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Rule2023-28629

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

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Published

January 18, 2024

Effective

April 1, 2024

Issuing agencies

Federal Deposit Insurance Corporation

Abstract

The Federal Deposit Insurance Corporation (FDIC) is amending its regulations governing use of the official FDIC sign and insured depository institutions' (IDIs) advertising statements to reflect how depositors conduct business with IDIs today, including through digital and mobile channels. The final rule also clarifies the FDIC's regulations regarding misrepresentations of deposit insurance coverage by addressing specific scenarios where consumers may be misled as to whether they are conducting business with an IDI and whether their funds are protected by federal deposit insurance. The final rule is intended to enable consumers to better understand when they are conducting business with an IDI and when their funds are protected by the FDIC's deposit insurance coverage.

Full Text

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<title>Federal Register, Volume 89 Issue 12 (Thursday, January 18, 2024)</title>
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[Federal Register Volume 89, Number 12 (Thursday, January 18, 2024)]
[Rules and Regulations]
[Pages 3504-3532]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-28629]

[[Page 3503]]

Vol. 89

Thursday,

No. 12

January 18, 2024

Part II

Federal Deposit Insurance Corporation

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12 CFR Part 328

FDIC Official Signs and Advertising Requirements, False Advertising,
Misrepresentation of Insured Status, and Misuse of the FDIC's Name or
Logo; Final Rule

Federal Register / Vol. 89 , No. 12 / Thursday, January 18, 2024 /
Rules and Regulations

[[Page 3504]]

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FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 328

RIN 3064-AF26

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

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Final rule.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) is amending
its regulations governing use of the official FDIC sign and insured
depository institutions' (IDIs) advertising statements to reflect how
depositors conduct business with IDIs today, including through digital
and mobile channels. The final rule also clarifies the FDIC's
regulations regarding misrepresentations of deposit insurance coverage
by addressing specific scenarios where consumers may be misled as to
whether they are conducting business with an IDI and whether their
funds are protected by federal deposit insurance. The final rule is
intended to enable consumers to better understand when they are
conducting business with an IDI and when their funds are protected by
the FDIC's deposit insurance coverage.

DATES: The amendments made in this rule are effective April 1, 2024.
Compliance is required by January 1, 2025.

FOR FURTHER INFORMATION CONTACT: Division of Depositor and Consumer
Protection: Luke H. Brown, Associate Director, 202-898-3842,
<a href="/cdn-cgi/l/email-protection#6b271e2919041c052b2d2f2228450c041d">[email&#160;protected]</a>; Meron Wondwosen, Chief, Supervisory Policy, 202-898-
7211, <a href="/cdn-cgi/l/email-protection#054860526a6b61726a76606b4543414c462b626a73">[email&#160;protected]</a>; Edward J. Hof, Senior Policy Analyst, 202-
898-7213, <a href="/cdn-cgi/l/email-protection#a0e5c4d7e8cfc6e0e6e4e9e38ec7cfd6">[email&#160;protected]</a>. Legal Division: Vivek Khare, Counsel, 202-
898-6847, <a href="/cdn-cgi/l/email-protection#d6809dbeb7a4b396b0b2bfb5f8b1b9a0">[email&#160;protected]</a>; James Watts, Counsel, 202-898-6678,
<a href="/cdn-cgi/l/email-protection#317b665045454271777578721f565e47">[email&#160;protected]</a>; Chantal Hernandez, Senior Attorney, 202-898-7388,
<a href="/cdn-cgi/l/email-protection#b5f6ddfdd0c7dbd4dbd1d0cff5d3d1dcd69bd2dac3">[email&#160;protected]</a>.

SUPPLEMENTARY INFORMATION: The FDIC is amending part 328 of its
regulations, which includes requirements for use of the official FDIC
sign and IDIs' advertising statements, as well as misrepresentations of
insured status and misuse of the FDIC's name or logo. The final rule
generally: (1) modernizes and amends the rules governing the display of
the official sign in branches to also, for example, apply the rules to
IDIs' physical premises with different layouts and designs where
consumers have access to or transact with deposits; (2) establishes and
requires the display of the FDIC official digital sign on bank
websites, mobile applications, and certain IDI automated teller
machines (ATMs) and other like devices; (3) requires the use of
disclosures differentiating deposits and non-deposit products across
all banking channels, including digital channels; (4) clarifies the
FDIC's rules regarding misrepresentations of deposit insurance coverage
by addressing specific scenarios where information provided to
consumers may be misleading; (5) amends the definition of ``non-deposit
product'' to include crypto-assets and specifically address safe
deposit box services; and (6) requires IDIs to establish and maintain
written policies and procedures addressing compliance with part 328. As
explained below, the final rule is intended to enable consumers to
better understand when they are conducting business with an IDI and
when their funds are protected by the FDIC's deposit insurance
coverage.

A. Policy Objectives

The banking landscape has significantly changed since 2006, when
the FDIC last updated its regulation on the official sign and
advertising statement. For example, consumers are increasingly relying
on internet and mobile banking channels to access IDI banking services,
bank branches are continually evolving to serve depositors, and
financial technology (fintech) companies are offering consumers new
options and alternatives for accessing banking products and services.
While these developments are beneficial, they may make it more
difficult for depositors and consumers to understand when they are
conducting business with an IDI and when their funds are protected by
FDIC deposit insurance. In addition, the FDIC has observed an increase
in misleading representations about deposit insurance on the internet,
which can result in consumer confusion and harm. These types of
misleading statements create uncertainty and could dilute and undermine
the confidence that underpins banks and our nation's broader financial
system.
To address ongoing market and technological developments, the
amendments to part 328 are intended to achieve several policy goals.
Specifically, the FDIC intends to bring the certainty and confidence
historically provided by the FDIC official sign found at banks' teller
windows to IDI digital channels through which depositors are
increasingly handling their banking needs today. These channels serve
as the digital teller windows of the modern banking landscape, and it
is critical that these channels provide clear, consistent, and accurate
information about deposit insurance upon which consumers, businesses,
and other entities may base their financial decisions.
The final rule establishes sign requirements across all banking
channels, including evolving digital channels, to better align with how
depositors conduct business with IDIs today. The sign requirements are
also intended to more clearly distinguish insured deposits from non-
deposit products (which are not insured) and to help consumers
distinguish IDIs from non-banks in the digital age. The final rule
allows consumers, businesses, and other entities to better understand
when their funds are protected by FDICs deposit insurance, and when
they may not be insured. At the same time, the sign requirements are
intended to permit flexibility for IDIs and other firms in the
marketing of their products and services.
The amendments to the FDIC's rules regarding misrepresentations of
deposit insurance coverage are intended to address specific scenarios
where information provided to consumers may be misleading with respect
to deposit insurance coverage. In particular, the FDIC is concerned
that certain business relationships between IDIs and non-banks may be
confusing to many consumers. Consequently, the final rule requires
clear disclosures that will better inform consumers as to when their
funds are protected by FDIC deposit insurance. Further clarity in this
area will be beneficial for both consumers and the industry.

B. Background

The FDIC is an independent federal agency and its mission is to
maintain stability and public confidence in the nation's financial
system by, among other things, insuring deposits at all IDIs. Today,
there are about 4,654 IDIs in the United States.\1\ Since 1933, the
FDIC has taken action in accordance with its mission to restore public
confidence in the banking system in times of financial turmoil,
including the severe financial crisis of 2008 to 2013, during the
financial stress associated with the coronavirus disease 2019 (COVID-
19) pandemic, and, most recently, when large regional banks failed in
the first half of 2023. The FDIC has proactively sought to protect

[[Page 3505]]

depositors and consumers,\2\ promote public confidence in insured
deposits, and prevent false and misleading representations about the
manner and extent of FDIC deposit insurance.
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\1\ Call Reports as of June 30, 2023.
\2\ As used in this document, the term ``consumer'' means any
current or potential depositor, including natural persons,
organizations, corporate entities, and governmental bodies. See 12
CFR 328.101.
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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 with the authority to prescribe rules and regulations as it may
deem necessary to carry out the provisions of this Act or of any
other law which it has the responsibility of administering or
enforcing. 12 U.S.C. 1819(a) Tenth.
\4\ See subpart A to 12 CFR part 328 (Sec. Sec. 328.0 through
328.5-328.99).
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The FDIC's official sign and advertising statement regulations
require IDIs to continuously display the FDIC official sign where
insured deposits are usually and normally received in the bank's
principal place of business and at all of its branches and to use an
official advertising statement, such as ``Member FDIC,'' when
advertising deposit products and services, with few exceptions.\5\ The
FDIC last made major amendments to these regulations in 2006.\6\ The
2006 amendments refer to an IDI's physical premises and ``Remote
Service Facilities'' but do not specify other banking channels that
have since evolved, such as digital banking channels.\7\
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\5\ See generally, 12 CFR part 328.
\6\ 71 FR 66098 (Nov. 13, 2006).
\7\ See 12 CFR 328.2. ``Remote Service Facility'' includes any
automated teller machine, cash dispensing machine, point-of-sale
terminal, or other remote electronic facility where deposits are
received. 12 CFR 328.2(a)(1)(ii).
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Section 18(a)(4) of the FDI Act prohibits any person from misusing
the name or logo of the FDIC or from engaging in false advertising or
making knowing misrepresentations about deposit insurance.\8\ The FDIC
has broad statutory authority in this area and, in May 2022, issued
specific regulations in subpart B to 12 CFR part 328 regarding false
representations related to FDIC insurance and the misuse of the FDIC
name and logo.\9\
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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). Furthermore, under
Federal law, it is a criminal offense to misuse the FDIC name or
make false representations regarding deposit insurance. See 18
U.S.C. 709.
\9\ 87 FR 33415 (June 2, 2022); Subpart B to 12 CFR part 328
(Sec. Sec. 328.100 through 328.109). Subpart B establishes the
process by which the FDIC identifies and investigates conduct that
may violate section 18(a)(4), the standards under which such conduct
is evaluated, and the procedures the FDIC follows when formally and
informally enforcing the provisions of section 18(a)(4).
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Developments in Consumer Access to Banking and Financial Services

