Website: https://www.fdic.gov/resources/regulations/federal-register-publications/. Follow the instructions for 
submitting comments on the agency website.
     Email: [email protected]. Include RIN 3064-AF26 in the 
subject line of the message.
     Mail: James P. Sheesley, Assistant Executive Secretary, 
Attention: Comments--RIN 3064-AF26, Federal Deposit Insurance 
Corporation, 550 17th Street NW, Washington, DC 20429.
     Hand Delivery: Comments may be hand delivered to the guard 
station at the rear of the 550 17th Street NW building (located on F 
Street NW) on business days between 7 a.m. and 5 p.m.
     Public Inspection: Comments received, including any 
personal information provided, may be posted

[[Page 78018]]

without change to https://www.fdic.gov/resources/regulations/federal-register-publications/. Commenters should submit only information that 
the commenter wishes to make available publicly. The FDIC may review, 
redact, or refrain from posting all or any portion of any comment that 
it may deem to be inappropriate for publication, such as irrelevant or 
obscene material. The FDIC may post only a single representative 
example of identical or substantially identical comments, and in such 
cases will generally identify the number of identical or substantially 
identical comments represented by the posted example. All comments that 
have been redacted, as well as those that have not been posted, that 
contain comments on the merits of the proposed rule will be retained in 
the public comment file and will be considered as required under all 
applicable laws. All comments may be accessible under the Freedom of 
Information Act.

FOR FURTHER INFORMATION CONTACT: Division of Depositor and Consumer 
Protection: Luke H. Brown, Associate Director, 202-898-3842, 
[email protected]; Meron Wondwosen, Senior Policy Analyst, 202-898-7211, 
[email protected]; Edward J. Hof, Senior Policy Analyst, 202-898-
7213, [email protected]; Legal Division: James Watts, Counsel, 202-898-
6678, [email protected]; Vivek Khare, Counsel, 202-898-6847, 
[email protected].

SUPPLEMENTARY INFORMATION: The FDIC is proposing to amend 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 proposed rule would generally: (1) modernize and amend the 
rules governing the display of the official sign in branches, to, for 
example, apply the rules to non-traditional IDI branches; (2) require 
the use of the FDIC official sign, a new digital sign, and other signs 
differentiating deposits and non-deposit products across all banking 
channels, including automated teller machines (ATMs) and evolving 
digital channels (which functionally serve as digital teller windows); 
(3) clarify the FDIC's rules regarding misrepresentations of deposit 
insurance coverage by addressing specific scenarios where information 
provided to consumers may be misleading; (4) amend definitions of 
``non-deposit product'' to include crypto-assets; and (5) require IDIs 
to maintain policies and procedures addressing compliance with part 
328. As explained below, the proposal is intended to enable consumers 
to better understand when they are doing business with an IDI and when 
their funds are protected by the FDIC's deposit insurance coverage.

Policy Objectives

    In recent years there have been significant changes in the banking 
landscape, including continued evolution of bank branches and their 
role in serving depositors, substantially increased reliance on 
internet and mobile banking channels to access IDI banking services, 
and growth in financial technology (fintech) companies that seek to 
offer new options 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 doing business 
with an IDI and when their funds are protected by the FDIC's deposit 
insurance. In addition, the FDIC has observed increased misleading 
representations about deposit insurance in internet banking channels, 
which can result in consumer confusion and harm. These types of 
misleading statements create uncertainty and could dilute and weaken 
the confidence that underpins banks and our nation's broader financial 
system.
    To keep pace with the ongoing market and technological 
developments, the proposed amendments to part 328 are intended to 
promote several policy goals. Specifically, the FDIC hopes to bring the 
certainty and confidence historically provided by the FDIC sign at 
traditional IDI branch teller windows to the varied and evolving 
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 they 
provide clear, consistent, and accurate information about deposit 
insurance upon which consumers, businesses, and other entities may base 
their financial decisions.
    The proposed rule would establish sign requirements across all 
banking channels, including evolving digital channels, to align with 
marketplace developments. The proposed sign requirements are also 
intended to more clearly distinguish insured deposits from non-deposit 
products, and to better distinguish IDIs from non-banks in the digital 
space. The proposed rule would allow consumers, businesses, and other 
entities to better understand when their funds are protected by the 
FDIC's deposit insurance. At the same time, the proposed sign 
requirements are intended to permit flexibility for IDIs and other 
firms in the marketing of their products and services.
    The proposed 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 consumers, and proposes 
to require clear disclosures that would better inform consumers as to 
when their funds are protected by FDIC deposit insurance. Further 
clarity in this area would be beneficial for both consumers and the 
industry.

Background

    The FDIC is an independent agency that maintains stability and 
public confidence in the nation's financial system by, among other 
things, insuring the deposits of all IDIs. The FDIC has helped to 
maintain public confidence in the nation's banking system in times of 
financial turmoil, including the period from 2008 to 2013, when the 
United States experienced a severe financial crisis, and more recently 
during the financial stress associated with the COVID-19 pandemic. The 
FDIC has proactively sought to protect consumers,\1\ promote public 
confidence in insured deposits, and prevent false and misleading 
representations about the manner and extent of FDIC deposit insurance. 
Today, there are nearly 5,000 IDIs in the United States.\2\
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    \1\ 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.
    \2\ FDIC's BankFind Suite, available at: https://banks.data.fdic.gov/bankfind-suite/bankfind.
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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\
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    \3\ 12 U.S.C. 1828(a)(1). Section 9 of the FDI Act provides the 
FDIC 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 (Sec. Sec.  328.0 through 
328.5-328.99).

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[[Page 78019]]

    The FDIC's official sign and advertising statement regulations 
require banks 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.\5\
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    \5\ See generally, 12 CFR part 328.
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    The agency last made major amendments to these regulations in 
2006.\6\ The current text of the FDIC's sign regulations refer to an 
IDI's physical premises and Remote Service Facilities, but does not 
specify other banking channels that have since developed.\7\
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    \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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    In addition, 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 
earlier this year, 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\ Since the new subpart B 
regulations took effect, the FDIC has observed additional misconduct by 
entities misusing the FDIC's name or logo and misrepresenting the 
extent of FDIC insurance coverage.
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    \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). Further, under 
Federal law, it is also 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 
(Sec. Sec.  328.100 through 328.109). Subpart B establishes the 
process by which the FDIC will identify and investigate conduct that 
may violate section 18(a)(4), the standards under which such conduct 
will be evaluated, and the procedures which the FDIC will follow 
when formally and informally enforcing the provisions of section 
18(a)(4).
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Developments in Consumer Access to Banking and Financial Services

    In recent years, there have been significant changes in the banking 
landscape, including the evolution of 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. The 
following overview of these trends is intended to provide context for 
the proposed rule, which seeks to enable consumers to better understand 
when they are doing business with an IDI and when their funds are 
protected by FDIC 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 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 branches with different styles and designs. These 
locations may include electronically-staffed kiosks, interactive ATMs 
that provide remote assistance with a teller, and teller-less 
caf[eacute]s where deposits can be accepted on tablets or through ATMs. 
The FDIC's existing sign rules, which focus on display of the official 
sign at teller windows or stations, have not kept pace with these 
developments.
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    \10\ Federal Deposit Insurance Corporation (FDIC), 2021 National 
Survey of Unbanked and Underbanked Households (October 2022).
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    The existing sign rules also do not reflect evolving digital 
channels, which have become an increasingly important means of access 
to banking products and services. While some consumers continue to 
visit branches, others rely on ATM access and digital channels such as 
online banking and mobile banking. For these consumers, 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 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 and provide consistent sign 
requirements for digital channels.
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    \11\ Id.
    \12\ Id.
    \13\ Id.
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    Banking customers are also offered an increasingly wide array of 
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. Absent adequate 
signs or disclosures, simultaneous offering of both insured deposits 
and non-deposit products may lead consumers (who are aware that the IDI 
is insured by the FDIC) to mistakenly conclude that all of the products 
being offered are insured. Some of these uninsured products may be 
speculative.
    Growth in the fintech sector has also served to blur 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 and non-banks can take 
many forms and continue to evolve at a rapid pace. For example, an IDI 
might enter into an arrangement with the fintech company to offer the 
IDI's products 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 state to its customers that their 
funds are FDIC-insured, or that they are insured by the FDIC on a 
``pass-through'' basis, without an accurate explanation of what this 
means. The proliferation of relationships and disclosures may confuse 
consumers as to whether they are dealing with an IDI, whether their 
funds are insured by the FDIC, and the risks they are protected 
against.

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

[[Page 78020]]

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, 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.
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    \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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    The majority of comments recognized the need for updating FDIC sign 
and advertising requirements in response to changes in industry 
practice and the increasingly significant role played by digital and 
mobile banking. At the same time, commenters generally favored greater 
flexibility in terms of the size, design, and location of the official 
FDIC sign at IDIs' branches. Several commenters proposed requiring a 
single, conspicuous physical or digital display in the teller area as 
opposed to smaller signs placed at each window. Some commenters 
suggested amending the continuous display requirement to allow for 
rotating digital disclosures.
    Commenters also indicated that consumers assume products offered 
through IDIs are insured and emphasized the importance of enabling 
consumers to identify uninsured products and understand the role of 
third parties in offering such products.
    Commenters also suggested that the FDIC clarify how sign 
requirements apply to digital and mobile banking channels. While some 
requested clarity on the size and location of the FDIC sign on web 
pages and mobile applications, others urged the FDIC to adopt a 
flexible policy that better accounts for technological limitations and 
preservation of user experience. Similarly, several commenters 
requested clarity on how teller window sign requirements apply to 
digital banking channels and revisions to the definition of Remote 
Service Facility to incorporate digital and mobile banking. Some IDIs 
also indicated that they voluntarily display the FDIC advertising 
statement on their digital pages.
    One commenter noted the increase in uninsured entities offering 
products and services similar to banks, and indicated the risk of 
consumer confusion will likely increase. This commenter suggested a 
clear articulation by the FDIC regarding the obligations that non-banks 
have with respect to offering these products and services, whether 
insured or not, can promote consumer understanding and mitigate the 
risk of consumer confusion.
    With respect to advertising requirements, many commenters sought 
clarification on which products and services require the advertising 
statement. Some commenters proposed permitting advertisements to host 
the required statement ``one click away'' in order to permit greater 
flexibility in advertising format, while others expressed concern that 
such an arrangement would lead to greater consumer confusion about 
whether advertised products qualify for deposit insurance.
    The FDIC carefully considered comments received in response to the 
RFIs in formulating this proposal, and remains committed to considering 
further public input on the modernization of its sign and advertising 
requirements through this document and comment process. Certain 
commenters' suggestions are discussed in further detail in the 
``Alternatives Considered'' section of this document.\16\
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    \16\ See infra Section IV.
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Previous Rulemaking

    On May 17, 2022, the FDIC issued a final rule adding a new subpart 
B to 12 CFR part 328. 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. This has 
caused continuing challenges for consumers in determining whether they 
are doing business with an IDI and whether their funds are protected by 
the FDIC's deposit insurance coverage. The FDIC believes that further 
clarification of subpart B may be helpful to address these challenges, 
particularly to address specific situations where consumers may be 
misled as to whether an entity is insured by the FDIC or the nature and 
extent of deposit insurance coverage.

Description of the Proposed Rule

    As explained above, the FDIC is proposing to modernize its sign and 
advertising requirements to reflect current banking practices, 
including updating the rules to reflect that deposit-taking via 
physical branch, digital, and mobile banking channels has evolved since 
the FDIC last significantly updated its rules in 2006. While various 
channels are used to access bank products, the FDIC aims to establish 
sign and advertising requirements that enable IDIs' customers to 
clearly understand when their funds are protected by the FDIC's deposit 
insurance coverage. The proposed changes to the sign rules include 
requirements for physical bank premises, digital channels such as 
online banking websites and mobile applications, and automated teller 
machines and similar devices. For simplicity, requirements applicable 
to each of these channels are set forth in separate sections of the 
proposed rule.
    The proposed rule's sign requirements include three distinct signs 
relating to deposit insurance. The first is the FDIC's official sign, 
which is currently displayed at IDIs' principal place of business and 
branches. Second, the proposed rule would require the display of a 
digital sign on IDIs' digital deposit-taking channels, such as online 
banking websites and mobile applications. The digital sign, which would 
be an abbreviated version of the FDIC's official sign, would promote a 
clear understanding by consumers of when they are interacting with an 
IDI rather than a non-bank and when their funds are insured by the 
FDIC. Third, the proposed rule includes a non-deposit sign requirement 
that would address the potential for consumer confusion where an IDI 
offers both insured deposits and non-deposit products through the same 
channel (e.g., insured deposits and non-deposit products are both 
offered at a branch). In such instances, the IDI's display of the 
official FDIC sign could lead consumers to believe that the non-deposit 
products are insured, absent additional information. Although sold via 
IDI banking channels, these products: are not insured by the FDIC; are 
not deposits; and may lose value. This non-deposit sign requirement is 
intended to be generally consistent with practices described in the 
longstanding interagency guidance on the retail sale

[[Page 78021]]

of non-deposit investment products \17\ that many institutions already 
follow, and thus should be familiar to many consumers.
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    \17\ See Interagency Statement on Retail Sales of Nondeposit 
Investment Products, FIL-9-94 (Feb. 17, 1994).
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    The FDIC is also proposing limited amendments to its official 
advertising statement requirements. These updates would provide IDIs 
with an additional option for a shortened official advertising 
statement, and include technical corrections to address the statutory 
increase of the deposit insurance amount that has occurred since the 
regulation was last amended.
    In addition, the FDIC is proposing to amend the provisions of 
subpart B to provide further clarity on 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 
proposed rule is described in further detail below.

Official Sign for IDIs

    The proposed rule would retain 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 U.S. government. Also consistent with 
current regulations, the proposed rule would define the ``symbol'' of 
the FDIC as the portion of the official sign that consists of ``FDIC'' 
and the statements ``Each depositor insured to at least $250,000'' and 
``Federal Deposit Insurance Corporation www.fdic.gov.''
    The proposed rule would retain an IDI's ability to procure physical 
versions of the official sign from the FDIC for official use at no 
charge, or to procure similar signage from commercial suppliers at 
their own expense. Any IDI that promptly submits a written request for 
an official sign to the FDIC would not be deemed to have violated the 
rule by failing to display the official sign, unless the IDI fails to 
display the official sign after receiving it.

Sign Requirements on IDIs' Physical Premises

    Section 328.3 of the proposed rule would govern signage within an 
IDI's premises. Consistent with current regulations, all IDIs would be 
required to continuously, clearly, and conspicuously display the 
official sign in their principal place of business and all their U.S. 
branches.\18\ To accommodate evolving styles and footprints of 
branches, however, the proposed rule would provide separate 
requirements for traditional footprint branches and non-traditional 
branches or other places of business, such as caf[eacute]-style 
branches.
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    \18\ The term ``branch'' would be defined by reference to the 
FDI Act's definition of ``domestic branch,'' 12 U.S.C. 1813(o). The 
FDI Act broadly defines ``domestic branch'' to include any branch 
bank, branch office, branch agency, additional office, or branch 
places of business at which deposits are received or checks paid, or 
money lent. The FDIC believes this definition would generally also 
include non-traditional footprint branches where customers can 
receive customer assistance from bank personnel to perform these 
core banking functions.
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Official Sign in Traditional Branches

    IDIs have traditionally received deposits at teller windows or 
stations, and the proposed rule would continue to provide for display 
of the official sign at traditional footprint branches in a manner 
consistent with current regulations. If deposits are usually and 
normally received at teller windows or stations, IDIs would generally 
be 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 background. The FDIC believes, however, that it is appropriate to 
allow additional flexibility with respect to display of the official 
sign in instances where the IDI only offers deposit products on the 
premises. In such cases, the requirement to display the official sign 
could 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. If the IDI also offers 
non-deposit products on the premises, display of the official sign at 
each teller window would be required, consistent with current 
regulations. Under the proposed rule, non-deposit signage would also be 
required as described below.

Official Sign in Non-Traditional Branches

    The proposed rule also would include sign requirements that 
accommodate the non-traditional footprint branches operated by some 
IDIs. For example, some IDIs operate caf[eacute]-style branches that 
include open areas where customers work with bankers. These branches 
may, or may not, include traditional teller windows or stations. Under 
the proposed rule, if insured deposits are usually and normally 
received in areas of the premises other than teller windows or 
stations, the IDI would be required to display the official sign in one 
or more locations in a size large enough to be legible anywhere in 
those areas. The FDIC believes that such signage would ensure that 
customers are aware that their deposits are protected by deposit 
insurance. If the IDI also offers non-deposit products on the premises, 
under the proposed rule, non-deposit signage would also be required as 
described below.

Non-Deposit Signs on IDIs' Premises

    The FDIC is proposing a new requirement for non-deposit signs when 
both insured deposits and non-deposit products are offered within the 
IDI's premises. In such instances, an IDI would be required to 
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.\19\ This non-deposit sign would be required to be continuously, 
clearly, and conspicuously displayed; however, the proposed rule does 
not include specific design or size requirements. To minimize the 
potential for consumer confusion, the proposed rule would prohibit 
display of non-deposit signs in close proximity to the official FDIC 
sign. The proposed rule's non-deposit sign requirements would apply to 
both traditional footprint branches and non-traditional footprint 
branches. IDIs that do not offer non-deposit products through 
traditional or non-traditional branches would not be impacted by this 
part of the proposal.
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    \19\ 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.
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Use of Electronic Media or Varied Signs To Satisfy Official Sign and 
Non-Deposit Sign Requirements on IDIs' Premises

    The proposal also provides IDIs the flexibility to utilize 
electronic media to satisfy sign requirements on an IDI's premises. 
Electronic signs have become increasingly common in retail 
environments, and the proposed rule includes a provision expressly 
permitting the use of electronic media to display required signs. This 
would apply to both display of the official sign and non-deposit 
signage, where required. However, where the proposed rule requires 
``continuous'' display of signs, this applies equally to signs

[[Page 78022]]

utilizing electronic media. Accordingly, a rotating display that 
includes the required sign periodically would not satisfy the 
``continuous'' requirement.
    The proposed rule also would retain certain provisions of current 
regulations that provide IDIs with flexibility in displaying the 
official sign. 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.

New Institutions

    Also consistent with current regulations, an IDI would be required 
to display the official sign at its premises no later than its twenty-
first calendar day of operation as an insured institution, unless it 
promptly requested the official sign from the FDIC but did not receive 
the official sign before that date.

Sign Requirements for IDIs' Digital Channels

    As explained above, consumers are increasingly using IDIs' websites 
and mobile banking applications to open deposit accounts, deposit and 
transfer funds, and buy and sell non-deposit products. For many 
consumers, an IDI's website and applications are the primary method of 
accessing banking products and, in turn, these platforms functionally 
serve as a digital teller window. Given these developments, the FDIC 
believes it is important to require signage with respect to IDIs' 
digital deposit-taking channels that is consistent with in-branch 
signage, to the extent feasible. This would promote a clear 
understanding by consumers of when they are interacting with an IDI and 
when their funds are protected by the FDIC's deposit insurance 
coverage.
    The proposed rule aims to establish sign requirements applicable to 
any medium through which deposits are usually and normally received. 
These changes are intended to enhance consistency of signage between 
IDIs' digital deposit-taking channels and other traditional channels, 
providing helpful clarity for consumers.

Digital Deposit-Taking Channels

    Section 328.5 of the proposed rule would define ``digital deposit-
taking channels'' to mean any electronic communications methods through 
which an IDI accepts insured deposits. This would include, but not be 
limited to, IDI websites, web-based applications, and mobile 
applications that offer consumers access to insured deposits at IDIs. 
The FDIC intends that the proposed rule would apply to digital channels 
where insured deposits are received that are analogous to the 
traditional teller windows or stations that consumers interact with at 
an IDI's physical premises. The language of the proposed rule is 
intended to accommodate the ongoing evolution of internet and mobile 
application infrastructure.

Digital Sign Requirement for Digital Deposit-Taking Channels

    Under the proposed rule, an IDI would be required to clearly, 
continuously, and conspicuously display a digital sign on the IDI's 
homepage, landing and login pages or screens, and transactional pages 
or screens involving deposits, to the extent applicable. This digital 
sign would be intended to visually communicate to consumers that they 
are doing business with an IDI rather than a non-bank entity. As the 
homepage and landing page are generally the primary point of 
interaction between IDIs and consumers, such display would prominently 
disclose to consumers that the entity is FDIC-insured. The FDIC also 
believes it is appropriate to require the digital sign on the login 
page so consumers are informed before signing up for or signing into an 
online account that such an account is associated with an IDI rather 
than a non-bank entity. Display of the digital sign also would be 
required on pages where the customer transacts with insured deposits.
    IDIs would be required to display the digital sign clearly, 
continuously, and conspicuously on the relevant pages or screens under 
the proposed rule. To be clear and conspicuous, the digital sign must 
be displayed in a continuous manner, near the top of the relevant page 
or screen, in close proximity to the IDI's name. Display of the digital 
sign at the footer of the relevant page or a similar location would not 
satisfy the clear and conspicuous standard.
    It may be helpful to consumers if IDIs link the digital sign to the 
FDIC's online BankFind tool. Such a link would take the consumer to 
FDIC's BankFind web page and make consumer due diligence easier than it 
is currently, which in turn would help consumers differentiate IDIs 
from non-banks.\20\ This is not a requirement under the proposed rule, 
however, and IDIs would have the discretion to include such a link when 
displaying the digital sign.
---------------------------------------------------------------------------

    \20\ The FDIC intends to update its online BankFind page with 
useful deposit insurance information for consumers as well as 
instructions on how to use BankFind so consumers could more easily 
verify that an entity is FDIC-insured.
---------------------------------------------------------------------------

Digital Sign Design

    The FDIC recognizes that IDIs may not as easily display the 
official FDIC sign, described above, on websites and application pages 
and is therefore proposing to require a digital sign that would be an 
abbreviated version of the official sign. The FDIC expects that a 
digital sign 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. The proposed rule does not include, and the 
FDIC is soliciting comment on, a design for the digital sign that 
includes these elements.

Digital Deposit-Taking Channels Are Not Advertisements

    The FDIC does not intend for the proposed digital sign requirement 
to overlap with the general advertising statement requirements that 
apply to IDIs. As discussed above, the proposed digital sign would be 
displayed on an IDI's homepage, landing and login pages, and 
transactional pages involving insured deposits. The FDIC views these 
pages as environments where the customer may interact directly with the 
IDI, rather than as ``advertisements'' as defined in the rule's 
advertising statement requirements.\21\ To the extent these pages can 
be considered ``advertisements,'' the inclusion of the digital sign on 
these pages would make clear that the IDI is insured by the FDIC, 
making use of the official advertising statement unnecessary under 
proposed Sec.  328.6(d)(10). IDIs, however, would remain responsible 
for complying with the official advertising statement requirements for 
other qualifying advertisements, including those contained on other web 
pages.