In recent years, there have been significant changes in the
provision of banking products and services, including the widespread
use of digital banking channels as a critical and fundamental mechanism
to access banking and financial services, the evolution of bank
branches' role in serving consumers, and an increasingly broad array of
financial products offered through banking channels, including access
to non-deposit products. The following overview of these trends is
intended to provide context for the final rule, which seeks to enable
consumers to better understand when they are conducting business with
an IDI and when their funds are protected by the FDIC's deposit
insurance coverage.
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 physical premises with different layouts and designs.
These locations may include electronically-staffed kiosks, interactive
ATMs that provide remote assistance with a teller, and teller-less
caf[eacute]s with internet access where deposits can be accepted on
tablets or through ATMs. The FDIC's long-standing sign rules, focused
on display of the official sign at teller windows or stations, need to
be updated to reflect these market changes and the way banks and
consumers conduct business.
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\10\ Federal Deposit Insurance Corporation (FDIC), 2021 National
Survey of Unbanked and Underbanked Households (October 2022),
<a href="https://www.fdic.gov/analysis/household-survey/2021report.pdf">https://www.fdic.gov/analysis/household-survey/2021report.pdf</a>.
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The FDIC's long-standing sign rules also do not reflect the digital
banking services now offered, such as online banking and mobile
banking. For example, digital banking channels enable banks to receive
customer deposits through remote deposit capture. For consumers that
use these channels to make deposits, an IDI's ATM, website, or mobile
application effectively serves as a digital teller window. 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 its rules and provide consistent sign
requirements for digital channels.
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\11\ Id. at 25.
\12\ Id.
\13\ Id.
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Banking customers are also offered an increasingly wide array of
financial products and services, regardless of whether they are in a
branch, using an ATM, or connecting with an IDI through digital
channels. In many instances, IDIs offer both deposits and non-deposit
products to consumers. For example, IDIs might allow depositors in
their branches to consult with an investment adviser and purchase
securities or mutual funds. Options to purchase non-deposit products
are continuing to evolve, with some IDIs offering ATM or digital
banking customers the ability to purchase crypto-assets with their
funds. In some cases, an IDI may provide its customers who initially
access the IDI's website, ATM, or banking application the ability to
purchase non-deposit products from a third party. Absent adequate signs
or disclosures, simultaneous offering of both insured deposits and non-
deposit products may lead bank customers (who are aware that the IDI is
insured by the FDIC) to mistakenly conclude that all of the financial
products being offered through

[[Page 3506]]

their bank's website or application are FDIC-insured.
Growth in the number of fintech companies has also blurred the
distinction between IDIs and non-banks in the eyes of many consumers,
increasing the potential for confusion regarding deposit insurance
coverage. Business arrangements between IDIs and non-banks, including
fintech companies, can take many forms and continue to evolve at a
rapid pace. In some cases, such business arrangements can present the
risk of consumer confusion. For example, an IDI and a fintech company
might enter into an arrangement where the fintech company offers the
IDI's deposit products and services to the fintech company's customers.
In other instances, fintech companies might deposit their customers'
funds at an IDI. In such cases, the fintech company might represent to
its customers that the customers' funds are FDIC-insured, or that they
are insured by the FDIC on a ``pass-through'' basis, without noting
that it is subject to certain conditions. The substantial increase in
the number and types of arrangements and the various representations
that companies are making regarding deposit insurance coverage may
confuse many consumers. For example, inadequate disclosures may result
in consumers not understanding whether they are dealing with an IDI,
and whether their funds are insured by the FDIC.

Industry Outreach--Request for Information

In February 2020 and April 2021, the FDIC published Requests for
Information (collectively, the RFIs) in the Federal Register to seek
public input regarding potential modernization of the official sign and
advertising rules to reflect changes in deposit-taking via physical
branch, digital, and mobile banking channels.\14\ In response to the
RFIs, the FDIC received 20 comments from trade associations, IDIs, and
others.\15\ In addition, FDIC staff met with representatives from IDIs,
a technology service provider, and consumer groups. Commenters
generally recognized the importance and value of displaying FDIC signs
and the advertising statement, and some commenters stressed that
depositors place significant trust in FDIC signs. A summary of these
comments was provided in the December 2022 Notice of Proposed
Rulemaking (NPR or proposal) and the comments were considered as part
of this rulemaking process.\16\
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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: <a href="https://www.fdic.gov/resources/regulations/federal-register-publications/2020/2020-rfi-fdic-sign-and-advertising-requirements-3064-za14.html">https://www.fdic.gov/resources/regulations/federal-register-publications/2020/2020-rfi-fdic-sign-and-advertising-requirements-3064-za14.html</a> and <a href="https://www.fdic.gov/resources/regulations/federal-register-publications/2021/2021-rfi-fdic-official-sign-and-advertising-requirements-3064-za14.html">https://www.fdic.gov/resources/regulations/federal-register-publications/2021/2021-rfi-fdic-official-sign-and-advertising-requirements-3064-za14.html</a>.
\16\ 87 FR 78017, 78020 (Dec. 21, 2022).
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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.\17\ The final rule describes: (1) the process by
which the FDIC will identify and investigate conduct that may violate
the prohibitions against misuse and misrepresentation; (2) the
standards under which such conduct will be evaluated; and (3) the
procedures that the FDIC will follow when formally and informally
enforcing these prohibitions. While this rulemaking was an important
step, the FDIC has observed an increase in the number of instances
where financial services providers or other entities or individuals
have misused the FDIC's name or logo or have made misrepresentations
about FDIC insurance. Although the FDIC demanded that these non-banks
cease and desist from making false and misleading statements, such
actions by non-banks caused continuing challenges for consumers in
determining whether they are conducting business with an IDI and
whether their funds are protected by the FDIC's deposit insurance
coverage.\18\ This final rule will provide further clarification of
subpart B to address these challenges, particularly to address specific
situations where consumers may be misled as to whether an entity is
insured by the FDIC or as to the nature and extent of deposit insurance
coverage.
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\17\ 87 FR 33415 (June 2, 2022).
\18\ A public list of FDIC cease and desist letters related to
violations of section 18(a)(4) of the FDI Act can be found on the
FDIC's website, available at: <a href="https://www.fdic.gov/resources/regulations/laws/section-18a4-of-fdi-act/">https://www.fdic.gov/resources/regulations/laws/section-18a4-of-fdi-act/</a>.
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December 2022 Proposal and Comments

On December 13, 2022, the FDIC Board approved an NPR on the FDIC's
sign and advertising requirements, rules on misrepresentation of
insured status, and misuse of the FDIC's name or logo. The FDIC sought
to obtain input from the public for these proposed regulations in light
of significant changes to bank branches and their role in serving
consumers, the proliferation of digital channels as a critical and
fundamental mechanism to access banking and financial services, and an
increasingly broad array of financial products offered through banking
channels, including access to non-deposit products.
Specifically, the FDIC's proposal aimed to modernize its sign and
advertising requirements to reflect current banking practices, like
deposit-taking via physical branches and similar locations, digital
banking channels, and ATMs. The proposal included three distinct signs
relating to deposit insurance. The first pertained to the official sign
displayed at IDIs' principal places of business. The NPR proposed to
modernize the requirements relating to display of the official sign to
reflect developments in the marketplace. The second was for a new
digital official sign that IDIs would be required to display on their
digital deposit-taking channels, such as online banking websites,
mobile applications, and ATMs. Third, the FDIC proposed requiring IDIs
to display a non-deposit products sign indicating that such products:
are not insured by the FDIC; are not deposits; and may lose value
(where the IDI offers both insured and uninsured, non-deposit products
through the same channel) in order to address potential customer
confusion regarding a product's insured status. The FDIC also proposed
limited amendments to its official advertising statement requirements
to provide IDIs with an additional option for a shortened official
advertising statement. Finally, the proposal included clarifications
for the application of the misrepresentation statute in specific
situations where consumers may misunderstand or be misled as to whether
an entity is insured by the FDIC or the nature and extent of deposit
insurance coverage.
The NPR solicited comments on all aspects of the proposed rule. The
comment period ended on April 7, 2023. The FDIC received 17 substantive
comments from financial institutions, industry groups, consumer
organizations, investor advocacy groups, crypto-asset/blockchain
groups, deposit networks, and third-party vendors.\19\
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\19\ Comments can be accessed at: <a href="https://www.fdic.gov/resources/regulations/federal-register-publications/2022/2022-fdic-official-sign-advertising-requirements-3064-af26.html">https://www.fdic.gov/resources/regulations/federal-register-publications/2022/2022-fdic-official-sign-advertising-requirements-3064-af26.html</a>. In response
to a comment letter, the FDIC extended the comment period by 45 days
to provide additional opportunity for the public to prepare comments
to address the matters raised by the NPR.
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A number of comments were supportive of the proposal. More
specifically, several comments supported the FDIC's efforts to
modernize its rules in light of changes and innovation in the
marketplace and to provide further clarity through

[[Page 3507]]

deposit insurance signage and advertisement requirements. Several
comments also supported the FDIC's efforts to ensure consumers fully
understand the insured status of products offered by financial
institutions. One commenter provided that the confusion over new and
complex financial products could undermine public confidence in the
safety and reliability of the mainstream banking system.
A number of commenters expressed a desire for more flexibility
regarding the proposed signage and disclosure requirements. Some
commenters advocated for increased flexibility in the placement of both
physical and digital signage, noting the costs entailed to comply with
the proposed rule's requirements.
Several financial institutions provided that the proposed rule
focused on community banks instead of non-banks that falsify their
insured status, and noted that banks already take affirmative steps to
inform their customers about deposit insurance coverage. However, other
commenters commended the FDIC's effort to improve clarity for customers
regarding deposit insurance coverage and reduce customer confusion,
given the rise of various banking services offered by the third
parties.
Some comments advocated for stronger measures to address deposit
insurance misrepresentations. Specifically, a commenter suggested that
FDIC should expressly prohibit comparing an uninsured financial product
to an insured product without clearly and conspicuously noting the
difference between insured and uninsured status.
Commenters also expressed views on an appropriate effective date
for the rule. One commenter recommended a minimum 18-month
implementation period before the final rule becomes effective. Another
commenter requested that the requirements related to the digital sign
be made effective after the industry has at least one year to comply.

C. Final Rule and Discussion of Comments

The FDIC has reviewed and carefully considered public comments
received and is generally finalizing the rule as proposed, with some
changes and clarifications, as described below. The amendments made by
this final rule will take effect on April 1, 2024. However, full
compliance with the amendments made by this final rule is extended to
January 1, 2025. The extended compliance date is intended to provide
sufficient time for financial institutions to put in place processes,
systems and technological updates to implement the new regulatory
requirements described below.

1. FDIC Official Sign

The FDIC did not receive comments on its official sign and will
continue to use the existing design of the official sign, which, in
addition to prominently bearing the name of the FDIC, includes
statements indicating that each depositor is insured up to at least
$250,000 and that the FDIC's deposit insurance is backed by the full
faith and credit of the United States government. In the proposed rule,
the FDIC moved the reference to the display of the official sign to
proposed Sec. 328.3, including the language that the official sign
must be in a size of 7'' by 3'' or larger with black lettering on a
gold background. After further consideration, the FDIC is including the
official sign size and color requirements as part of the official sign
description under Sec. 328.2 for ease of reference under the final
rule. The FDIC also continues to reference this language in the
requirements for display of the official sign in Sec. 328.3 under the
final rule.