Non-Deposit Digital Signage Requirements When Non-Deposit Products and 
Deposit Products Are Offered Through Same Digital Deposit-Taking 
Channel

    The FDIC believes there is an increased risk of consumer confusion 
regarding deposit insurance coverage when both deposits and non-deposit 
products are offered through the same digital deposit-taking channel. 
Under the proposed rule, if a digital deposit-taking channel offers 
both access to deposits and non-deposit products, the

[[Page 78023]]

IDI would be required to clearly and conspicuously display signage 
indicating that the non-deposit products are: (1) not insured by the 
FDIC; (2) are not deposits; and (3) may lose value. IDIs would be 
required to display this non-deposit signage via a one-time 
notification when consumers initially access such a page. Such 
notification would provide an initial, prominent display of the non-
deposit signage to alert consumers that they are dealing with non-
deposit products that are not subject to FDIC-insurance. Moreover, 
consumers would need to take action to dismiss the notification before 
accessing the relevant page or screen. This could include, for example, 
an IDI using a ``pop-up,'' \22\ ``speedbump,'' \23\ or ``overlay'' \24\ 
that displays a notification to the consumer that the consumer must 
dismiss before accessing the content related to non-deposit products.
---------------------------------------------------------------------------

    \22\ A ``pop-up'' refers to a screen generated when a consumer 
clicks on particular hyperlink.
    \23\ A ``speedbump'' refers to an intermediate page that 
appears, requiring the user to take action to transition to the next 
page.
    \24\ An ``overlay'' refers to a content box that appears on a 
web page or screen and obscures the background content.
---------------------------------------------------------------------------

    In addition, the proposed rule would require the continuous display 
of the non-deposit signage on each page relating to non-deposit 
products and prohibit displaying the non-deposit signage in close 
proximity to the digital FDIC 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 a consumer accessing the page to 
notice.\25\ The FDIC believes, however, that institutions should have 
flexibility in the way they market non-deposit products and is not 
proposing specific design or size requirements for this non-deposit 
signage.
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    \25\ 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.
---------------------------------------------------------------------------

Automated Teller Machines and Similar Devices

    Section 328.4 of the proposed rule governs signage requirements for 
IDIs' automated teller machines (ATMs) and other remote electronic 
facilities that receive deposits. The FDIC seeks to ensure that 
depositors receive necessary disclosures regarding deposit insurance as 
banks continue to devise new ways to provide services outside of 
physical branches. The proposed rule intends to capture banking kiosks 
and other devices currently defined as ``Remote Service Facilities'' 
\26\ that receive deposits. This section of the proposed rule is not 
intended to address online and mobile banking channels, which are 
considered ``digital deposit-taking channels'' under the proposed rule.
---------------------------------------------------------------------------

    \26\ ``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).
---------------------------------------------------------------------------

    Under current regulations governing ATMs and like devices, IDIs 
have the option to display the physical official FDIC sign. The FDIC 
believes, however, that accurate signage across digital, mobile, and 
physical banking channels is critical to providing clear information on 
deposit insurance coverage to depositors. The proposed rule would 
require display of the official FDIC sign on IDIs' ATMs and like 
devices. The FDIC recognizes that requiring a physical sign may lead to 
formatting issues, maintenance costs, and difficulty in updating 
devices when signage requirements change. In order to accommodate those 
concerns, the proposed rule would require the electronic display of the 
official sign on the ATM or like device.
    The proposed rule provides that the official FDIC sign must be 
electronically displayed clearly and conspicuously. ATMs and like 
devices must, at a minimum, display the official FDIC sign on the home 
page or screen and each transaction page or screen relating to 
deposits.
    While ATMs and similar devices offer less of an opportunity to 
physically separate deposit products from non-deposit products, the 
proposed rule nevertheless distinguishes these products to reduce the 
potential for consumer confusion. Clear signage can be important in 
this setting because customers often interact with ATMs alone, 
including when bank branches are otherwise closed, without an 
opportunity to ask clarifying questions or for a bank representative to 
ensure that customers fully understand disclosures. As such, the 
proposed rule would require electronic non-deposit signs where an ATM 
or like device both receives deposits for an IDI and offers access to 
non-deposit products.\27\ 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 require the 
display of these disclosures on each transaction page or screen 
relating to non-deposit products.
---------------------------------------------------------------------------

    \27\ The FDIC would not view postage stamps sold at ATMs to 
require these disclosures.
---------------------------------------------------------------------------

Official Advertising Statement for IDIs

    The FDIC is proposing limited amendments to the advertisement 
statement requirements. The proposed rule would expand IDIs' options 
for use of a short advertising statement.
    Currently, IDIs must include the official advertising statement in 
all advertisements that promote deposit products. The term 
advertisement means a commercial message in any medium that is designed 
to attract public attention or patronage to a product or business.\28\ 
The FDIC views this definition to include advertising published through 
social media channels.
---------------------------------------------------------------------------

    \28\ 12 CFR 328.3(a), (c).
---------------------------------------------------------------------------

    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 Sec.  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 proposes 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.'' As a technical correction, the proposed 
rule would instead reference the standard maximum deposit insurance 
amount defined in Sec.  330.1 of the FDIC's regulations, currently 
$250,000.

Misrepresentations and Material Omissions by Any Person

    The FDIC believes that it may be beneficial to provide further 
clarity on the application of the misrepresentation statute in specific 
situations where consumers may be misled as to whether an entity is 
insured by the FDIC or the nature and extent of deposit insurance 
coverage. The FDIC is proposing 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'') and FDIC-Associated 
Terms or FDIC-Associated Images to signify that they are dealing with 
an IDI and will

[[Page 78024]]

receive the protection of deposit insurance. As noted above, however, 
the official advertising statement and FDIC-Associated Terms and FDIC-
Associated Images have increasingly been used by non-banks that purport 
to deposit their customers' funds at IDIs. The FDIC believes that use 
of the official advertisement or 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 amend Sec.  
328.102(a) 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. The FDIC believes that use of the official advertising 
statement, FDIC-Associated Terms, or FDIC-Associated Images by a non-
bank may inaccurately imply that the non-bank is FDIC-insured. For 
example, a non-bank's use of the ``Member FDIC'' logo on its website or 
in its marketing materials would be a misrepresentation unless that 
logo is next to the name of one or more IDIs. As another example, a 
non-bank's use of either the official FDIC sign or the digital sign 
that IDIs would be required to display through their digital deposit-
taking channels (under proposed Sec.  328.5) 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, 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.\29\
---------------------------------------------------------------------------

    \29\ 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 would 
violate the proposed rule.
---------------------------------------------------------------------------

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, such statements misrepresent 
the insured status of the non-bank and suggest that the FDIC's deposit 
insurance will protect consumers in the event of the non-bank's 
insolvency. To minimize risk of consumer confusion, the proposed rule 
provides 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 FDIC's view, this additional disclosure is 
necessary to prevent consumers from misinterpreting a non-bank's 
assertions regarding deposit insurance coverage. The FDIC notes that 
some non-banks already include such language on their websites, often 
identifying the partner IDI through which banking services are 
provided.\30\ The proposed rule does not prescribe specific disclosure 
language; however, it explains 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. This approach gives non-banks that wish to make statements 
regarding deposit insurance coverage some flexibility in how they 
communicate the required information.
---------------------------------------------------------------------------

    \30\ For example, ``ABC Co. is not an FDIC-insured depository 
institution; banking services provided by XYZ Bank, Member FDIC.''
---------------------------------------------------------------------------

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 consumers 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. The FDIC 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 
provides 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. For 
example, 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 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 deposit of all owners (in the aggregate) exceeds the $250,000 
limit. Pass-through insurance only applies, however, if certain 
regulatory requirements are satisfied.\31\
---------------------------------------------------------------------------

    \31\ See 12 CFR 330.5, 330.7. For pass-through deposit insurance 
to apply: (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.
---------------------------------------------------------------------------

    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 and mislead consumers and 
fail to apprise them of the risk they face in the event that the 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 the funds have been deposited 
were to fail. The FDIC believes that where parties make statements 
regarding the application of pass-through deposit insurance, additional 
disclosure is necessary to ensure that consumers are aware of this 
risk.

[[Page 78025]]

    The proposed rule provides 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. The proposed rule also does not prescribe specific 
disclosure language, providing flexibility in how parties may wish to 
express the necessary information. For example, 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.

Policies and Procedures for IDIs

    As described in this document, the FDIC is proposing changes to (1) 
its signage and advertising statement requirements for IDIs under 
subpart A and (2) clarifications to the misrepresentations rule under 
subpart B. The proposed rule would require IDIs to establish written 
policies and procedures related to these requirements that are 
commensurate with the nature, size, complexity, scope, and potential 
risk of the deposit-taking activities of the institution. As 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 
IDI's deposit-related products or services to other parties.

Signs, Advertising Statement, and Misrepresentations

    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 sign and advertisement statement requirements across all 
digital deposit-taking channels.
    Ultimately, an institution's policies and procedures would need to 
be commensurate with the nature, size, complexity, scope, and potential 
risk of its deposit-taking activities. For instance, an IDI that offers 
an array of non-deposit products and engages with consumers through a 
variety of digital channels would be expected to have more detailed and 
sophisticated policies and procedures in place than a traditional 
community bank that has a smaller presence in such products and banking 
channels.

Certain Third Party Relationships

    The FDIC recognizes that IDIs have been increasingly entering into 
business relationships with non-bank third parties to provide banking 
products and other financial services to new customers and expand the 
IDIs' access to deposits. For example, IDIs can connect with third-
party fintech companies or non-financial enterprises via application 
programming interfaces (APIs) in a business relationships often 
referred to as banking as a service (BaaS). In such cases, third 
parties make available certain IDI products and services to offer those 
products and services directly to customers. As part of these 
relationships, third parties often use marketing materials that may 
include representations about the availability of FDIC insurance for 
certain products. In essence, from the customer's perspective, the 
third parties perform the same functions that the bank would typically 
perform through its own deposit-taking channels (e.g., branches, which 
were contemplated under section 18(a)(1) of the FDI Act).\32\
---------------------------------------------------------------------------

    \32\ 12 U.S.C. 1828(a)(1).
---------------------------------------------------------------------------

    To the extent a third party has a business relationships 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, under the proposed rule, and as 
appropriate, IDIs would 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. 
Having policies and procedures in place relating to certain third party 
relationships is critical to mitigating 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.
    To the extent an IDI has a business relationship with a third party 
that provides deposit related services, it would include reasonable 
provisions in its policies and procedures to ensure the marketing and 
advertising materials provided to prospective depositors by that third 
party do not misrepresent the insurability of financial products. This 
includes, for example, policies related to training staff to review the 
marketing and advertising materials to evaluate whether such materials 
contain misrepresentations about deposit insurance.
    Further, as appropriate to the potential risk, an IDI should 
consider policies and procedures related to steps that the IDI might 
take to mitigate its risk were the third party to misrepresent deposit 
insurance and therefore cause potential consumer confusion and harm 
about a product provided by the IDI.
    The policies and procedures related to certain third parties would 
be commensurate with the nature, size, complexity, scope, and potential 
risk of the deposit-taking activities. With regard to third party 
relationships, IDIs would be expected to focus on the relationships 
that pose a higher degree of risk to consumers. 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. Moreover, 
during this time, the third party has been appropriately representing 
deposit insurance. In other cases, the IDI may be involved in nascent 
relationships that are less established, and involve novel arrangements 
such that consumers may not fully appreciate how deposit insurance may 
or may not apply to the IDI products and services that are being 
offered. Assuming all other relevant factors are equal, it would be 
reasonable for an IDI to view the former relationship as lower risk 
vis-[agrave]-vis the latter, which would be considered higher risk. 
Accordingly, in this instance, it would be appropriate for an IDI to 
focus its policies and procedures on the higher-risk relationship, as 
the activities performed via that relationship pose a higher risk of 
deposit insurance misrepresentation and potential consumer harm.
    It would also be prudent for policies and procedures to include 
ensuring that

[[Page 78026]]

third parties that provide marketing or joint marketing services, web 
and other electronic channel design, or similar services, are aware of 
the IDIs compliance policies under part 328.

Reservation of Authority

    The proposed rule also provides that the FDIC would reserve the 
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.

Crypto-Assets

    Among other things, part 328 currently prohibits any person from 
representing or implying that any Uninsured Financial Product is 
insured or guaranteed by the FDIC.\33\ This prohibition applies to 
advertisements, publications, and other disseminations of information. 
The FDIC has recently noted a number of misrepresentations of insurance 
coverage and crypto-assets,\34\ and believes that part 328 should be 
amended to make clear that representations concerning crypto-assets 
fall within its scope. Accordingly, the proposed rule would amend the 
definitions of ``Non-Deposit Product'' and ``Uninsured Financial 
Product'' in subpart B to include crypto-assets and define crypto-asset 
as ``any digital asset implemented using cryptographic techniques.'' 
This would include a digital asset that is a digital representation of 
value that functions as a medium of exchange, a unit of account, and, 
or a store of value; as well as a digital asset that has an equivalent 
value in and is convertible to real currency, or that acts as a 
substitute for real currency and is not legal tender.
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    \33\ ``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.
    \34\ 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).
---------------------------------------------------------------------------

    The proposed rule also includes crypto-assets in subpart A's 
definition of ``non-deposit product,'' using the definition of 
``crypto-asset'' described above. Accordingly, the non-deposit sign 
requirements proposed in subpart A would apply to crypto-assets. For 
example, if an IDI's ATM offered customers the ability to purchase 
crypto-assets, the ATM would be required to clearly, continuously, and 
conspicuously display disclosures indicating that the crypto-assets: 
are not insured by the FDIC; are not deposits; and may lose value.