2. Sign Requirements on IDIs' Physical Premises

Official Sign In an IDI's Physical Premises
Proposed Rule
Section 18(a) of the FDI Act requires all IDIs to display at each
place of business a sign or signs relating to the insurance of the
deposits of the institution. The FDIC proposed updated signage
requirements in Sec. 328.3 to govern signage within an IDI's premises.
The proposed rule would have continued to require all IDIs to
continuously, clearly, and conspicuously display the official sign in
their principal place of business and all their U.S. branches.\20\ To
accommodate evolving styles and footprints of branches, the proposed
rule also would have required IDIs to display the FDIC official sign in
any physical location where IDIs receive deposits other than teller
windows or stations (referred to as ``non-traditional branches'' in the
preamble to the proposed rule).
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\20\ As stated in the NPR, the term ``branch'' would be defined
by reference to the FDI Act's definition of ``domestic branch,'' 12
U.S.C. 1813(o).
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Discussion of Comments
One commenter suggested that the FDIC eliminate references to
``non-traditional branches'' and stated that non-branch locations
should not be subject to the proposed rule's sign requirement. The
commenter further stated that the proposed rule's requirements for
physical premises would apply only to banks' principal place of
business and branches. The commenter expressed concerns that the term
``non-traditional branch'' could be over-inclusive and include non-
branch locations, like deposit production offices.
Final Rule
The FDIC is revising Sec. 328.3(b) to now require that:

Each insured depository institution must continuously, clearly,
and conspicuously display the official sign at each place of
business where consumers have access to or transact with deposits,
including all of its branches (except branches excluded from the
scope of this subpart under Sec. 328.0) and other premises in which
customers have access to or transact with deposits, in the manner
described in this paragraph (b).\21\
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\21\ Final 12 CFR 328.3(b) (emphasis added).

This requirement is consistent with section 18(a) of the FDI Act,
which provides the FDIC authority to prescribe regulations for IDIs to
display at each place of business a sign or signs relating to the
insurance of deposits of the institution.\22\
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\22\ See 12 U.S.C. 1828(a)(1)(A), 1828(a)(2).
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With respect to the comment that requested the FDIC not use the
term ``non-traditional branches,'' the FDIC did not intend to affect
how the term ``branch'' is defined or interpreted in other regulations.
In the preamble to the proposal, the FDIC used the term ``non-
traditional branches'' to help distinguish such places of business from
what are commonly viewed as the ``traditional branches'' where deposits
are usually and normally received at only teller windows. The FDIC
intended for the term to describe the new layouts and designs that some
IDIs are using where deposits are usually and normally received in
areas other than teller windows or stations.\23\
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\23\ See final 12 CFR 328.3(b)(2).
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However, to prevent potential confusion related to the term
``branch'' and its applications in other regulations, the preamble to
the final rule will not refer to the term ``non-traditional branches.''
Rather, under the final rule, the signage requirements apply to an
IDI's places of business where consumers have access to, or transact
with, deposits, including branches and other physical premises (e.g.,
caf[eacute]-style locations). As a result, the types of bank premises
that were intended to be covered under the proposal are covered by the
final rule. For example, under a

[[Page 3508]]

scenario where an IDI usually and normally receives insured deposits at
a teller window or station and other areas within the same premise,
then pursuant to the final rule, the IDI is required to display the
official sign in accordance with the applicable signage requirements
for each area as provided in Sec. 328.3(b).
Display of Official Sign When Deposits Received at Teller Windows or
Stations
Proposed Rule
Under the proposed rule, if IDIs usually and normally receive
deposits at teller windows or stations, IDIs would have been required
to display the official sign at each teller window or station in a size
of 7'' by 3'' or larger with black lettering on a gold background. The
proposed rule would also have allowed flexibility with respect to
display of the official sign where the IDI usually and normally
receives deposits at teller windows or stations and only offers insured
deposit products on the premises. In such instances, an IDI would have
the option to display the official sign at one or more locations
visible from the teller windows or stations in a manner that ensures a
copy of the official sign is large enough so as to be legible from
anywhere in that area.
Discussion of Comments
One commenter suggested that the FDIC provide IDIs with flexibility
to display clear and conspicuous signage and disclosures best suited
for a particular branch facility. The commenter further stated that
branch managers and other employees are readily available onsite to
answer customer questions and address any confusion to the extent a
customer may have questions, even with the presence of clear,
conspicuous disclosures.
With respect to IDIs that only offer insured deposit products on
the premises, one commenter requested clarification as to whether the
proposed flexible option would apply if the IDI's larger locations
offer non-deposit products. The same commenter also commended the FDIC
for providing flexibility in signage placement but sought an example of
what the FDIC would consider a sign ``large enough to be legible from
anywhere in that area'' to satisfy this flexible option.
Final Rule
The FDIC is finalizing the proposed requirements with respect to
the display of the official sign when IDIs usually and normally receive
deposits at teller windows or stations. The final rule will continue to
require that IDIs display the official sign at each teller window or
station in a size of 7'' by 3'' or larger, with black lettering on a
gold background, if insured deposits are usually and normally received
at teller windows or stations.
As provided under the proposal, the FDIC believes that it is
appropriate to allow additional flexibility with respect to display of
the official sign in instances when the IDI usually and normally
receives deposits at teller windows and stations and only offers
insured deposit products on the premises. In such cases, the
requirement to display the official sign at each teller window or
station may be satisfied by displaying the official sign in one or more
locations visible from the teller windows or stations, in a size large
enough to be legible from anywhere in that area. This flexible option
would apply to branches that do not offer non-deposit products on the
premises even if the IDI's other locations offer non-deposit
products.\24\
---------------------------------------------------------------------------

\24\ See infra Non-Deposits Sign on IDI's Premises Section for
discussion on the offering of non-deposit products.
---------------------------------------------------------------------------

Under the final rule, whether the display of the official sign is
``large enough to be legible from anywhere in that area'' means that
the average customer can easily see and read the sign from a reasonable
distance from that area. This would depend on factors specific to the
layout of the bank's physical premises or places of business and the
sign used, such as the size and shape of the physical location, the
area where deposits are usually and normally accepted, a sign's
placement, a sign's size, and its font and colors. For example, if a
bank's place of business has two teller windows right next to each
other and it posts one official sign between the teller windows that is
large enough to be legible to depositors at both teller windows, that
approach would meet the standard. Banks' places of business vary
significantly in size and layout, and the final rule is intended to
provide banks the flexibility to account for these physical variations.
Display of Official Sign When Deposits Received in Areas Other Than
Teller Windows or Stations
Proposed Rule
Under the proposal, if an IDI usually and normally receives
deposits in areas of the premises other than teller windows or
stations, IDIs would have been required to display the official sign in
one or more locations in a manner that ensures the official sign is
large enough so as to be legible from anywhere in those areas.
Discussion of Comments
As discussed above, a commenter suggested that non-branch locations
should not be subject to the proposed rule's sign requirements.
Final Rule
Consistent with the proposal, the final rule provides that if
insured deposits are usually and normally received in areas of the
premises other than teller windows or stations (e.g., caf[eacute]-style
locations), the IDI is required to display the official sign in one or
more locations in a size large enough to be legible anywhere in those
deposit-taking areas.\25\ The FDIC believes that such a requirement
will help ensure that IDI customers are aware that their deposits are
protected by deposit insurance.
---------------------------------------------------------------------------

\25\ As discussed, whether the display of the official sign is
``large enough to be legible from anywhere in that area'' means that
the average customer can easily see and read the sign from a
reasonable distance from that area depending on factors specific to
the layout of the bank's physical branch and the sign used, such as
the size and shape of the physical location, the area where deposits
are usually and normally accepted, a sign's placement, a sign`s
size, and its font and colors.
---------------------------------------------------------------------------

As discussed above, an IDI's premises, including non-branch
locations that receive deposits in areas other than teller windows or
stations, are subject to the final rule's requirements. For example, an
IDI's caf[eacute]-style location that does not receive deposits at a
teller window or station, but where customers engage with bankers in an
open area and customers have access to or transact with deposits, is
subject to the sign requirements under the final rule.
Non-Deposit Signage on an IDIs' Physical Premises
Proposed Rule
When both insured deposits and non-deposit products are offered
within the IDI's premises (regardless of whether deposits are received
at teller windows or stations or deposits are received in areas other
than teller windows or stations), the proposed rule would have required
IDIs to display a non-deposit sign within a segregated area and not in
close proximity to the official sign. The proposed rule would have
required that IDIs continuously, clearly, and conspicuously display
signage indicating that the non-deposit products: are not insured by
the FDIC; are not deposits; and may lose value.
Under the proposed rule, the definition of ``non-deposit product''
read as, ``Any product that is not a `deposit', including, but not
limited to: stocks, bonds, government and municipal securities, mutual
funds, annuities (fixed and variable), life

[[Page 3509]]

insurance policies (whole and variable), savings bonds, and crypto-
assets. For purposes of this definition, a credit product is not a non-
deposit product.'' \26\
---------------------------------------------------------------------------

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

Discussion of Comments
Non-deposit product definition. One commenter requested
clarification on what products constitute a non-deposit product under
the proposed rule, such that they would require the display of the non-
deposit sign. Specifically, the commenter noted the proposal only
included life insurance policies that are whole or variable and
requested clarification as to whether other types of insurance
offerings are also included in the definition. Moreover, the commenter
requested clarification on whether safe deposit box services would be
considered a non-deposit product requiring the display of the non-
deposit sign.
Non-deposit sign design. With respect to the design of the non-
deposit sign, one commenter stated that it would not be necessary for
the FDIC to fully standardize the design, but recommended the FDIC set
minimum standards for the sign such as a minimum font size. Another
commenter supported standardization of the non-deposit sign and
suggested a standardized icon, such as the red circle-backslash symbol
overlaid on the word ``FDIC'' or ``FDIC-insured'' with the phrase ``NOT
FDIC-insured'' underneath the symbol.
Display of non-deposit sign. Some commenters requested that the
FDIC take a less prescriptive approach with respect to the non-deposit
sign requirements and adopt a more flexible approach that can change
with evolving technology and business practices. Two commenters
suggested that the FDIC adopt a single, centralized disclosure approach
to address deposit and non-deposit products rather than separate
signage requirements. Another commenter raised concerns that the costs
of segregating physical signage across multiple branch locations would
be challenging in smaller branch locations and requested further
clarification when separation would be required for institutions with
various service offerings.
One commenter requested the FDIC define the term ``offers'' in
relation to the offering of non-deposit products on the IDI's physical
premises that would require the display of the non-deposit sign. The
commenter stated that they understood ``offers'' to mean that the bank
has personnel on the premises who are licensed to sell non-deposit
products but would exclude locations without onsite staff licensed to
sell non-deposit products.
Final Rule
The FDIC is finalizing the proposed requirement to display non-
deposit signs when both insured deposits and non-deposit products are
offered within the IDI's premises. The final rule's non-deposit sign
requirement applies to both an IDI's places of business where deposits
are received at teller windows or stations and an IDI's places of
business where deposits are received in areas other than teller windows
or stations (e.g., caf[eacute]-style locations). Under the final rule
an IDI generally must physically segregate the areas where non-deposit
products are offered from areas where insured deposits are usually and
normally accepted, and display a sign in the non-deposit areas
indicating that non-deposit products: are not insured by the FDIC; are
not deposits; and may lose value.\27\ An IDI is required to
continuously, clearly, and conspicuously display this non-deposit sign;
however, the final rule does not include specific design or size
requirements. To minimize the potential for consumer confusion, the
final rule prohibits display of non-deposit signs in close proximity to
the official FDIC sign.
---------------------------------------------------------------------------