Expected Effects

Costs

    The costs of the proposed rule would be incurred by IDIs, as well 
as some non-bank entities that may need to update disclosures or 
marketing materials. This section addresses these two groups 
separately.

Costs to IDIs

    According to data from recent Reports of Condition and Income (Call 
Reports), the FDIC insures the deposits of 4,780 IDIs operating 
approximately 80 thousand branches in the United States.\35\ These IDIs 
are currently subject to the existing requirements of part 328, so the 
costs incurred by these IDIs by the proposed rule would be limited to 
activities to ensure compliance with the new provisions in the proposed 
rule and ameliorated by the extent to which IDIs are already complying 
with the new provisions. These activities include updating the display 
of FDIC signs in both physical and digital locations where deposits are 
normally received (including ATMs and websites), creating and 
maintaining signs for non-deposit products, segregating areas related 
to the sale of non-deposit products from areas where insured deposits 
are normally received, and ensuring that FDIC signs are not displayed 
in close proximity with non-deposit product signs.
---------------------------------------------------------------------------

    \35\ Call Reports as of June 30, 2022.
---------------------------------------------------------------------------

    Data on the costs of updating the displays of signs and segregating 
physical areas within bank premises are unavailable, but the FDIC 
expects these costs would depend on the number of branches operated by 
each IDI as well as the complexities of each IDI's branches. The FDIC 
expects that larger banks are more likely to have branches that are 
nontraditional, complex, and/or offer both deposit and non-deposit 
products. For purposes of the proposed rule, the FDIC estimates that 
IDIs with less than $10 billion in assets would spend approximately one 
hour per year to complete these activities at each branch while IDIs 
with at least $10 billion in total consolidated assets (assets) would 
spend approximately two hours per year per branch, for a total annual 
burden of approximately 120 thousand hours per year across all IDIs 
\36\ at an annual cost of approximately $10 million.\37\
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    \36\ According to Call Reports as of June 30, 2022, there were 
4,619 IDIs with assets less than $10 billion operating 33,895 
branches and 161 IDIs with assets at least $10 billion operating 
45,372 branches.
    \37\ Dollar costs for this analysis are based on a $81.12 total 
hourly cost of compensation, a weighted average of the 75th 
percentile hourly wages reported by the Bureau of Labor Statistics 
(BLS) National Industry-Specific Occupational Employment and Wage 
Estimates (OEWS) across five occupational groups in the Depository 
Credit Intermediation sector, as of May 2021, and adjusted by 1.51 
to include non-wage compensation and 1.08 to account for the change 
in the seasonally adjusted Employment Cost Index for the Credit 
Intermediation and Related Activities sector (NAICS Code 522) 
between March 2021 and June 2022. For this analysis, the FDIC uses 
the following estimated occupational burden weights and occupational 
hourly labor costs: 14.4 percent for executives and managers at 
$132.10 per hour, 4.3 percent for lawyers at $163.63 per hour, 36.5 
percent for compliance officers at $63.78 per hour, 25.5 percent for 
IT professionals at $101.32 per hour, and 19.3 percent for clerical 
workers at $37.34 per hour.
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    The costs of complying with the proposed rule's requirements for 
digital deposit-taking channels would also depend on the complexities 
of each IDI's digital deposit-taking operations. The FDIC expects that 
larger banks are more likely to have more complex digital operations or 
offer both deposit and non-deposit products through their digital 
deposit-taking operations. For purposes of the proposed rule, the FDIC 
estimates that, on average, IDIs would incur a one-time burden of sixty 
hours to update their digital operations to incorporate the 
requirements in the proposed rule, at an approximately cost of $23 
million for the industry.\38\ The FDIC also estimates that, in years 
subsequent to the enactment of the proposed rule, IDIs with less than 
$10 billion in assets would spend approximately ten additional hours 
per year to comply with the digital deposit-taking operation 
requirements of the proposed rule, while IDIs with at least $10 billion 
in assets would spend approximately twenty additional hours per year, 
at an annual cost of approximately $4 million for the industry.\39\
---------------------------------------------------------------------------

    \38\ According to Call Reports as of June 30, 2022. $23 million 
= 4,780 IDIs x 60 hours per IDI x $81.12 per hour.
    \39\ According to Call Reports as of June 30, 2022. $4 million = 
4,619 IDIs x 10 hours per IDI x $81.12 per hour + 161 IDIs x 20 
hours per IDI x $81.12 per hour.
---------------------------------------------------------------------------

    Finally, all IDIs must update their policies and procedures to 
comply with the proposed rule. These policies and procedures would 
include, as appropriate, provisions related to monitoring and 
evaluating whether certain third parties are in compliance with subpart 
B. The FDIC recognizes that the costs to implement and maintain these 
policies and procedures will vary across IDIs in ways that depend on 
the specifics of each IDI's operations or relationships with certain 
third parties. For purposes of the proposed rule, the FDIC estimates 
that, on average, IDIs would incur a one-time

[[Page 78027]]

burden of eighty hours to update their policies and procedures to 
incorporate the requirements in the proposed rule, at an approximately 
cost of $31 million for the industry.\40\ The FDIC also estimates that, 
in years subsequent to the enactment of the proposed rule, IDIs would 
spend, on average, approximately seventeen additional hours per year to 
ensure that their policies and procedures maintain compliance with the 
proposed rule,\41\ at an annual cost of approximately $7 million for 
the industry.\42\ Based on the preceding analysis, the FDIC expects 
that, if the proposed rule were to be adopted, the banking industry 
would incur approximately $64 million in the first year after adoption 
and approximately $21 million in each subsequent year to comply with 
the proposed amendments to part 328.
---------------------------------------------------------------------------

    \40\ According to Call Reports as of June 30, 2022. $31 million 
= 4,780 IDIs x 80 hours per IDI x $81.12 per hour.
    \41\ The FDIC estimates that twelve of the seventeen hours are 
recordkeeping costs under the Paperwork Reduction Act. The five 
remaining hours are regulatory costs of compliance that are not 
under the Paperwork Reduction Act.
    \42\ According to Call Reports as of June 30, 2022. $7 million = 
4,780 IDIs x 17 hours per IDI x $81.12 per hour.
---------------------------------------------------------------------------

Costs to Non-Bank Entities

    The FDIC does not have direct data on the number of non-bank 
entities that would be affected by the proposed rule. FDIC staff 
believe that the non-bank entities affected by the requirement would 
generally be classified in the following North American Industry 
Classification System (NAICS) industries: Miscellaneous Financial 
Investment Activities (NAICS Code 523999), Financial Transaction 
Processing, Reserve & Clearinghouse Activities (NAICS Code 522320), 
Computer System Design and Related Services (NAICS Code 5415), and 
Investment Advice (NAICS Code 523930). According to recent Census data, 
there were 144,556 firms in these NAICS industries in 2019, the most 
recent year for which such data is available.\43\ However, not all of 
these firms enter into agreements with IDIs or otherwise engage in 
operations related to insured deposits; FDIC staff believe that the 
number of non-bank entities engaged in such operations would be 
considerably less than the number of IDIs. For purposes of the proposed 
rule, the FDIC estimates that the number of affected non-bank entities 
would be approximately one percent of firms in the NAICS industries 
listed above. Therefore, the FDIC estimates that approximately 1,500 
non-bank entities would be affected by the proposed rule.
---------------------------------------------------------------------------

    \43\ (1,110 + 3,163 + 120,070 + 20,213 = 144,556) 2019 County 
Business Patterns. See number of firms available at: https://www.census.gov/data/tables/2019/econ/susb/2019-susb-annual.html, 
last retrieved on June 30, 2022.
---------------------------------------------------------------------------

    Nonbanks have been statutorily prohibited from falsely representing 
that uninsured financial products are FDIC-insured for many years. 
Thus, the proposed rule would not create a new prohibition on such 
misrepresentations, but would clarify the types of communications that 
can materially misrepresent deposit insurance coverage. The nonbank 
entities affected by the proposed rule may need to update their 
disclosures and marketing materials to ensure that they neither mis-use 
the FDIC's official sign or any FDIC-associated terms or images, nor 
omit or fail to clearly and conspicuously disclose material information 
that could lead to a reasonable consumer being unable to understand the 
extent or manner of deposit insurance provided. For purposes of the 
proposed rule, the FDIC estimates that, on average, each nonbank entity 
would spend an additional thirty minutes per year to comply with the 
proposed amendments to subpart B., for a total cost of approximately 
$60 thousand per year across all nonbank entities affected by the 
rule.\44\
---------------------------------------------------------------------------

    \44\ $7 million = 1,500 non-bank entities x 0.5 hours per IDI x 
$81.12 per hour.
---------------------------------------------------------------------------

Benefits

    Provided that affected entities are not already complying with 
certain aspects of the proposed rule, it would, if adopted, produce 
benefits for the banking industry as well as the general public by 
providing clarity, and requiring affected entities to provide such 
clarity, to consumers about the extent to which or the manner in which 
products are insured by the FDIC. This clarity would help consumers to 
more clearly understand when they are conducting business with IDIs and 
when their funds are protected by the FDIC's deposit insurance, thereby 
helping them avoid incurring financial losses as a result of investing 
in products they mistakenly thought were FDIC-insured. The proposed 
rule would reduce ambiguity about the nature of deposit insurance in 
situations where non-deposit products are offered by IDIs, where 
insured deposits are advertised by non-bank entities, or where both 
non-deposit products and deposit products are offered at the same 
premise. The proposed rule would also extend these benefits to digital 
deposit-taking channels where physical segregation is not possible. The 
proposed rule would also require the clear, conspicuous, and consistent 
use of the official FDIC sign and symbol in both physical and digital 
locations. These requirements would facilitate consumers' recognition 
of the FDIC's guarantee and reassure them of the nature of deposit 
insurance for those products. This effect will reinforce the role of 
FDIC deposit insurance and bolster confidence in the U.S. banking 
sector.
    As discussed previously, the proposed rule would further clarify 
the FDIC's procedures for evaluating potential violations of section 
18(a)(4). The proposed rule would generally be consistent with existing 
practices used by the FDIC with respect to these matters. Furthermore, 
the proposed rule, if adopted, would not affect the application of 
related criminal prohibitions under 18 U.S.C. 709. Therefore, the FDIC 
believes that this aspect of the proposed rule is unlikely to have any 
significant effect on formal or informal enforcement of the section 
18(a)(4) prohibitions.
    By providing the clarity described above, the FDIC believes the 
proposed rule would curtail instances in which IDIs or non-bank 
entities potentially misuse or misrepresent the FDIC's name or 
logo.\45\ When such an instance is made public,\46\ the resulting 
public discourse may increase consumer uncertainty as to whether their 
own funds are protected by the FDIC's deposit insurance. Consumers' 
uncertainty as to the safety of their funds may weaken the confidence 
that underpins banks and our nation's broader financial system. The 
proposed rule would reduce the frequency of these types of instances 
going forward. The FDIC does not have the data to quantity the cost 
savings of this effect, but expects that the reduction in such 
instances would strengthen public confidence in the FDIC deposit 
insurance and the nation's banking system.
---------------------------------------------------------------------------

    \45\ There have been at least 165 such instances recently--see 
FDIC 2019 Annual Report, p. 38 and FDIC 2020 Annual Report, p. 47.
    \46\ See, for example, a recent incident of a misrepresentation 
of FDIC deposit insurance status at https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20220728a1.pdf.
---------------------------------------------------------------------------

    The FDIC invites comments on all aspects of this Expected Effects 
section. In particular, are there any effects of the proposed rule that 
have not been identified?

Alternatives Considered

    The FDIC has considered a number of alternatives to the proposed 
rule that could meet its objectives in this rulemaking, including 
proposals

[[Page 78028]]

suggested by commenters in response to the 2020 and 2021 RFIs. Some of 
these alternatives are described below. For the reasons described, the 
FDIC views the proposed rule as the most appropriate and effective 
means of achieving its policy objectives with respect to part 328.

Alternatives to Digital Official Sign for Digital Deposit-Taking 
Channels

    With respect to digital deposit-taking channels, the FDIC 
considered alternatives to the digital official sign required by the 
proposed rule, including plain text signage and disclosure 
requirements.\47\ As discussed above, the proposed digital sign is 
intended to quickly and visually convey to consumers that they are 
dealing directly with an IDI rather than a non-bank entity. This 
distinction is critical to understanding the risks a consumer faces, 
and the FDIC believes that it warrants a requirement for consistent 
visual signage. Plain text signage or disclosures would not achieve 
this objective as effectively.
---------------------------------------------------------------------------

    \47\ See e.g., Hancock Whitney Bank Comment Letter to 2021 RFI 
(May 24, 2021); Kasasa Comment Letter to 2020 RFI (March 24, 2020) 
(stating that the official sign should not be required on an IDI's 
website or mobile applications but suggests requiring, at minimum, 
the FDIC advertising statement on certain pages).
---------------------------------------------------------------------------

Official Advertising Statement Requirements--Allow ``One-Click-Away'' 
Disclosures

    Some commenters recommended that the FDIC adopt a ``one click 
away'' approach for electronic or digital advertisements (where the 
advertising statement may not be immediately visible to consumers but 
could be reached through one mouse click) in order to permit greater 
flexibility in advertising formats.\48\ The FDIC believes that the 
proposed rule better meets its objectives, as a ``one click away'' 
approach places the burden on consumers to obtain the necessary 
information and makes it less likely that they will do so. In addition, 
the advertising statement options available to IDIs under the proposed 
rule allow significant flexibility in advertising formats, as IDIs 
could use short titles including ``Member of FDIC,'' ``Member FDIC,'' 
or ``FDIC-insured.'' The FDIC believes that these options would be 
sufficient to permit advertising flexibility.
---------------------------------------------------------------------------

    \48\ See Hancock Whitney Bank Comment Letter to 2021 RFI (May 
24, 2021); American Bankers Association and Bank Policy Institute 
joint comment letter to 2021 RFI (May 21, 2021); Kasasa Comment 
Letter to 2020 RFI (March 24, 2020).
---------------------------------------------------------------------------

Administrative Law Matters

Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) generally requires an agency, 
in connection with a proposed rule, to prepare and make available for 
public comment an initial regulatory flexibility analysis that 
describes the impact of a proposed rule on small entities.\49\ However, 
a regulatory flexibility analysis is not required if the agency 
certifies that the rule will not have a significant economic impact on 
a substantial number of small entities. The Small Business 
Administration (SBA) has defined ``small entities'' to include banking 
organizations with total assets of less than or equal to $750 
million.\50\ Generally, the FDIC considers a significant effect to be a 
quantified effect in excess of 5 percent of total annual salaries and 
benefits per institution, or 2.5 percent of total noninterest expenses. 
The FDIC believes that effects in excess of these thresholds typically 
represent significant effects for FDIC-supervised institutions. For the 
reasons described below, the FDIC certifies that the proposed rule will 
not have a significant economic impact on a substantial number of small 
entities.
---------------------------------------------------------------------------

    \49\ 5 U.S.C. 601 et seq.
    \50\ The SBA defines a small banking organization as having $750 
million or less in assets, where an organization's ``assets are 
determined by averaging the assets reported on its four quarterly 
financial statements for the preceding year.'' See 13 CFR 121.201 
(as amended by 87 FR 18627, effective May 2, 2022). In its 
determination, the ``SBA counts the receipts, employees, or other 
measure of size of the concern whose size is at issue and all of its 
domestic and foreign affiliates.'' See 13 CFR 121.103. Following 
these regulations, the FDIC uses a covered entity's affiliated and 
acquired assets, averaged over the preceding four quarters, to 
determine whether the covered entity is ``small'' for the purposes 
of RFA.
---------------------------------------------------------------------------

    As described in the Expected Effects section, the proposed rule is 
expected to affect all institutions whose deposits are insured by the 
FDIC, as well as non-bank entities who may potentially use the official 
FDIC sign, advertising statements, or otherwise make representations 
that their products are insured or guaranteed by the FDIC. According to 
recent Call Reports, there are 4,780 FDIC-insured IDIs.\51\ Of these, 
approximately 3,394 would be considered small entities for the purposes 
of RFA.\52\ These small IDIs operate approximately 13 thousand deposit-
taking offices. The number of deposit-taking offices for each IDI range 
from 1 to 21. As discussed in the Expected Effects section, the FDIC 
expects affected IDIs with less than $10 billion in assets, which are 
likely to have less complex deposit-taking operations and fewer offices 
than larger IDIs, would spend, on average, 60 hours to update their 
digital operations, 80 hours to implement policies and procedures, and 
seven hours to update physical signage at branches in the first year. 
At average labor costs of $81.12 per hour, the expected first-year 
costs of complying with the proposed rule would average less than a 
percent of the small IDIs' total annual salaries and benefits. These 
expected first-year costs would exceed five percent of the total annual 
salaries and benefits for only 20 small IDIs (comprising less than one 
percent of the total number of affected small IDIs). For subsequent 
years, the costs of maintaining compliance are even smaller. Thus, the 
proposed rule would not significantly affect a substantial numbers of 
small IDIs.
---------------------------------------------------------------------------

    \51\ FDIC Call Reports, June 30, 2020.
    \52\ Id.
---------------------------------------------------------------------------

    As described in the Expected Effects section, the FDIC estimates 
that 1,500 non-bank entities would be affected by this proposed rule. 
The FDIC does not have data on the number of non-bank entities that 
would be considered small entities for the purposes of RFA. As a 
conservative estimate, the FDIC assumes all 1,500 affected non-bank 
entities are small. As discussed in the Expected Effects section, the 
FDIC estimates that each non-bank entity would incur an additional 30 
minutes per year to comply with the proposed amendments to subpart B. 
At an estimated compensation rate of $81.12, the expected costs of 
complying with the proposed rule would be less than $100 per year per 
non-bank small entity.
    The proposed rule may also affect private individuals who may 
potentially misuse the FDIC name or logo or may potentially 
misrepresent the nature of deposit insurance. Private individuals are 
not considered ``small entities'' under the RFA.
    Given that the expected costs of the proposed rule would be 
relatively small, the FDIC certifies that the proposed rule would not 
have a significant economic impact on a substantial number of small 
entities. The FDIC invites comments on all aspects of the supporting 
information provided in this RFA section. In particular, would this 
proposed rule have any significant effects on small entities that the 
FDIC has not identified?

Paperwork Reduction Act

    In accordance with the requirements of the Paperwork Reduction Act 
of 1995 (PRA) (44 U.S.C. 3501-3521), the FDIC may not conduct or 
sponsor, and a respondent is not required to respond to, an information 
collection unless it displays a currently valid Office of Management 
and Budget (OMB) control

[[Page 78029]]

number. Certain provisions of the proposed rule contain ``collection of 
information'' requirements within the meaning of the PRA.\53\ The 
information collection requirements (IC) contained in this notice of 
proposed rulemaking have been submitted to OMB for review and approval 
by FDIC under section 3507(d) of the PRA and Sec.  1320.11 of OMB's 
implementing regulations (5 CFR part 1320) as a new information 
collection.
---------------------------------------------------------------------------

    \53\ Information collection is defined under OMB's regulations 
at 5 CFR 1320(c). Certain requirements in part 328 for public 
disclosure of the FDIC name and/or logo are not information 
collections. See 5 CFR 1320(c)(2).
---------------------------------------------------------------------------

    Title of Proposed Information Collection: Disclosure, Recordkeeping 
and Reporting Requirements Related to FDIC's Official Sign and 
Advertising Requirements, False Advertising, Misrepresentation of 
Insured Status, and Misuse of the FDIC's Name or Logo.
    OMB Control Number: 3064-[NEW].
    Affected Public: Businesses or other for-profit.
    Respondents: Any FDIC-insured depository institution and persons 
that provide deposit-related services to insured depository 
institutions or offer insured depository institution's deposit-related 
products or services to other parties.
    Estimated Annual Burden:
    The proposed rule contains the following ten (10) information 
collection requirements:
    1. Signs within Institution Premises--Banks <$10B, 12 CFR 328.3 
(Third-Party Disclosure; Mandatory). Proposed Sec.  328.3 would impose 
PRA third-party disclosure burden governing signage within the premises 
of insured depository institutions. This burden is associated with the 
display of signage for non-deposit products, segregating areas offering 
non-deposit products, and the use of electronic media. The FDIC 
believes the hourly burden for these activities differ among 
respondents. For purposes of PRA, the FDIC would split the burden into 
two information collection categories: one for banks with less than $10 
billion in total consolidated assets (assets) and one for banks with at 
least $10 billion in assets. This IC captures the burden for the former 
group.
    2. Signs within Institution Premises--Banks $10B, 12 CFR 
328.3 (Third-Party Disclosure; Mandatory). Proposed Sec.  328.3 would 
impose PRA third-party disclosure burden governing signage within the 
premises of insured depository institutions. This burden is associated 
with the display of signage for non-deposit products, segregating areas 
offering non-deposit products, and the use of electronic media. The 
FDIC believes the hourly burden for these activities differ among 
respondents. For purposes of PRA, the FDIC would split the burden into 
two ICs: one for banks with less than $10 billion in total consolidated 
assets (assets) and one for banks with at least $10 billion in assets. 
This IC captures the burden for the latter group.
    3. Signage for ATMs and Digital Deposit-taking Channels--
Implementation, 12 CFR 328.4 and 328.5 (Third-Party Disclosure; 
Mandatory). Proposed Sec. Sec.  328.4 and 328.5 would impose PRA third-
party disclosure burden governing signs for ATMs as well as digital 
deposit-taking channels. This burden is associated with the display of 
signage for both deposit and non-deposit products. The FDIC believes 
banks will incur burdens in the first year to update their digital 
channels to incorporate the amended requirements in the proposed rule. 
This IC captures the burden for these implementation activities.
    4. Signage for ATMs and Digital Deposit-taking Channels--Banks 
<$10B-Ongoing, 12 CFR 328.4 and 328.5 (Third-Party Disclosure; 
Mandatory). Proposed Sec. Sec.  328.4 and 328.5 would impose PRA third-
party disclosure burden governing signs for ATMs as well as digital 
deposit-taking channels. This burden is associated with the display of 
signage for deposit and non-deposit products. The FDIC believes that, 
in years subsequent to implementation, banks would incur ongoing 
burdens to update and maintain their digital channels to ensure 
continual compliance with the requirements in the proposed rule. For 
purposes of PRA, the FDIC would split this ongoing burden into two ICs: 
one for banks with less than $10 billion in total consolidated assets 
(assets) and one for banks with at least $10 billion in assets. This IC 
captures the burden for the former group.
    5. Signage for ATMs and Digital Deposit-taking Channels--Banks 
=$10B-Ongoing, 12 CFR 328.4 and 328.5 (Third-Party 
Disclosure; Mandatory). Proposed Sec. Sec.  328.4 and 328.5 would 
impose PRA third-party disclosure burden governing signs for ATMs as 
well as digital deposit-taking channels. This burden is associated with 
the display of signage for deposit and non-deposit products. The FDIC 
believes that, in years subsequent to implementation, banks would incur 
ongoing burdens to update and maintain their digital channels to ensure 
continual compliance with the requirements in the proposed rule. For 
purposes of PRA, the FDIC would split the burden into two ICs: one for 
banks with less than $10 billion in total consolidated assets (assets) 
and one for banks with at least $10 billion in assets. This IC captures 
the burden for the latter group.
    6. Policies and Procedures--Implementation, 12 CFR 328.8 
(Recordkeeping; Mandatory). Proposed Sec.  328.8 would require IDIs to 
establish and maintain written policies and procedures to achieve 
compliance with part 328 including provisions related to monitor and 
evaluate the activities of persons that provide deposit-related 
services to the IDI or offer the IDI's deposit-related products or 
services to other parties. The FDIC believes the hourly burden for 
these activities can be categorized into two distinct ICs covering (1) 
implementation burdens incurred in the first year in which the policies 
and procedures are implemented and (2) ongoing burden incurred every 
subsequent year to maintain compliance. This IC captures the 
implementation burden.
    7. Policies and Procedures--Ongoing, 12 CFR 328.8 (Recordkeeping; 
Mandatory). Proposed Sec.  328.8 would require IDIs to establish and 
maintain written policies and procedures to achieve compliance with 
part 328 including provisions related to monitoring and evaluating the 
activities of persons that provide deposit-related services to the 
Insured Depository Institution or offer the Insured Depository 
Institution's deposit-related products or services to other parties. 
The FDIC believes the hourly burden for these activities can be 
categorized into two distinct ICs covering (1) implementation burdens 
incurred in the first year in which the policies and procedures are 
implemented and (2) ongoing burden incurred every subsequent year to 
maintain compliance. This IC captures the ongoing burden.
    8. Insured Depository Institution Relationships--Implementation 12 
CFR 328.102(b)(5) (Third-Party Disclosure; Mandatory). Proposed Sec.  
328.102(b)(5) would require covered non-bank entities to ensure that 
their public statements regarding deposit insurance comply with the 
requirements in part 328. The FDIC believes the hourly burden for these 
activities can be categorized into two distinct ICs covering (1) 
implementation burdens incurred in the first year in which the public 
statements are amended and (2) ongoing burden incurred every subsequent 
year to ensure continual compliance. This IC captures the 
implementation burden.
    9. Insured Depository Institution Relationships--Ongoing 12 CFR