\27\ As noted above, this requirement is intended to be
generally consistent with longstanding interagency guidance on the
retail sale of non-deposit investment products that many
institutions already follow and thus should be familiar to many
consumers.
---------------------------------------------------------------------------

Non-Deposit Product Definition
Through the proposed rule, the FDIC intended to provide further
clarity on the types of products that would constitute non-deposit
products. In response to comments related to the non-deposit
definition, the FDIC acknowledges that the proposed definition, as
written, could be read as excluding products that would otherwise
constitute a non-deposit product. Accordingly, the final rule generally
retains the current non-deposit definition with minor changes,
discussed in further detail below.
The final rule defines a non-deposit product as: ``[A]ny product
that is not a `deposit', including, but not limited to: insurance
products, annuities, mutual funds, securities, and crypto-assets. For
purposes of this definition, credit products and safe deposit box
services are not non-deposit products.'' \28\
---------------------------------------------------------------------------

\28\ Final Sec. Sec. 328.1, 328.101.
---------------------------------------------------------------------------

The definition under the final rule provides a non-exclusive list
of general examples of the types of products that constitute non-
deposit products that is consistent with the long-standing definition,
updated to include ``crypto-assets.'' \29\ However, the FDIC agrees
with a commenter that safe deposit boxes should not be included in the
definition for purposes of requiring display of the non-deposit sign
under part 328, Subpart A, and has revised the definition under the
final rule to clarify the treatment of safe deposit boxes.\30\ Banks
have a longstanding history of providing safe deposit box services to
consumers to store valuables in a private, secure section of the bank.
Accordingly, IDIs are not required to display the non-deposit sign in
areas where IDIs provide safe deposit boxes and offer no other non-
deposit products.
---------------------------------------------------------------------------

\29\ See infra Crypto-Assets Section for further discussion.
\30\ For purposes of part 328, subpart B, the ``non-deposit
definition'' includes safe deposit boxes.
---------------------------------------------------------------------------

Design of Non-Deposit Sign
Consistent with the proposal, the final rule requires IDIs that
offer both deposit and non-deposit products at their physical premises
to display a non-deposit sign in a continuous, clear, and conspicuous
manner with information indicating that non-deposit products: are not
insured by the FDIC; are not deposits; and may lose value. The FDIC is
not standardizing the design of the non-deposit sign as the FDIC
believes the rule strikes a proper balance in providing IDIs
flexibility, but also helps prevent consumer confusion by requiring
signs informing consumers of the risks associated with non-deposit
products. With respect to the comment to use red circle-backslash over
``FDIC'' or ``FDIC-insured,'' the FDIC views the suggestion as
potentially confusing to consumers. With respect to the recommendation
that the FDIC set minimum standards for the sign such as a minimum font
size, the final rule, as proposed, requires that the sign be displayed
in a continuous, clear, and conspicuous manner. As such, the FDIC
believes this standard will help mitigate potential concerns regarding
minimum font sizes and standards to ensure that consumers are able to
view clearly the non-deposit sign. Accordingly, the FDIC is not
adopting this recommendation and is not standardizing the design of the
non-deposit sign.
Display of the Non-Deposit Sign
Under the final rule, the FDIC requires IDIs that offer both
insured deposits and non-deposit products to clearly delineate and
distinguish areas where activities related to the sale of non-deposit
products occur from the

[[Page 3510]]

areas where insured deposit-taking activities occur. The FDIC believes
requiring display of the non-deposit sign in a physically segregated
area would more effectively mitigate the potential for consumer
confusion than a centralized disclosure as recommended by some
commenters, as it would better alert consumers when products are not
insured. Further, given that the final rule does not require
standardization of the non-deposit sign and provides IDIs flexibility
regarding the design of the non-deposit sign, the FDIC believes that
the approach taken in the final rule is responsive to commenter
concerns on flexibility.
With respect to comments noting concerns on the costs of
segregating physical signage across multiple locations and requesting
further clarification on when separation would be required, the non-
deposit sign requirement is intended to be generally consistent with
practices described in the longstanding interagency guidance on the
retail sale of non-deposit investment products.\31\ As a result, the
FDIC has added a provision to the final rule, generally consistent with
longstanding guidance, noting that in limited situations in which
physical considerations present challenges to offering non-deposit
products in a distinct area, institutions must take prudent and
reasonable steps to minimize customer confusion. This guidance has
informed many institutions' current approaches, and thus should be
familiar to many IDIs and consumers.
---------------------------------------------------------------------------

\31\ See Interagency Statement on Retail Sales of Non-deposit
Investment Products, FIL-9-94 (Feb. 17, 1994), available at: <a href="https://www.fdic.gov/news/financial-institution-letters/1994/fil9409.html">https://www.fdic.gov/news/financial-institution-letters/1994/fil9409.html</a>.
---------------------------------------------------------------------------

Consistent with the interagency guidance, the FDIC expects IDIs to
minimize the possibility of consumer confusion when delineating the
areas where non-deposit activities take place from areas where insured
deposit-taking activities occur. The FDIC intends for the delineation
requirement to include some flexibility, depending on the
circumstances. For example, IDIs could conduct non-deposit related
activity in separate areas or in areas that are not in close proximity
to where deposits are taken by using a desk, cubicle, partitions,
railings, planters, a separate room, or other indicator that the area
is distinct and separate from the deposit-taking area. In the limited
situations where IDIs experience challenges in physically segregating
products, IDIs must take prudent and reasonable steps to minimize
consumer confusion, consistent with the regulation's requirements.
In response to the commenter requesting clarification on the term
``offers'' for purposes of displaying the non-deposit sign under part
328, the FDIC interprets ``offers'' to capture situations where
customers are presented with or sold non-deposit products within an
IDI's physical premises. This could include situations where personnel
are not physically present on the bank premises, but the IDI presents
or sells non-deposit products to consumers within the bank's premises.
As an example, non-deposit signs are required in areas where the
consumer is offered non-deposit products within an IDI's physical
premises by personnel through an electronic communication device (e.g.,
an interactive kiosk or tablet).
Relevance of Non-Deposit Sign Requirements to Interagency Statement of
Policy
The federal banking agencies have previously issued guidance to
IDIs they supervise relating to the retail sale of non-deposit
investment products.\32\ The FDIC's proposed rule stated that its non-
deposit sign requirement was intended to be consistent with the
practices described in this longstanding interagency guidance.
Specifically, the proposed rule's non-deposit sign requirements were
similar to disclosures related to sales of non-deposit products
described in the interagency guidance.
---------------------------------------------------------------------------

\32\ Id.
---------------------------------------------------------------------------

Use of Electronic Media or Varied Signs To Satisfy Official Sign and
Non-Deposit Sign Requirements on IDIs' Premises
Proposed Rule
Under the proposed rule, IDIs would have had the option to display
the official sign and non-deposit sign through the use of electronic
media. The proposed rule also would retain certain provisions of
existing regulations that provide IDIs with flexibility in displaying
the official sign. Under the proposal, IDIs would have the option to
display the official sign in locations on the premises other than those
required under the rule, except for in areas where non-deposit products
are offered. For locations where display of the official sign is
required, IDIs could choose to display signs that vary from the
official sign in size, color, or material, provided that the sign is no
smaller than the official sign, has the same color for the text and
graphics, and includes the same content.
Discussion of Comments
Commenters supported the proposed option to use electronic media to
display the official sign and non-deposit sign. One commenter
recommended that the FDIC produce educational, captioned consumer
videos to be displayed on digital signage within an IDI's lobby.
Final Rule
The final rule adopts the proposal to provide IDIs the flexibility
to utilize electronic media to satisfy sign requirements on an IDI's
premises. This provision allowing IDIs to use electronic signs applies
to both display of the official sign and non-deposit signage, where
required, and would similarly be subject to the continuous, clear, and
conspicuous display standard. Accordingly, a rotating display will not
satisfy the ``continuous'' requirement applicable to the display of
official sign and non-deposit sign.
The final rule also retains certain provisions of current
regulations that provide IDIs with flexibility in displaying the
official sign. IDIs have the option to display the official sign in
locations on the premises other than those required under the rule,
except for in areas where non-deposit products are offered. For
locations where display of the official sign is required, IDIs may
choose to display signs that vary from the official sign in size,
color, or material, provided that the sign is no smaller than the
official sign, has the same color for the text and graphics, and
includes the same content.
Under the final rule, the FDIC will not require IDIs to display
FDIC-produced videos within their physical premises. The FDIC is,
however, undertaking several efforts to educate consumers regarding
deposit insurance and the role of the FDIC, including a public
awareness campaign on deposit insurance launched in October 2023.\33\
---------------------------------------------------------------------------

\33\ FDIC's national consumer campaign (``Know Your Risk.
Protect Your Money''), available at: <a href="https://www.fdic.gov/news/campaigns/know-your-risk/index.html">https://www.fdic.gov/news/campaigns/know-your-risk/index.html</a>.
---------------------------------------------------------------------------

3. Sign Requirements for Digital Deposit-Taking Channels

The final rule will facilitate banks providing consumers with
clear, consistent, and accurate digital disclosures to promote
consumers' understanding of when they are interacting with an IDI and
when their funds are protected by the FDIC's deposit insurance
coverage. At the same time, the FDIC intends to permit some flexibility
for IDIs with respect to digital sign requirements. As such, the FDIC
is