[[Page 78030]]

328.102(b)(5) (Third-Party Disclosure; Mandatory). Proposed Sec.  
328.102(b)(5) would require covered non-bank entities to ensure that 
their public statements regarding deposit insurance comply with the 
requirements in part 328. The FDIC believes the hourly burden for these 
activities can be categorized into two distinct ICs covering (1) 
implementation burdens incurred in the first year in which the public 
statements are amended and (2) ongoing burden incurred every subsequent 
year to ensure continual compliance. This IC captures the ongoing 
burden.
    10. Request for Consent to Use Non-English Language Advertising 
Statement--12 CFR 328.3(f), proposed 12 CFR 328.6(f) (Reporting; 
Required to Obtain or Retain a Benefit). Existing Sec.  328.3(f), which 
the proposed rule moves to Sec.  328.6(f), requires IDIs to obtain 
prior written approval of the FDIC before using a non-English 
equivalent of the official FDIC advertising statement in an 
advertisement.

Methodology and Assumptions

Estimated Annual Number of Respondents

    ICs 1-7 and IC 10 capture PRA burdens incurred by insured 
depository institutions (IDIs). According to recent Reports of 
Condition and Income (Call Reports), the FDIC supervised approximately 
4,780 insured depository institutions (FDIC-supervised IDIs).\54\ These 
include 161 IDIs with assets at least $10 billion and 4,619 IDIs 
entities with assets less than $10 billion. Of these, 3,394 IDIs are 
considered small entities for purposes of the Regulatory Flexibility 
Act.\55\
---------------------------------------------------------------------------

    \54\ See FDIC Call Reports, June 30, 2022.
    \55\ The SBA defines a small banking organization as having $750 
million or less in assets, where an organization's ``assets are 
determined by averaging the assets reported on its four quarterly 
financial statements for the preceding year.'' See 13 CFR 121.201 
(as amended by 87 FR 18627, effective May 2, 2022). In its 
determination, the ``SBA counts the receipts, employees, or other 
measure of size of the concern whose size is at issue and all of its 
domestic and foreign affiliates.'' See 13 CFR 121.103. Following 
these regulations, the FDIC uses an IDI's affiliated and acquired 
assets, averaged over the preceding four quarters, to determine 
whether the IDI is ``small'' for the purposes of RFA.
---------------------------------------------------------------------------

    IC 1 captures PRA burdens incurred by all IDIs with less than $10 
billion in assets, and IC 2 captures PRA burdens incurred by all IDIs 
with at least $10 billion in assets. Using the Call Report data 
summarized above, FDIC estimates 4,169 annual respondents for IC 1 and 
161 annual respondents for IC 2.
    ICs 3 and 6 capture implementation burdens incurred by all 4,780 
IDIs. Implementation burdens are incurred in the first year after the 
proposed rule would become effective. Given that this information 
collection request (ICR) covers PRA burdens over three years, FDIC 
annualize the counts of respondents by dividing the total number of 
respondents by three. Thus, FDIC estimates 1,593 annual respondents for 
ICs 3 and 6.
    ICs 4, 5, and 7 capture the ongoing PRA burdens incurred by the 
4,169 IDIs with less than $10 billion in assets, the 161 IDIs with at 
least $10 billion in assets, and all 4,780 IDIs, respectively. Ongoing 
burdens are incurred in two of the three years after the proposed rule 
would become effective. FDIC annualizes the counts of respondents 
accordingly. Thus, FDIC estimates 3,080 annual respondents for IC 4, 
107 annual respondents for IC 5 and 3,187 annual respondents for IC 7.
    ICs 8 and 9 capture PRA requirements incurred by non-bank entities. 
The FDIC does not have direct data on the number of non-bank entities 
that would be subject to part 328. FDIC assumes that the affected non-
bank entities would generally be classified in the following North 
American Industry Classification System (NAICS) industries: 
Miscellaneous Financial Investment Activities (NAICS Code 523999), 
Financial Transaction Processing, Reserve & Clearinghouse Activities 
(NAICS Code 522320), Computer System Design and Related Services (NAICS 
Code 5415), and Investment Advice (NAICS Code 523930). According to 
recent Census data, there were 144,556 firms in these NAICS industries 
in 2019, the most recent year for which such data is available.\56\ 
However, not all of these firms enter into agreements with IDIs or 
otherwise engage in operations related to insured deposits; FDIC 
assumes that the number of non-bank entities engaged in such operations 
would be considerably less than the number of IDIs. For purposes of 
this estimation, the FDIC assumes that the number of covered non-bank 
entities would be approximately one percent of firms in the NAICS 
industries listed above. Therefore, FDIC estimates that approximately 
1,500 non-bank entities would incur burdens associated with part 328. 
ICs 8 and 9 are implementation and ongoing burdens, respectively. FDIC 
annualizes the count of respondents accordingly. Thus, FDIC estimates 
500 annual respondents for IC 8 and 1,000 annual respondents for IC 9.
---------------------------------------------------------------------------

    \56\ (1,110 + 3,163 + 120,070 + 20,213 = 144,556) 2019 County 
Business Patterns. See number of firms at https://www.census.gov/data/tables/2019/econ/susb/2019-susb-annual.html, last retrieved on 
June 30, 2022.
---------------------------------------------------------------------------

    IC 10 captures PRA requirements incurred by IDIs that submit 
requests to the FDIC for the use of a non-English equivalent of the 
official FDIC advertising statement. The FDIC does not have data on the 
historical annual number of such requests submitted. However, the FDIC 
has not handled such a request since at least January 1, 2021 and 
believes it is unlikely that such a request from an IDI would be 
received within the next three years. Since OMB's system of record for 
PRA burdens does not allow non-positive respondent counts, FDIC uses an 
annual respondent of one for IC 10 to preserve the estimated burden 
calculations.

Estimated Annual Number of Responses per Respondent

    ICs 1 and 2 capture the activities that respondents undertake at 
each of their branches to comply with the PRA requirements in 12 CFR 
328.3. For purposes of this ICR, FDIC designates the activities at a 
single branch as a single response by the respondent. According to 
recent Call Reports, IDIs with assets less than $10 billion operate 
approximately 7 branches each, on average, while IDIs with assets of at 
least $10 billion have approximately 282 branches each, on average.\57\ 
Accordingly, FDIC estimates 7 responses per year for IC 1 and 282 
responses per year for IC 2.
---------------------------------------------------------------------------

    \57\ According to Call Reports as of June 30, 2022, there were 
4,619 banks with assets less than $10 billion operating 33,895 
branches and 161 IDIs with assets at least $10 billion operating 
45,372 branches.
---------------------------------------------------------------------------

    For ICs 3-10, the activities that respondents undergo throughout 
the year to comply with the PRA requirements in each IC can all be 
considered part of a single annual response to that IC. Therefore, FDIC 
uses one as the number of annual responses per respondent for these 
ICs.

Estimated Burden Hours per Response

    ICs 1 and 2 capture the third-party disclosure burden of ensuring 
that signage within the premises of insured depository institutions 
comply with part 328. Data on this burden are unavailable. The FDIC 
assumes that larger banks are more likely to have branches that are 
nontraditional, complex, and/or offer both deposit and non-deposit 
products. While smaller IDIs are more likely to operate simple branches 
that offer only deposit products and may not require extensive 
revisions of signage, those that do may require updates to their 
designated areas. For purposes of this ICR, FDIC

[[Page 78031]]

estimates the burden would be approximately one hour per branch, on 
average, for institutions with less than $10 billion in assets and 
approximately two hours per branch, on average, for institutions with 
at least $10 billion in assets. Accordingly, FDIC estimates burdens as 
one hour per response for IC 1 and two hours per response for IC 2.
    ICs 3, 4, and 5 capture the third-party disclosure burden of 
ensuring that signs for ATMs and digital deposit-taking channels with 
part 328. Data on this burden are unavailable. The FDIC assumes that 
larger banks are more likely to have more complex digital operations or 
offer both deposit and non-deposit products through their digital 
deposit-taking operations. However, these larger banks may also have 
permanent IT teams in place that could facilitate and/or reduce the 
hourly burden of these changes. Conversely, for smaller banks relying 
on third-party web service providers, many may be seeking compliance 
through the same channel as others, which could create a backlog of 
work on the third party web service providers, making it so other small 
banks experience a delay in compliance timelines. For purposes of this 
ICR, FDIC assumes that each IDI will spend 60 hours, on average, in the 
first year to implement the changes to its ATM and digital deposit-
taking channels to comply with part 328. In subsequent years, IDIs with 
less than $10 billion in assets would spend approximately 10 additional 
hours per year, on average, to maintain ongoing compliance, while IDIs 
with at least $10 billion in assets would spend approximately 20 
additional hours per year, on average, to maintain ongoing compliance. 
As such, FDIC estimates burdens as 60 hours per response for IC 3, 10 
hours per response for IC 4, and 20 hours per response for IC 5.
    ICs 6 and 7 capture the recordkeeping burden of ensuring that the 
IDIs' policies and procedures comply with part 328. FDIC assumes the 
recordkeeping burden imposed relates to documenting the development of 
policies and procedures by compliance officers and senior management 
that would be appropriate to the institution's risk profile. This 
program would then be reviewed, revised, and then approved by the board 
of directors or other executives at the institution. In addition, part 
238 requires that IDIs monitor and evaluate certain third parties to 
ensure that these third parties are also in compliance with part 328. 
Additional recordkeeping burden would be incurred in documenting the 
results of such monitoring activities. Data on the hourly burden of 
these activities are unavailable. For purposes of this ICR, the FDIC 
assumes that each IDI, on average, would spend approximately 80 hours 
in the first year to establish and/or implement policies and 
approximately 12 hours in each subsequent year to revise and update 
these documents. FDIC estimates burdens as 80 hours per response for IC 
6 and 12 hours per response for IC 7.
    ICs 8 and 9 capture the burden of ensuring that covered non-bank 
entities' third-party disclosures comply with part 328. Data on this 
burden are unavailable. The FDIC assumes each covered non-bank entity, 
on average, would spend approximately two and one-half hours in the 
first year to implement these procedures and approximately one hour in 
each subsequent year to revise and maintain ongoing compliance. FDIC 
estimates burdens as 2.5 hours per response for IC 8 and 1 hour per 
response for IC 9.\58\
---------------------------------------------------------------------------

    \58\ Note that these hourly burden estimates are higher than the 
corresponding estimates in the notice and request for comment 
published in the Federal Register on September 8, 2022. The increase 
reflects the additional requirements in the proposed rule's 
amendments to 12 CFR 328.102(b)(5).
---------------------------------------------------------------------------

    IC 10 captures the reporting burden incurred when an IDI requests 
approval from the FDIC to use the non-English equivalent of the 
official advertising statement in any of its advertisements. The FDIC 
believes that an IDI would spend approximately two hours per year, on 
average, to prepare and submit such requests.