[[Page 3511]]

finalizing sign requirements related to IDI digital channels, with some
changes and clarifications, as described below.
a. FDIC Official Digital Sign
Proposed Rule
Under the proposal, an IDI would have been required to clearly,
continuously, and conspicuously display a newly established digital
sign on the IDI's homepage, landing and login pages or screens, and
transactional pages or screens involving deposits, to the extent
applicable. The proposal further provided that a digital sign displayed
in a continuous manner, near the top of the relevant page or screen in
close proximity to the IDI's name, would be considered ``clear and
conspicuous.'' The proposed digital sign was intended to visually
communicate to consumers that they are conducting business with an IDI
rather than a non-bank. The proposal provided that the FDIC expected
the digital sign to be an abbreviated version of the official sign and
that it would prominently bear the name of the FDIC and the statement
that insured deposits are backed by the full faith and credit of the
U.S. Government.
Discussion of Comments
Some commenters raised concerns that the proposed changes in
digital signage design and placement were overly prescriptive and may
be difficult to implement due to technological and budgetary limits.
However, other commenters supported the proposed requirement, noting
the importance of ensuring that bank customers are made fully aware of
situations where deposit insurance is present and is separate and
distinct from product offerings that do not include deposit insurance.
With respect to the placement of the proposed digital sign on the
IDI's homepage, landing and login pages or screens, one commenter
offered that home pages and landing pages are not the primary point of
interaction between banks and customers, noting that home pages are
generally used for marketing, not customer transactions. As such, the
commenter believed only pages with transactional capacity should be
subject to the proposed signage requirement. Some commenters questioned
the necessity of displaying the same digital signage on each subsequent
screen after a customer has logged in, and thought that the rules were
unclear regarding internal transfer screens between FDIC-insured
products after log-in. One comment noted that having the digital sign
on login and other pages could imply to customers that deposit
insurance applies to all products on the website.
Several commenters recommended that the FDIC adopt a more flexible
approach where banks could place the digital sign on the bank's web
page. One commenter noted that many websites use a basic template that
carries through each successive web page and that template could
contain the required statement. To allow for further flexibility in
implementation and compliance, a commenter suggested that the FDIC add
a ``reasonable person test'' when assessing the digital signage
requirements in order to allow banks to continue to innovate. Another
commenter provided that there would be no significant difference for a
consumer in placing the FDIC official digital sign at the top of the
page in close proximity to the bank name, other than increased costs
for the IDIs. Other commenters supported the proposal to place the sign
at the top of the screen to comply with the clear and conspicuous
requirement.
The FDIC notes that a specific question was asked as part of the
NPR about the design of the digital sign but no comments were received
in response to this question.
Final Rule
After carefully considering the comments received, the FDIC is
adopting this part of the proposed rule as final and will require IDIs
to display the FDIC official digital sign ``clearly and conspicuously''
in a continuous manner, near the top of the relevant page or screen,
and in close proximity to the IDI's name. The FDIC is finalizing a
design for the FDIC official digital sign that consists of ``FDIC''
along with the following text: ``FDIC-Insured- Backed by the full faith
and credit of the U.S. Government.'' Below is the design for the FDIC
official digital sign under Sec. 328.5:
[GRAPHIC] [TIFF OMITTED] TR18JA24.000

The final rule establishes a clear standard to promote consistency
in the use and application of the FDIC official digital sign by IDIs.
The rule specifies the color, size, and font to establish an easily
recognizable, consistent digital sign to convey the certainty and
confidence historically provided by the FDIC official sign at banks'
teller windows. Recognizing the variability in the design and color of
IDI websites, the final rule also provides an alternative color if the
specified colors, navy blue and black, would not be legible against the
background design colors of the IDI's web page or mobile banking
application.
The final rule requires ``FDIC'' in the FDIC official digital sign
to be displayed with a wordmark size of 37.36 x 15.74px in navy blue
(hexadecimal color code #003256), with ``FDIC-Insured--Backed by the
full faith and credit of the U.S. Government'' in Source Sans Pro Web
font (regular 400 italic), 12.8px, displayed in black (hexadecimal
color code #000000) lettering. If the official FDIC digital sign in
these colors would be illegible due to the color of the background, the
final rule requires the ``FDIC'' and the one line of smaller type to
the right of ``FDIC'' to both be displayed in white (hexadecimal color
code #FFFFFF).
The FDIC official digital sign aligns with the statutory provisions
in section 18 of the FDI Act on the display of signage at each IDI's
principal place of business relating to the insurability of deposits
and, consistent with section 18 of the FDI Act, the FDIC official
digital sign includes a statement that insured deposits are backed by
the full faith and credit of the U.S. Government. The FDIC appreciates
the issues raised by commenters with respect to the FDIC official
digital sign, including supporting flexibility and ensuring the new
FDIC official digital sign does not cause depositor confusion. Given
the discussion above regarding the increased use of mobile banking, as
well as the FDIC's interest in protecting consumers, the FDIC believes
the requirement to display the FDIC official digital sign will promote
consumer confidence in the Nation's banking system and benefit IDIs by
assisting consumers in more easily identifying IDI websites.
The FDIC believes that the use of the FDIC official digital sign by
IDIs will assist consumers in better understanding when they are
conducting business with an IDI and when they are interacting with a
non-bank entity. Seeing the FDIC official digital sign on all IDI
websites and mobile applications will promote awareness that consumers
are doing business with FDIC-insured institutions. Display of the FDIC
official digital sign

[[Page 3512]]

by any non-bank third party would improperly imply that the non-bank is
FDIC-insured and would constitute a misrepresentation under part 328
subpart B.
The FDIC official digital sign must be displayed on the (1) initial
or homepage of the website or application, (2) landing or login pages,
and (3) pages where the customer may transact with deposits. For
example, the FDIC official digital sign should be displayed where an
IDI's mobile application allows customers to deposit checks remotely,
because this electronic space is in effect a digital teller window.
In response to comments related to technical issues and potential
costs, the FDIC recognizes the commenters' concerns. But several
comments also highlighted the importance and value of clear and
conspicuous signage to prevent consumer confusion. The FDIC believes
that the benefits of the FDIC official digital sign outweigh the
concerns about costs. To alleviate those concerns the FDIC is reviewing
options to provide IDIs with technical assistance or guidance to assist
in implementing the FDIC official digital sign requirements. The FDIC
will also review options to provide an image of the FDIC official
digital sign to IDIs upon request at no charge, similar to the process
by which the FDIC provides banks with physical official signs.
b. Digital Display of Non-Deposit Signage
Proposed Rule
Under the proposed rule, if a digital deposit-taking channel offers
access to deposits, as well as non-deposit products, IDIs would have
been required to clearly, continuously and conspicuously display a non-
deposit sign indicating that the non-deposit products: are not insured
by the FDIC; are not deposits; and may lose value.
To satisfy this proposed requirement, the proposed rule would have
required the continuous display of the non-deposit sign (referred to as
the ``static'' non-deposit sign) on each IDI page relating to non-
deposit products and prohibit displaying the non-deposit sign in close
proximity to the FDIC official digital sign. The FDIC would expect the
non-deposit signage to be in a prominent place, in an appropriate size,
and displayed in a continuous manner for any consumer accessing the
page to notice. The proposal provided, however, that institutions would
have flexibility in the way they market non-deposit products and did
not specify design or size requirements for this non-deposit sign.
In addition, under the proposed rule, IDIs would have been required
to display this non-deposit sign via a ``one-time'' notification when
consumers initially access a page related to non-deposit products
(referred to as the one-time notification). The notification would have
provided an initial, prominent display of the non-deposit information
to alert consumers that they are dealing with non-deposit products that
are not covered by FDIC insurance. Moreover, consumers would need to
take action to dismiss the notification before accessing the relevant
page or screen.
Discussion of Comments
Commenters generally recommended that the FDIC consider the costs
related to implementing the digital signage requirements for IDIs and
to ensure that the requirements are not overly burdensome for consumers
and the industry.
More specifically, several commenters raised concerns that the
increased digital signage requirements would increase costs for banks
without countervailing benefits for consumers. While agreeing with the
sentiment behind the proposed pop-up requirement, two commenters noted
that creating pop-ups can be operationally complex and may be
burdensome for smaller institutions to implement. Similarly, another
commenter raised technical concerns and suggested a reduction of the
repetitive disclosures.
One commenter recommended that the FDIC only finalize a requirement
for non-deposit disclosures to be included statically on the applicable
pages, and not require affirmative consumer action regarding such
disclosures.
Some commenters also stated that the proposed digital signage
requirements could lead to customer confusion and create a suboptimal
customer experience. Relatedly, another commenter stated that the
proposed digital pop-up message could degrade the customer experience
and may cause difficulties for screen readers used by disabled
customers.
One commenter expressed appreciation about the ability of ``pop-
ups'', ``speedbumps'', or ``overlays'' to notify consumers of non-
deposit products and ensure that they remain properly informed.
However, the commenter also asserted that to reflect the various
business models, products, and services, as well as adequately respect
the importance of a consumer's experience in the increasingly
competitive online financial services market, the FDIC should allow
banks to work with their non-bank partners to ensure proper disclosure
and ensure that these disclosures are properly applied to the various
online platforms and consumer experiences.
Several commenters supported the proposed requirements, noting that
it would be beneficial for customers to know a given entity's or
product's insured status. One commenter advocated for the FDIC to
require IDIs to explicitly mark every financial product as either
insured or non-insured and advocated for a more comprehensive
disclosure statement.
Non-Deposit Digital Signage in Final Rule: Requirements When Non-
Deposit Products and Deposit Products Are Offered Through Same Digital
Deposit-Taking Channel
After consideration of the comments responding to the proposed non-
deposit digital signage requirements, the FDIC is finalizing certain
aspects of the proposal and modifying other aspects as described below.
The FDIC is finalizing the requirement for IDIs to clearly and
conspicuously display the ``static'' non-deposit signage on its digital
deposit-taking channels. More specifically, if an IDI's digital
deposit-taking channel offers access to both deposits at the IDI and
non-deposit products, the IDI must clearly and conspicuously display
\34\ 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 on each IDI page relating to non-deposit products and may not
be displayed in close proximity to the FDIC digital sign. The static
non-deposit language described above will provide an important
disclosure aimed at addressing potential customer confusion regarding
the insured status of particular products offered by IDIs.
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\34\ Some IDIs currently display non-deposit disclosures in
small font near the bottom of web pages and application screens.
Consumers are unlikely to notice such disclosures and may mistakenly
believe that non-deposits products are covered by FDIC insurance.
Such display of non-deposit disclosures would not satisfy the clear,
continuous, and conspicuous display requirement of the proposed
rule.
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Separately, the FDIC acknowledges the commenters that discussed the
one-time non-deposit notification requirement increasing costs, being
operationally complex, and creating a suboptimal customer experience.
The FDIC has concluded that having two separate disclosures relating to
non-deposit products on an IDI's digital channel--the ``static''
signage and the one-time notification--are unnecessary.

[[Page 3513]]

One such disclosure will sufficiently inform consumers and mitigate
risks. As such, and in response to commenter concerns, the FDIC is only
retaining a part of the proposed one-time notification requirement and
is narrowing the scope for when the one-time notification is provided.
Under the final rule, IDIs will only be required to display a one-
time notification when a bank customer accesses non-deposit products
from a non-bank third party via an IDI's digital deposit-taking channel
such as through a hyperlink (or similar weblinking feature). For
example, if an IDI's digital channel offers a third party's securities
product that requires the bank customer to leave the IDI's website and
access the securities product on the third party's website, then the
IDI will be required to provide the bank customer with a ``one time''
notification before the customer leaves the IDI's digital channel.
Moreover, under the final rule, the ``one time'' notification
requirement will not apply broadly to all consumers accessing the IDI's
website; instead, it will only apply to bank customers that have logged
into their respective account at a particular IDI website. The ``one
time'' notification will be required per web session, which is the
period of interaction between a bank customer and the IDI's digital
channel, starting when the customer logs in and ending when the
customer logs off.
Consistent with the proposal, the ``one time'' notification must be
clearly and conspicuously displayed and indicate that the non-deposit
products: are not insured by the FDIC; are not deposits; and may lose
value. The one-time notification could include, for example, an IDI
using a ``pop-up'', ``speedbump'', or ``overlay'' that displays a
notification to the customer that the customer must dismiss before
accessing the content related to non-deposit products on the third
party's website.
Bank customers, who log in to their bank's website and can access
non-deposit products through their IDI's deposit-taking digital
channel, may click on a hyperlink that takes them to an IDI's non-
deposit page or click on a hyperlink that, unbeknownst to the customer,
causes them to leave the bank's website to access non-deposit products
offered or presented by a third party. From the FDIC's perspective,
this raises two areas of elevated risk regarding customer confusion and
potential harm because a bank customer is moving: (a) from an IDI to a
non-bank; and (b) from an FDIC-insured deposit area to a non-deposit
area. Further, bank customers that are accessing the third party's
website will not have the same benefit of the ``static'' non-deposit
signage that will be available on IDI digital channels.
As described above, one commenter recommended that the FDIC allow
banks to work with their non-bank partners to ensure proper disclosure
and ensure that these disclosures are properly applied to the various
online platforms and consumer experiences. Given that certain non-bank
third parties may offer both deposit products through a bank partner
and non-deposit products on its website, IDIs will have discretion to
provide customers with additional disclosure information as part of its
one-time notification related to products offered by the non-bank third
party, which may further minimize customer confusion.
The final rule's narrower, less burdensome, one-time non-deposit
notification responds to several commenters' concerns, while still
mitigating the broader consumer protection risks by enabling bank
customers to better understand when they are doing business with an IDI
and when their funds are protected by the FDIC's deposit insurance
coverage.
Regarding the comment about digital pop-up disclosures causing
issues for disabled customers that use screen readers, the FDIC
encourages IDIs to ensure that their pop-up notifications can be as
accessible to screen reader users as any other web content.

4. Automated Teller Machines and Similar Devices

Proposed Rule
The FDIC proposed amendments to update Sec. 328.4 signage
requirements for IDIs' ATMs and other remote electronic facilities that
receive deposits. The FDIC sought to ensure that depositors receive
necessary disclosures regarding deposit insurance as banks continue to
devise new ways to provide services to their customers. The proposed
rule intended to capture banking kiosks and other devices currently
defined as ``Remote Service Facilities'' \35\ that receive deposits.
This section of the proposed rule was not intended to address online
and mobile banking channels, which are considered ``digital deposit-
taking channels.''
---------------------------------------------------------------------------

\35\ ``Remote Service Facility'' includes any automated teller
machine, cash dispensing machine, point-of-sale terminal, or other
remote electronic facility where deposits are received. 12 CFR
328.2(a)(1)(ii).
---------------------------------------------------------------------------

The proposed rule would have required electronic display of the
FDIC official digital sign on IDIs' ATM and like devices. The proposed
rule provided that the official FDIC sign must be electronically
displayed clearly and conspicuously. ATMs and like devices would be
required, at a minimum, to display the FDIC official digital sign on
the home page or screen and each transaction page or screen relating to
deposits.
The proposed rule would have further required electronic non-
deposit signs where an IDI's ATM or like device both receives deposits
for an IDI and offers access to non-deposit products.\36\ In this
instance, the ATM or like device would be required to clearly,
continuously, and conspicuously display electronic disclosures
indicating that non-deposit products are not insured by the FDIC, are
not deposits, and may lose value. The proposed rule would have required
the display of these disclosures on each transaction page or screen
relating to non-deposit products.
---------------------------------------------------------------------------

\36\ The FDIC would not view postage stamps sold at ATMs to
require these disclosures.
---------------------------------------------------------------------------

Discussion of Comments
Generally, commenters expressed concern over the difficulty or cost
in implementing the proposed signage requirements for ATMs. Some
commenters noted that costs will disproportionately affect community
banks who rely on third-party vendors that provide ATM operating
software; one commenter noted that software changes take time, and
these vendors would be expected to prioritize large banks. Another
commenter noted that a handful of third-party vendors are utilized by
many banks, and the proposed changes would create supply bottlenecks as
digital platforms are individualized for each bank. Three commenters
specifically requested additional time--ranging from at least one year
to up to 18 months--in order to comply with any new requirements
imposed for physical or software signs on ATMs or similar devices.
Relatedly, another commenter urged the FDIC to consider allowing banks
to use a physical sign at their ATMs instead of an electronic one.
A few comments sought clarity or expressed concern on the scope of
the proposed ATM signage requirements. One commenter requested that the
FDIC clarify whether the proposed ATM provision would only apply to
ATMs and similar devices that receive deposits, excluding facilities
that only provide balance, transfer, or withdrawal capabilities.
Another commenter requested that the FDIC exclude Interactive Teller
Machines (ITMs) from the ATM and like devices requirements as the
commenter believed that ITMs do

[[Page 3514]]

not have any transaction screens visible and do not perform bank branch
functions. One commenter requested that the FDIC clarify whether non-
deposit signage requirements apply to the owner of the ATM and not the
depository bank, if they are not the same.
Commenters representing consumer groups were supportive of the
proposed rule changes relating to ATMs and similar devices. One
commenter believed the proposed rules were beneficial because consumers
do not have the opportunity to seek clarification from bank employees
at an ATM, like they would at a bank or bank branch. One commenter
advocated for more stringent signage requirements for ATMs,
recommending that the FDIC require IDIs to display disclosures on each
screen that references a deposit or non-deposit product.
Final Rule
The FDIC has carefully considered these comments and is adopting
certain parts of the proposed ATM signage requirements, with changes
discussed below. The FDIC appreciates the comments and concerns
provided regarding the costs of the proposed requirements and a need
for additional time and the impact of potential changes on community
banks who often rely on third parties to support operating and
maintaining ATMs. The FDIC believes that the benefits of the new ATM
signage requirements outweigh the potential costs; however, additional
flexibility is warranted in certain situations. The new ATM
requirements under the final rule will provide clear information to
consumers as to when they are engaging with insured deposit products
and when they are engaging with non-deposit products.
For an IDI's ATM or like device that receives deposits but does not
offer access to non-deposit products, the final rule provides
flexibility to meet the signage requirement by either (1) displaying
the FDIC official digital sign as described in Sec. 328.5 on ATM
screens, or (2) displaying the physical official sign as described in
Sec. 328.2 by attaching or posting it to the ATM. However, IDIs' ATMs
or like devices that accept deposits and are put into service after
January 1, 2025, must display the official digital sign (with no option
to satisfy the requirement through display of the physical official
sign). This approach provides IDIs with flexibility, consistent with
some comments the FDIC received, and provides additional time to make
related system and process revisions and updates.
For an IDI's ATM or like device that both receives deposits and
offers access to non-deposit products, the final rule requires that
such ATMs must: (a) display the official digital sign clearly,
continuously, and conspicuously on the home page or screen and on each
transaction page or screen relating to deposits; and (b) clearly,
continuously, and conspicuously indicate that non-deposit products are
not insured by the FDIC, are not deposits, and may lose value on each
transaction page or screen relating to non-deposit products by January
1, 2025. The FDIC believes that clear signs differentiating the insured
and uninsured products is important in this setting because customers
often interact with ATMs alone, including when bank branches are closed
or in areas that are isolated or where there are no bank branches. In
such situations bank customers would not have an opportunity to ask
clarifying questions of a bank representative or for bank staff to
ensure that customers fully understand whether a product is covered by
FDIC deposit insurance.
The final rule also provides that degraded or defaced physical
official signs would not meet the ``clearly, continuously, and
conspicuously'' standard. For example, an official sign defaced such
that portions are illegible would not ``clearly'' signal or notify
consumers that they are dealing with an FDIC-insured depository
institution's ATM. However, if an ATM's physical digital sign is, for
example, slightly diminished, minimally blemished, or superficially
damaged, these circumstances would be considered de minimis for the
purposes of determining whether a physical official sign meets the
``clearly, continuously, and conspicuous'' standard for the purposes of
compliance with the final rule.
In addition, the final rule includes specific design features of
the digital official sign, including specifics about colors, size, and
font which should assist in implementation. In response to the comments
on the scope of the rule, the final rule's ATM provisions apply to an
IDI's automated teller machines or other remote electronic facilities
that receive deposits. If an IDI's remote electronic facility receives
deposits and is labeled an ITM (instead of an ATM), the official sign
requirements in part 328 apply; however, if an ITM does not receive
deposits, it is not subject to the rule.
In some cases, where there is a deposit-taking ATM or like device,
the owner of the ATM and the IDI may not be the same. As noted above,
Sec. 328.4 applies to ``IDIs' automated teller machines or like
devices.'' In determining whether an ATM or like device is an IDI's,
the FDIC will consider circumstances such as the ATM or like device's
location, branding, whether it is operated by the IDI, and other
factors that reasonably indicate it is an IDI's ATM. Under the final
rule, for such in-scope ATMs and like devices, the official digital
sign and non-deposit signage requirements under Sec. 328.4 apply.
In response to the comment on recommending more stringent
requirements, the FDIC does not consider more stringent signage
requirements as necessary to achieve its policy goals. For certain in-
scope ATMs, the signage requirements under the final rule apply to each
transaction page or screen for deposits and, if applicable, non-deposit
products.

5. Official Advertising Statement for IDIs

Proposed Rule
The FDIC proposed limited amendments to the advertisement statement
requirements applicable to IDIs. Specifically, the FDIC proposed to
expand IDIs' options for use of a short advertising statement to
include the term ``FDIC-insured.''
Currently, IDIs must include the official advertising statement in
all advertisements that promote deposit products.\37\ The term
advertisement means a commercial message in any medium that is designed
to attract public attention or patronage to a product or business.\38\
The FDIC views this definition to include advertising published through
social media channels.
---------------------------------------------------------------------------

\37\ 12 CFR 328.3(c).
\38\ 12 CFR 328.3(a).
---------------------------------------------------------------------------

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 proposed to make a technical correction to the
reference to the deposit insurance limit found in paragraph (d)(10) of
the current regulation, which states that ``deposits or depositors are
insured by the Federal Deposit Insurance Corporation to at least
$100,000 for each depositor.'' \39\ As a technical correction, the
proposed rule would instead reference the standard maximum deposit
insurance amount (currently $250,000), as established by Congress.
---------------------------------------------------------------------------

\39\ 12 CFR 328.3(d)(10).