Estimated Annual Burden Summary

    The estimated PRA burdens for the proposed rule are summarized in 
the Summary of Estimated Annual Burden table below. For each IC, the 
burden table lists the estimated annual number of responses per 
respondent and estimated time per response, as described in the 
sections above. Note that the counts of annual respondents for ICs 3-9 
have been annualized to reflect a three year PRA cycle in which 
respondents incur implementation costs in the first year and ongoing 
costs in the second and third years.

                                       Summary of Estimated Annual Burden
----------------------------------------------------------------------------------------------------------------
                                  Type of burden                     Number of       Time per
     Information collection       (frequency of      Number of     responses per     response     Annual  burden
    (obligation to respond)         response)       respondents     respondent        (HH:MM)         (Hours)
----------------------------------------------------------------------------------------------------------------
1. Signs within Institution      Third-Party                4619               7            1:00          32,333
 Premises--Banks <$10B, 12 CFR    Disclosure
 328.3 (Mandatory).               (Annual).
2. Signs within Institution      Third-Party                 161             282            2:00          90,804
 Premises--Banks >=$10B, 12 CFR   Disclosure
 328.3 (Mandatory).               (Annual).
3. Signage for ATMs and Digital  Third-Party                1593               1           60:00          95,580
 Deposit-taking Channels--        Disclosure
 Implementation, 12 CFR 328.4     (Annual).
 and 328.5 (Mandatory).
4. Signage for ATMs and Digital  Third-Party                3080               1           10:00          30,800
 Deposit-taking Channels--Banks   Disclosure
 <$10B-Ongoing, 12 CFR 328.4      (Annual).
 and 328.5 (Mandatory).
5. Signage for ATMs and Digital  Third-Party                 107               1           20:00           2,140
 Deposit-taking Channels--Banks   Disclosure
 >=$10B-Ongoing, 12 CFR 328.4     (Annual).
 and 328.5 (Mandatory).
6. Policies and Procedures--     Recordkeeping              1593               1           80:00         127,440
 Implementation, 12 CFR 328.8     (Annual).
 (Mandatory).
7. Policies and Procedures--     Recordkeeping              3187               1           12:00          38,244
 Ongoing, 12 CFR 328.8            (Annual).
 (Mandatory).

[[Page 78032]]

 
8. Insured Depository            Third-Party                 500               1            2:30           1,250
 Institution Relationships--      Disclosure
 Implementation 12 CFR            (Annual).
 328.102(b)(5) (Mandatory).
9. Insured Depository            Third-Party                1000               1            1:00           1,000
 Institution Relationships--      Disclosure
 Ongoing 12 CFR 328.102(b)(5)     (Annual).
 (Mandatory).
10. Request for Consent to Use   Reporting (On                 1               1            2:00               2
 Non-English Language             occasion).
 Advertising Statement--
 existing 12 CFR 328.3(f),
 proposed 12 CFR 328.6(f)
 (Required to Obtain or Retain
 a Benefit).
                                                 ---------------------------------------------------------------
    Total Annual Burden (Hours)  ...............  ..............  ..............  ..............         419,593
----------------------------------------------------------------------------------------------------------------
Source: FDIC.
Note: The annual burden estimate for a given collection is calculated in two steps. First, the total number of
  annual responses is calculated as the whole number closest to the product of the annual number of respondents
  and the annual number of responses per respondent. Then, the total number of annual responses is multiplied by
  the time per response and rounded to the nearest hour to obtain the estimated annual burden for that
  collection. This rounding ensures the annual burden hours in the table are consistent with the values recorded
  in the OMB's regulatory tracking system.

    Comments are invited on:
     Whether the collection of information is necessary for the 
proper performance of the functions of the agency, including whether 
the information has practical utility;
     The accuracy of the agency's estimate of the burden of the 
collection of information;
     Ways to enhance the quality, utility, and clarity of the 
information to be collected;
     Ways to minimize the burden of the collection on 
respondents, including through the use of automated collection 
techniques or other forms of information technology; and
     Estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.

Riegle Community Development and Regulatory Improvement Act

    Section 302 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (RCDRIA) requires that the Federal banking 
agencies, including the FDIC, in determining the effective date and 
administrative compliance requirements of new regulations that impose 
additional reporting, disclosure, or other requirements on insured 
depository institutions, consider, consistent with principles of safety 
and soundness and the public interest, any administrative burdens that 
such regulations would place on depository institutions, including 
small depository institutions, and customers of depository 
institutions, as well as the benefits of such regulations subject to 
certain exceptions, new regulations and amendments to regulations 
prescribed by a Federal banking agency which impose additional 
reporting, disclosures, or other new requirements on insured depository 
institutions shall take effect on the first day of a calendar quarter 
which begins on or after the date on which the regulations are 
published in final form.

Plain Language

    Section 722 of the Gramm-Leach-Bliley Act requires the Federal 
banking agencies to use plain language in all proposed and final 
rulemakings published in the Federal Register after January 1, 2000. 
The FDIC invites your comments on how to make this proposal easier to 
understand. For example:
     Has the FDIC organized the material to suit your needs? If 
not, how could the material be better organized?
     Are the requirements in the proposed regulation clearly 
stated? If not, how could the regulation be stated more clearly?
     Does the proposed regulation contain language or jargon 
that is unclear? If so, which language requires clarification?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the regulation easier to 
understand?

Request for Comment

    The FDIC invites comment on all aspects of this proposed 
rulemaking. In particular, the FDIC seeks feedback on the scope of the 
proposed rule and its requirements, and responses to the following 
specific questions:

Physical Signage

    (1) Are there any aspects of the proposed rule's on-premises 
signage requirements that would be challenging to satisfy in a non-
traditional footprint branch? How could the proposed rule be modified 
to better accommodate signage needs in such branches while also 
satisfying the FDIC's objectives?
    (2) With respect to the proposed rule's non-deposit signage 
requirements, are there better alternative methods by which IDIs might 
help consumers distinguish insured deposits from non-deposit products?
    (3) Would it be beneficial to consumers to standardize the design 
of the proposed rule's non-deposit signage? If a standard design were 
required, which design elements would minimize any potential challenges 
associated with integrating it into an IDI's other non-deposit product 
marketing materials?

Digital Channels

    (4) Are there any particular aspects of a potential design or the 
placement of the digital sign that might improve its presentation or 
readability for consumers, or minimize the any potential technical 
challenges of introducing this sign into digital interfaces?
    (5) Would it be beneficial to consumers to require the digital sign 
on other pages in addition to the homepage, application, landing, 
login, and transactional pages of an IDI's digital channels, including 
websites and mobile applications?
    (6) Should the proposed rule require, rather than permit, IDIs to 
link the digital sign to the FDIC BankFind tool? Would IDIs face any 
unique technological challenges in complying with such a requirement?
    (7) Does the proposed rule sufficiently address the risk of 
confusion where

[[Page 78033]]

consumers interact with deposits and non-deposit products through the 
same digital channels? Are there any additional or alternative 
requirements that would draw a clear distinction between deposits and 
non-deposit products on digital channels?

ATMs and Similar Devices

    (8) Does the proposed rule's requirement to display the digital 
version of the FDIC official sign on ATMs and similar devices present 
technical challenges? If so, are there ways to address those challenges 
while still displaying clear signage on deposit insurance coverage for 
consumers?
    (9) Do the proposed rule's disclosure requirements for ATMs and 
similar devices sufficiently differentiate between deposits and non-
deposit products? If not, please suggest better alternative methods.
    (10) Given potential requirements for signs in physical branches, 
ATMs, and digital channels, how long would it take to revise systems 
and process for the purposes of complying with a rule; what should the 
compliance date(s) for the rule be?

IDI Policies and Procedures

    (11) With respect to the proposed requirement for IDI's to 
establish policies and procedures to comply with part 328, are there 
additional, or more specific, criteria that institutions should 
consider as part of its policies and procedures?

Official Advertising Statement

    (12) In addition to ``FDIC-insured'', are there other options for 
the short advertising statement that the proposed rule should allow?

Misrepresentations and Material Omissions

    (13) Are there additional practices or scenarios that the FDIC 
should clarify as being misrepresentations of deposit insurance?

Non-Deposit Products

    (14) Is the proposed definition of crypto-asset in subparts A and B 
appropriate?

List of Subjects in 12 CFR Part 328

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

Authority and Issuance

    For the reasons stated in the preamble, the Federal Deposit 
Insurance Corporation proposes to amend 12 CFR part 328 as follows:

PART 328--ADVERTISEMENT OF MEMBERSHIP, FALSE ADVERTISING, 
MISREPRESENTATION OF INSURED STATUS, AND MISUSE OF THE FDIC'S LOGO

0
1. The authority citation for part 328 continues to read as follows:

    Authority: 12 U.S.C. 1818, 1819 (Tenth), 1820(c), 1828(a).

0
2. Revise subpart A to read as follows:

Subpart A--Advertisement of Membership

Sec.
328.0 Purpose.
328.1 Definitions.
328.2 Official sign.
328.3 Signs within institution premises and offering of non-deposit 
products within institution premises.
328.4 Signage for automated teller machines and like devices.
328.5 Signs for digital deposit-taking channels.
328.6 Official advertising statement requirements.
328.7 Prohibition against receiving deposits at same teller station 
or window as noninsured institution.
328.8 Policies and Procedures.


Sec.  328.0  Purpose.

    Subpart A of this part describes the official sign and advertising 
statement and prescribes their use by insured depository institutions, 
as well as other signs to prevent customer confusion in the event non-
deposit products are offered by an insured depository institution. 
Subpart A applies to insured depository institutions, including insured 
branches of foreign banks, but does not apply to non-insured offices or 
branches of insured depository institutions located in foreign 
countries.


Sec.  328.1  Definitions.

    Branch has the same meaning as the term ``domestic branch'' as set 
forth under section 3(o) of the Federal Deposit Insurance Act, 12 
U.S.C. 1813(o).
    Corporation means the Federal Deposit Insurance Corporation.
    Crypto-asset means any digital asset implemented using 
cryptographic techniques.
    Deposit has the same meaning as set forth under section 3(l) of the 
Federal Deposit Insurance Act, 12 U.S.C. 1813(l).
    Digital deposit-taking channel means any electronic communications 
method through which an insured depository institution accepts 
deposits.
    Hybrid product means a product or service that has both deposit 
product features and non-deposit product features. A sweep account is 
an example of a hybrid product.
    Insured depository institution has the same meaning as set forth 
under section 3(c)(2) of the Federal Deposit Insurance Act, 12 U.S.C. 
1813(c)(2).
    Non-deposit product means 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.


Sec.  328.2  Official sign.

    (a) Design. The official sign has the following design:

[[Page 78034]]

[GRAPHIC] [TIFF OMITTED] TP21DE22.030

    (b) Symbol. The ``symbol'' of the Corporation, as used in this 
subpart, shall be that portion of the official sign consisting of 
``FDIC'' and the two lines of smaller type above and below ``FDIC.''
    (c) Procuring signage. 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 website, https://www.fdic.gov. Alternatively, insured 
depository institutions may, at their expense, procure from commercial 
suppliers signs that vary from the official sign in size, color, or 
material. 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 subpart by failing to display 
the official sign, unless the insured depository institution fails to 
display the official sign after receipt thereof.
    (d) Required changes in signage. 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  Signs within institution premises and offering of non-
deposit products within institution premises.