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[[Page 3515]]

Discussion of Comments
A comment letter submitted by several non-profit organizations
opposed the addition of the term ``FDIC-insured'' for use as a
shortened form of the official advertising statement and suggested that
IDIs continue to use the shortened forms of the advertising statement
found in the existing regulation (``Member of FDIC'' or ``Member
FDIC''). The commenters stated that when IDIs offer products that are
not FDIC-insured, their use of the term ``FDIC-insured'' could be
misleading and poses risk of consumer confusion. The commenters
asserted that the purported benefit to IDIs of increased flexibility is
not worth this risk of increased consumer confusion.
Final Rule
The FDIC appreciates the concern about risk of consumer confusion
stemming from use of the term ``FDIC-Insured.'' However, the FDIC
believes that restrictions on usage of the advertising statement
(including a shortened form) in connection with non-deposit products
sufficiently mitigate any risk of consumer confusion.
Specifically, IDIs are prohibited from using the official
advertising statement in any advertisement relating solely to non-
deposit products. IDIs are also prohibited from using the official
advertising statement in any advertisement relating solely to hybrid
products, which are products that have both deposit product features
and non-deposit product features. IDIs may use the official advertising
statement in advertisements containing information about both insured
deposit products and non-deposit or hybrid products, but are required
to clearly segregate the official advertising statement from any
portion of the advertisement that relates to the non-deposit products.
These restrictions are part of the existing regulation and were
included in the proposed rule. The FDIC is including these same
restrictions in the final rule, meaning that consumers should not, for
example, see statements indicating that a particular IDI is ``FDIC-
Insured'' made in connection with advertisements related solely to non-
deposit products.
The FDIC is finalizing the advertising statement provisions of the
final rule as proposed. Under the final rule, IDIs will have the option
to use ``FDIC-Insured'' as a short form of the official advertising
statement to satisfy advertising statement requirements. Subject to
limited exceptions, IDIs are required to include the official
advertising statement in all advertisements that promote either deposit
products and services or non-specific banking products and services
offered by the institution. The advertising statement must be in a size
and print to be clearly legible.
In addition, as noted in the proposed rule, the FDIC does not
intend for the digital sign requirement to overlap with the general
advertising statement requirements that apply to IDIs. For example, the
advertising statement would not be required on web pages where an IDI
displays the digital official sign, such as a homepage. In these
situations, under Sec. 328.6(d)(10), the advertising statement is
unnecessary because the inclusion of the digital official sign makes it
clear that the IDI is insured by the FDIC. However, IDIs remain
responsible for complying with the official advertising statement
requirements for other qualifying advertisements, including those
contained on other web pages.
As under existing regulations, the final rule provides that a non-
English equivalent of the official advertising statement may be used in
any advertisement, provided that the translation has the prior written
approval of the FDIC. The FDIC is also considering making available to
the public approved translations of the official advertising statement
in several common languages on its website or through other means in
the future to support IDIs' efforts to communicate with their non-
English-speaking customers.

6. Misrepresentations and Material Omissions by Any Person

Proposed Rule
Section 18(a)(4) of the FDI Act,\40\ and its implementing
regulations in subpart B to part 328,\41\ prohibit any person from
misusing the name or logo of the FDIC, engaging in false advertising,
and making knowing misrepresentations about deposit insurance. In the
NPR, the FDIC stated that it may be beneficial to provide further
clarity on the application of the statutory prohibition on
misrepresentations in specific situations where consumers may be misled
as to whether an entity is insured by the FDIC and the nature and
extent of deposit insurance coverage. The FDIC proposed to amend
subpart B to expressly address these situations, making clear when
specific statements or omissions constitute a misrepresentation under
section 18(a)(4).
---------------------------------------------------------------------------

\40\ See 12 U.S.C. 1828(a)(4).
\41\ See Sec. Sec. 328.100 through 328.109.
---------------------------------------------------------------------------

Use of the Official Advertising Statement or FDIC-Associated Terms or
Images
Consumers have historically identified the use of the official
advertising statement (such as ``Member FDIC''), FDIC-Associated Terms,
or FDIC-Associated Images to signify that they are dealing with an IDI
and will receive the protection of FDIC deposit insurance. The official
advertising statement, FDIC-Associated Terms, and FDIC-Associated
Images have increasingly been used by non-banks that purport to deposit
their customers' funds at IDIs. As discussed in the NPR, the FDIC
believes that use of the official advertisement, FDIC-Associated Terms,
or FDIC-Associated Images in such instances presents a high risk of
confusing consumers as to whether they are dealing with an IDI and
whether deposit insurance applies to their funds.
To address this risk, the proposed rule would have amended Sec.
328.102(a) and Sec. 328.102(b) to clarify specific circumstances under
which use of the official advertising statement, FDIC-Associated Terms,
or FDIC-Associated Images by a non-bank would constitute a
misrepresentation of insured status as it would inaccurately imply that
the non-bank is FDIC-insured. For example, under the proposed rule, a
non-bank's use of the ``Member FDIC'' logo on its website or in its
marketing materials would have been a misrepresentation unless that
logo is next to the name of one or more IDIs. The NPR also stated that
a non-bank's use of either the FDIC official sign or the FDIC official
digital sign would be a misrepresentation if it inaccurately implies
that the non-bank is insured by the FDIC and backed by the full faith
and credit of the U.S. Government. Similarly, the NPR stated that a
non-bank's use of FDIC-Associated Terms in statements suggesting that
the non-bank is insured by the FDIC would constitute a
misrepresentation.\42\
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\42\ These examples are intended to be illustrative, rather than
an exhaustive list of ways in which a non-bank might misrepresent
its insured status. Any use of the official advertising statement,
FDIC-Associated Terms, or FDIC-Associated Images that inaccurately
states or implies that the non-bank is insured by the FDIC will
violate the final rule.
---------------------------------------------------------------------------

Failure To Disclose That a Person Is a Non-Bank Is a Material Omission
When a Statement Is Made Regarding Deposit Insurance
Non-banks that purport to deposit their customers' funds at IDIs
sometimes make statements regarding deposit insurance coverage for
those funds. Absent additional context, to the extent such statements
suggest that FDIC

[[Page 3516]]

deposit insurance will protect consumers in the event of the non-bank's
insolvency, they likely misrepresent the insured status of the non-
bank. To minimize the risk of consumer confusion, the proposed rule
provided that if a non-bank makes statements regarding deposit
insurance for its customers, it is a material omission for the non-bank
to fail to clearly and conspicuously disclose that it is not itself an
FDIC-insured institution and that the FDIC's deposit insurance coverage
only protects against the failure of an FDIC-insured depository
institution. In the NPR, the FDIC stated that this additional
disclosure is necessary to prevent consumers from misinterpreting a
non-bank's assertions regarding deposit insurance coverage. The FDIC
noted that some non-banks already include such language on their
websites, often identifying the partner IDI through which banking
services are provided.\43\ The proposed rule did not prescribe specific
disclosure language; however, it explained that a statement that a
person is not an FDIC-insured bank and deposit insurance covers the
failure of an insured bank would be considered a clear statement for
purposes of this provision. The proposed rule aimed to give non-banks
that wish to make statements regarding deposit insurance coverage some
flexibility in how they communicate the required information.
---------------------------------------------------------------------------

\43\ 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 customers that non-deposit products are
eligible for deposit insurance coverage, which has led consumers to
believe, mistakenly, that their money or investments are protected by
deposit insurance. In the NPR, the FDIC stated it believes that where
banks or non-banks make statements regarding deposit insurance in a
context where deposits and non-deposit products are involved,
additional information is necessary to ensure that consumers understand
which products are subject to deposit insurance. To prevent consumer
confusion, the proposed rule provided that if a person makes statements
regarding deposit insurance in a context that involves both deposits
and non-deposit products, it is a material omission to fail to disclose
that non-deposit products are not insured by the FDIC, are not
deposits, and may lose value. For example, under the proposed rule, if
a non-bank's website offered customers the option to have their funds
deposited at an IDI and protected by deposit insurance or invested in
non-deposit products, it would be a material omission if the non-bank's
website failed to state that the non-deposit products are not insured
by the FDIC, are not deposits, and may lose value.
Failure To State That Requirements Apply to Pass-Through Deposit
Insurance
The FDIC has a long history of providing ``pass-through'' deposit
insurance coverage, meaning that deposits placed at an IDI by a third
party on behalf of one or more owners are insured as if deposited
directly at the IDI by the owner(s). Pass-through insurance allows each
owner of the funds in such an arrangement to be separately insured up
to the statutory deposit insurance limit, currently $250,000, even if
the total deposits of all owners (in the aggregate) exceeds the
$250,000 limit. Pass-through insurance only applies, however, if
certain regulatory requirements are satisfied.\44\
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\44\ See Sec. Sec. 330.5, 330.7. For pass-through deposit
insurance to apply, a consumer's funds must first be on deposit at
an IDI. In addition: (1) the deposit account records of the IDI must
disclose a basis for pass-through coverage, such as a custodial or
agency relationship; (2) the identities and interests of the actual
owners of the funds must be ascertainable either from the records of
the IDI or records maintained in good faith and in the regular
course of business by another party; and (3) the relationship that
provides the basis for pass-through deposit insurance coverage must
be genuine, with the deposited funds actually owned by the named
owners. Additional requirements apply to arrangements involving
multiple levels of relationships.
---------------------------------------------------------------------------

Arrangements that rely on pass-through insurance have become
increasingly common, with non-banks often claiming to provide the
protection of pass-through deposit insurance for consumers' funds. Such
representations, however, may be inaccurate, mislead consumers, and
fail to apprise them of the risk they face in the event that the pass-
through deposit insurance requirements have not been satisfied. If the
pass-through requirements are not met, consumers' funds may not be
fully insured in the event the IDI where their funds have been
deposited were to fail. In the NPR, the FDIC would have required that
parties that make statements regarding the application of pass-through
deposit insurance make additional disclosure to promote awareness of
this risk.
The proposed rule provided that if a person makes statements
regarding pass-through deposit insurance for its customers' funds, it
is a material omission to fail to clearly and conspicuously disclose
that certain conditions must be satisfied for pass-through deposit
insurance coverage to apply. The proposed rule would not require a
person making a statement regarding pass-through deposit insurance to
list the specific conditions that must be satisfied; simply referencing
that conditions must be satisfied would be sufficient under the
proposed rule. The proposed rule also did not prescribe specific
disclosure language, providing flexibility in how parties may wish to
express the required information. For example, under the proposed rule,
if a website for a financial product were to state that consumers'
funds are eligible for pass-through deposit insurance, it would be a
material omission to fail to clearly and conspicuously state that
certain conditions must be satisfied in order for pass-through
insurance to apply.
Discussion of Comments
Some commenters recommended that the rule require entities to
disclose certain information that they believed was necessary to avoid
material omissions when making statements about deposit insurance. For
example, one commenter suggested that the FDIC impose several specific
requirements, presumptions, and enforcement practices on any
advertising relating to digital assets. Another commenter suggested
that the FDIC prohibit non-banks from using the words ``banking'' and
``bank account'' to describe their products or services offered, and
that a non-bank's failure to comply should constitute a material
omission.
With respect to statements referencing deposit and non-deposit
products, one commenter suggested that the FDIC should make clear that
comparing an uninsured financial product to an insured one without
clearly and conspicuously noting the difference in insurance status is
a misrepresentation. Another commenter similarly suggested that it
would be a material omission for a non-bank to fail to disclose that
its non-deposit products are not FDIC-insured.