    (a) Scope. This section governs signage within the premises of 
insured depository institutions and the offering of non-deposit 
products within the premises of insured depository institutions.
    (b) Display of official sign. Insured depository institutions must 
continuously, clearly, and conspicuously display the official sign in 
its principal place of business and all of its branches (except 
branches excluded from the scope of this subpart under Sec.  328.0) in 
the manner described in this paragraph (b).
    (1) Deposits received at teller windows or stations. If deposits 
are usually and normally received at teller windows or stations, the 
insured depository institution must display the official sign:
    (i) At each teller window or station where deposits are usually and 
normally received, in a size of 7'' by 3'' or larger with black 
lettering on a gold background; or
    (ii) If the insured depository institution does not offer non-
deposit products on the premises, 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.
    (2) Deposits received in areas other than teller windows or 
stations. If insured deposits are usually and normally received in 
areas of the premises other than teller windows or stations, the 
insured depository institution must display the official sign in one or 
more locations in a manner that ensures a copy of the official sign is 
large enough so as to be legible from anywhere in those areas.
    (3) Other locations within the premises. An insured depository 
institution may display the official sign in locations at the 
institution other than those required by this section, except for areas 
where non-deposit products are offered.
    (4) Varied signs. An insured depository institution may display 
signs that vary from the official sign in size, color, or material at 
any location where display of the official sign is required or 
permitted under this paragraph. However, any such varied sign that is 
displayed in locations where display of the official sign is required 
must not be smaller in size than the official sign, must have the same 
color for the text and graphics, and includes the same content.
    (5) Newly insured institutions. An insured depository institution 
shall display the official sign as described in this section no later 
than its twenty-first calendar 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.
    (a) Non-deposit products offered on IDI premises--(1) Segregated 
areas. If non-deposit products are offered within the premises, those 
products must be physically segregated from areas where insured 
deposits are usually and normally accepted. The institution must 
identify areas where activities related to the sale of non-deposit 
investment products occur and clearly delineate and distinguish those 
areas from the areas where insured deposit-taking activities occur.
    (2) Non-deposit signage. At each location within the premises where 
non-deposit products are offered, an insured depository institution 
must 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. Such signage may not be displayed 
in close proximity to the official sign.
    (d) Electronic media. Insured depository institutions may use 
electronic media to display the official sign and non-deposit sign 
required by this section.


Sec.  328.4  Signage for automated teller machines and like devices.

    (a) Scope. This section governs signage for IDI's automated teller 
machines or other remote electronic facilities that receive deposits.
    (b) Display of official sign. An IDI's automated teller machine or 
like device that receives deposits for an insured

[[Page 78035]]

depository institution must clearly, continuously, and conspicuously 
display a digital version of the official sign on its home page or 
screen and on each transaction page or screen relating to deposits.
    (c) Non-deposit signage. If an IDI's automated teller machine or 
like device receives deposits for an insured depository institution and 
offers access to non-deposit products, the machine must clearly, 
continuously, and conspicuously display electronic disclosures 
indicating that such non-deposit products: are not insured by the FDIC; 
are not deposits; and may lose value. These disclosures must be 
displayed on each transaction page or screen relating to non-deposit 
products.


Sec.  328.5  Signs for digital deposit-taking channels.

    (a) Scope. This section governs signage for digital deposit-taking 
channels, including insured depository institutions' websites and web-
based or mobile applications that offer the ability to make deposits 
electronically and access to deposits at insured depository 
institutions.
    (b) Design. The digital sign required by the provisions of this 
section has the following design: [Image of sign for digital deposit-
taking channels that FDIC expects 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 TBD]
    (c) Display of digital sign. An insured depository institution must 
clearly, continuously and conspicuously display the digital sign 
specified in paragraph (b) of this section on its digital deposit 
taking channels in the following pages or screens:
    (1) The initial or homepage of the website or application;
    (2) Landing or login pages; and
    (3) Pages where the customer may transact with deposits.
    (4) A digital sign continuously displayed near the top of the 
relevant page or screen in close proximity to the IDI's name would be 
considered clear and conspicuous.
    (d) Non-deposit signage. If a digital deposit-taking channel offers 
both access to deposits at an insured depository institution and non-
deposit products, the insured depository institution must clearly and 
conspicuously display signage indicating that the non-deposit products: 
are not insured by the FDIC; are not deposits and may lose value. This 
signage must be displayed:
    (1) Via a one-time notification that is dismissed by an action of 
the user, when the page is initially accessed; and
    (2) Continuously on each page relating to non-deposit products. 
This non-deposit signage may not be displayed in close proximity to the 
digital sign required by paragraph (c) of this section.


Sec.  328.6  Official advertising statement requirements.

    (a) Advertisement defined. The term ``advertisement,'' as used in 
this subpart, 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,'' ``Member FDIC,'' ``FDIC-insured,'' or a reproduction of the 
symbol of the Corporation (as described in Sec.  328.2(b)), 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 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 
promote non-specific banking products and services offered by the 
institution. For purposes of this section, an advertisement promotes 
non-specific banking products and services if it includes the name of 
the insured depository institution but does not list or describe 
particular products or services offered by the institution. An example 
of such an advertisement would be, ``Anytown Bank, offering a full 
range of banking services.''
    (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) Statements of condition and reports of condition of an insured 
depository institution which are required to be published by State or 
Federal law;
    (2) Insured depository institution supplies such as stationery 
(except when used for circular letters), envelopes, deposit slips, 
checks, drafts, signature cards, deposit passbooks, certificates of 
deposit, etc.;
    (3) Signs or plates in the insured depository institution offices 
or attached to the building or buildings in which such offices are 
located;
    (4) Listings in directories;
    (5) Advertisements not setting forth the name of the insured 
depository institution;
    (6) Entries in a depository institution directory, provided the 
name of the insured depository institution is listed on any page in the 
directory with a symbol or other descriptive matter indicating it is a 
member of the Federal Deposit Insurance Corporation;
    (7) Joint or group advertisements of depository institution 
services where the names of insured depository institutions and 
noninsured institutions are listed and form a part of such 
advertisements;
    (8) Advertisements by radio or television, other than display 
advertisements, which do not exceed thirty (30) seconds in time;
    (9) 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
    (10) 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 the standard maximum deposit insurance amount (as defined in 
Sec.  330.1(o)) for each depositor.

[[Page 78036]]

    (e) Restrictions on using the official advertising statement when 
advertising non-deposit products--(1) Non-deposit product 
advertisements. Except as provided in paragraph (e)(3) of this section, 
an insured depository institution shall not include the official 
advertising statement, or any other statement or symbol which implies 
or suggests the existence of Federal deposit insurance, in any 
advertisement relating solely to non-deposit products.
    (2) Hybrid product advertisements. Except as provided in paragraph 
(e)(3) of this section, an insured depository institution shall not 
include the official advertising statement, or any other statement or 
symbol which implies or suggests the existence of Federal deposit 
insurance, in any advertisement relating solely to hybrid products.
    (3) Mixed advertisements. In advertisements containing information 
about both insured deposit products and non-deposit products or hybrid 
products, an insured depository institution shall clearly segregate the 
official advertising statement or any similar statement from that 
portion of the advertisement that relates to the non-deposit products.
    (f) 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.  328.7  Prohibition against receiving deposits at same teller 
station or window as noninsured institution.

    (a) Prohibition. An insured depository institution may not receive 
deposits at any teller station or window where any noninsured 
institution receives deposits or similar liabilities.
    (b) Exception. This section does not apply to deposits received at 
an automated teller machine or other remote electronic facility that 
receives deposits for an insured depository institution, or to deposits 
facilitated through a digital deposit-taking channel.


Sec.  328.8  Policies and Procedures.

    (a) Policies and Procedures. An Insured Depository Institution must 
establish and maintain written policies and procedures to achieve 
compliance with this part. Such policies and procedures must be 
commensurate with the nature, size, complexity, scope, and potential 
risk of the deposit-taking activities of the Insured Depository 
Institution and must include, as appropriate, provisions related to 
monitoring and evaluating activities of persons that provide deposit-
related services to the Insured Depository Institution or offer the 
Insured Depository Institution's deposit-related products or services 
to other parties.
    (b) Reservation of authority. Nothing in this section shall be 
construed to limit the FDIC's authority to address violations of this 
part, the FDIC's authority to interpret the rules in this part, or any 
other authority the FDIC has pursuant to any other laws or regulations.
0
3. Amend Sec.  328.101 by adding the definitions for ``Crypto-asset'' 
and ``Deposit'' in alphabetical order, and revising the definitions for 
``FDIC-Associated Images'', ``Hybrid Product'', ``Non-Deposit 
Product'', and ``Uninsured Financial Product'' to read as follows:

Subpart B--False Advertising, Misrepresentation of Insured Status, 
and Misuse of the FDIC's Name or Logo


Sec.  328.101  Definitions.

* * * * *
    Crypto-asset means any digital asset implemented using 
cryptographic techniques.
    Deposit has the same meaning as set forth under section 3(l) of the 
Federal Deposit Insurance Act, 12 U.S.C. 1813(l).
* * * * *
    FDIC-Associated Images means the Seal of the FDIC, alone or within 
the letter C of the term FDIC; the Official Sign and Symbol of the 
FDIC, as set forth in Sec.  328.2; the digital sign set forth in Sec.  
328.5; the Official Advertising Statement, as set forth in Sec.  328.6; 
any similar images; and any other signs and symbols that may represent 
or imply that any deposit, liability, obligation certificate, or share 
is insured or guaranteed in whole or in part by the FDIC.
* * * * *
    Hybrid Product has the same meaning as set forth under Sec.  328.1.
* * * * *
    Non-Deposit Product means 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.
* * * * *
    Uninsured Financial Product means any Non-Deposit Product, Hybrid-
Product, investment, security, obligation, certificate, share, crypto-
asset or financial product other than an ``Insured Deposit'' as defined 
in this section.
0
4. Amend Sec.  328.102 by adding paragraph (a)(3)(viii) and revising 
paragraphs (b)(3)(ii), (b)(4)(i), (b)(5), and (b)(6)(ii) to read as 
follows:


Sec.  328.102  Prohibition.

    (a) * * *
    (3) * * *
    (viii) Use of FDIC-Associated Terms or FDIC-Associated Images, in a 
manner that inaccurately states or implies that a person other than an 
Insured Depository Institution is insured by the FDIC.
    (b) * * *
    (3) * * *
    (ii) The statement omits or fails to clearly and conspicuously 
disclose material information that would be necessary to prevent a 
reasonable consumer from being misled, regardless of whether any such 
consumer was actually misled.
    (4) * * *
    (i) A person or Uninsured Financial Products are insured or 
guaranteed by the FDIC;
* * * * *
    (5) Without limitation, a statement regarding deposit insurance 
will be deemed to omit or fail to clearly and conspicuously disclose 
material information if the absence of such information could lead a 
reasonable consumer to believe any of the material misrepresentations 
set forth in paragraph (b)(4) of this section or could otherwise result 
in a reasonable consumer being unable to understand the extent or 
manner of deposit insurance provided. Examples of such material 
information include, but are not limited to, the following:
    (i) A statement made by a person other than an Insured Depository 
Institution that represents or implies that an advertised product is 
insured by the FDIC that fails to identify the Insured Depository 
Institution(s) with which the representing party has a direct or 
indirect business relationship for the placement of deposits and into 
which the consumer's deposits may be placed;
    (ii) A statement made by a person that is not an insured depository 
institution regarding deposit insurance that fails to clearly and 
conspicuously disclose that the person is not an FDIC-insured 
depository institution and that FDIC insurance only covers the failure 
of the FDIC-insured depository institution. 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.

[[Page 78037]]

    (iii) A statement made by a person regarding deposit insurance in a 
context where deposits and non-deposit products are involved that fails 
to clearly and conspicuously differentiate between Insured Deposits and 
Non-Deposit Products by disclosing that Non-Deposit Products: are not 
insured by the FDIC; are not deposits; and may lose value.
    (iv) A statement made by a person regarding pass-through deposit 
insurance coverage that fails to clearly and conspicuously disclose 
that certain conditions must be satisfied for pass-through deposit 
insurance coverage to apply.
    (6) * * *
    (ii) Has been advised by the FDIC in an advisory letter, as 
provided in Sec.  328.106(a), or has been advised by another 
governmental or regulatory authority, including, but not limited to, 
another Federal banking agency, the Federal Trade Commission, the 
Bureau of Consumer Financial Protection, the U.S. Department of 
Justice, or a state bank supervisor, that such representations are 
false or misleading; and
* * * * *

Federal Deposit Insurance Corporation.

    By order of the Board of Directors.

    Dated at Washington, DC, on December 13, 2022.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2022-27349 Filed 12-20-22; 8:45 am]
BILLING CODE 6714-01-P