[[Page 3517]]

In connection with the proposed pass-through provision, one
commenter suggested that it should be a material omission for entities
that are not FDIC-insured to advertise pass-through deposit insurance
without setting forth all the conditions necessary to receive such
coverage. Another commenter suggested that requiring a clear and
conspicuous disclosure that certain conditions must be satisfied for
pass-through insurance, without more, could lead a depositor to wonder
what those conditions might be and question whether pass-through claims
will be honored.
One commenter requested confirmation as to whether hyperlinking
would be permissible for the required disclosures. Specifically, the
commenter requested confirmation that a non-bank entity placing
deposits through a deposit network would still be permitted to
hyperlink to the list of network banks to satisfy this provision under
the new rule, as previously stated in the preamble to the 2022 final
rule.\45\ The same commenter also requested confirmation that a non-
bank would be permitted to hyperlink to required disclosures that a
non-bank is not a bank and that pass-through insurance coverage is
subject to conditions.
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\45\ See 87 FR 33415, 33418 (June 2, 2022).
---------------------------------------------------------------------------

Final Rule
As generally provided in the proposal, with specific changes noted
below, the FDIC is amending subpart B to expressly address additional
examples that violate part 328, making clear when specific statements
or omissions constitute a misrepresentation under section 18(a)(4).
Moreover, the FDIC reiterates that the specific examples set forth in
the final rule are part of a non-exhaustive list of conduct that
violates part 328. The FDIC has the authority to take action against
conduct that constitutes a prohibited misrepresentation about deposit
insurance, regardless of whether it is among the non-exhaustive list of
examples included in the final rule.
The FDIC has been, and will continue to be, consistently proactive
in enforcing its requirements and taking appropriate action whenever it
becomes aware of prohibited conduct.
Use of the Official Advertising Statement or FDIC-Associated Terms or
Images
The final rule adopts the proposed amendments to Sec. 328.102 to
clarify specific circumstances under which use of the official
advertising statement, FDIC-Associated Terms, or FDIC-Associated Images
by a non-bank would constitute a misrepresentation of insured status.
In a technical change from the proposal, the final rule corrects an
amendment to Sec. 328.102. Proposed Sec. 328.102(b)(4)(i) stated,
without limitation, a false or misleading representation is deemed to
be material if it states, suggests, or implies that, ``A person or
Uninsured Financial Products are insured or guaranteed by the FDIC''.
The final rule corrects the reference to ``A person'' to ``A person
other than Insured Depository Institution'' and moves this amendment to
new Sec. 328.102(b)(1)(iv).\46\
---------------------------------------------------------------------------

\46\ See final 12 CFR 328.102(b)(4)(iv).
---------------------------------------------------------------------------

Failure To Disclose That a Person Is a Non-Bank Is a Material Omission
When a Statement Is Made Regarding Deposit Insurance
The FDIC is adopting the proposal that if a non-bank makes
statements regarding deposit insurance for its customers, it is a
material omission for the non-bank to fail to clearly and conspicuously
disclose that it is not itself an FDIC-insured institution and that the
FDIC's deposit insurance coverage only protects against the failure of
an FDIC-insured depository institution. With respect to the comment on
prohibiting non-banks from using the words ``banking'' and ``bank
account,'' the final rule's amendments to subpart B are limited to
addressing misrepresentations concerning deposit insurance, which is
the focus of section 18(a)(4) of the FDI Act. A non-bank's use of the
terms ``bank'' or ``banking account'' does not itself misrepresent
deposit insurance status. However, such usage may violate other laws,
including state banking laws or laws that address deceptive practices.
As stated above, the final rule makes clear that it is a
misrepresentation for an entity that is not insured by the FDIC to
state, suggest, or imply that it is FDIC-insured. Further, the final
rule specifically notes that the FDIC considers it to be a material
omission for an entity that is not an IDI to make statements about
deposit insurance without clearly and conspicuously disclosing that it
is not an IDI and that FDIC insurance only covers the failure of IDIs.
The FDIC concludes that these provisions adequately address commenters'
concerns regarding situations where an entity that is not FDIC-insured
suggests that it is.
Failure To State That Non-Deposit Products Are Not Insured by the FDIC
Is a Material Omission When a Statement Is Made Regarding Deposit
Insurance
The final rule adopts the proposal that, if a person makes
statements regarding deposit insurance in a context that involves both
deposits and non-deposit products, it is a material omission to fail to
disclose that non-deposit products are not insured by the FDIC, are not
deposits, and may lose value, subject to the clarifications below. The
FDIC believes that the final rule addresses commenters' concerns
regarding misrepresentations about uninsured financial products and
non-deposit products as the rule helps mitigate potential consumer
confusion when deposit insurance statements are made in the context of
deposit and non-deposit products. Under the final rule, if a non-bank's
website offered customers the option to have their funds deposited at
an IDI and protected by deposit insurance or invested in non-deposit
products in close proximity, it is a material omission if the non-
bank's website failed to state that the non-deposit products are not
insured by the FDIC, are not deposits, and may lose value.
Non-bank digital wallets. The FDIC recognizes that certain non-
banks offer payment products that are not FDIC-insured that allow
consumers to store, send, or receive fiat money, for example U.S.
dollars, electronically. While these products are not insured by the
FDIC and therefore are vulnerable to the risks related to the non-
bank's insolvency, they do not otherwise fluctuate in value.
Accordingly, the FDIC believes that requiring non-banks to disclose to
consumers that such products ``may lose value'' may not be beneficial.
As such, if a non-bank offers customers access to deposit products and
a digital wallet where funds placed in a digital wallet are not covered
by FDIC deposit insurance, it will not be a material omission for the
non-bank entity to not include ``may lose value'' with respect to such
digital wallet products. It will be a material omission for the non-
bank to fail to disclose that any such uninsured products are: ``not
insured by the FDIC and are not deposits''. The FDIC believes that a
disclosure that the product is not a deposit and not FDIC-insured
strikes a reasonable balance by providing consumers with sufficient
information if they utilize these digital wallet products from non-bank
entities that also offer deposit products. The FDIC also notes that if
the non-bank offers other non-deposit products as

[[Page 3518]]

defined by part 328, including non-deposit products as part of its
digital wallet on its website, it must disclose that the non-deposit
product ``may lose value'' in addition to disclosing that the products
are ``not a deposit, not FDIC insured''.
Proximity. It has been the FDIC's experience that it is more likely
that a consumer will be confused about the application of deposit
insurance to non-deposit products, when the deposit product is being
offered in close proximity to the non-deposit product by the non-bank.
For example, the FDIC has seen that some non-banks provide ``mixed
advertisements'' where deposit products and non-deposit products are
offered on the same web page or as part of a single social media post.
As such, the FDIC believes that such offerings, in close proximity,
represent clear scenarios where it would be a material omission for the
entity to fail to disclose that the non-deposit product is not insured
by the FDIC, is not a deposit, and may lose value.
Non-deposit products unrelated to financial or investment products.
The intent of this particular clarification in the final rule is to
ensure that consumers understand when deposit insurance applies,
particularly when a non-bank is offering both deposits and non-deposit
products. From the FDIC's experience, consumers are more likely to be
confused about the application of deposit insurance when a non-bank
offers deposit products and non-deposit products that are financial
products subject to investment risks. Services or products offered by a
non-bank that are unrelated to financial or investment products and
physical goods are generally not the type of non-deposit product that
would confuse consumers about deposit insurance. While the FDIC
generally would not expect non-banks offering these types of non-
deposit products to provide disclosures that the non-deposit product is
not insured by the FDIC, is not a deposit, and may lose value, the non-
bank is nevertheless prohibited from representing or implying that the
non-deposit products are insured or guaranteed by the FDIC.\47\
---------------------------------------------------------------------------

\47\ 12 CFR 328.102(a).
---------------------------------------------------------------------------

Failure To State That Requirements Apply to Pass-Through Deposit
Insurance
The FDIC is finalizing the proposal that if a person makes
statements regarding pass-through deposit insurance for its customers'
funds, it is a material omission to fail to clearly and conspicuously
disclose that certain conditions must be satisfied for pass-through
deposit insurance coverage to apply. Under the final rule, a person
making a statement regarding pass-through deposit insurance is not
required to list the specific conditions that must be satisfied; simply
referencing that conditions must be satisfied is sufficient. The final
rule also does not prescribe specific disclosure language, providing
flexibility as to how parties may express the required information.
With respect to the comments recommending that entities list all
the conditions necessary to receive pass-through coverage, the FDIC
believes that the final rule strikes an appropriate balance with making
consumers aware of the risks they face without inundating them with a
technical recitation of the pass-through conditions. Further, such
technical information may be impracticable for some types of
advertisements due to the amount of text required to adequately
disclose the requirements. The FDIC believes that the final rule's
approach reflects a better balance, as it puts consumers on notice that
pass-through insurance is not automatic or guaranteed and empowers them
to raise questions or concerns.
The FDIC remains concerned, however, that even with this notice, it
is challenging to consumers to assess the risks related to the
likelihood of receiving pass-through insurance given its technical
legal requirements. In addition, consumers would not have access to
banks' or non-banks' records to directly confirm that applicable
conditions have been met. Given these circumstances, the FDIC is
considering options for conducting qualitative consumer testing of
deposit insurance disclosure language, including regarding pass-through
coverage, to assess consumers' understanding and whether there are
other disclosure language options that are more effective and
beneficial for consumers. In the event the FDIC identifies disclosure
language through consumer testing that would improve consumer
understanding of the risks related to pass-through coverage, the FDIC
could consider options to promote use of the disclosure.
The FDIC is also considering whether additional public education
efforts would be valuable to help consumers understand the differences
in deposit insurance coverage when working with IDIs directly as
compared to non-bank entities. Earlier this year, the FDIC launched its
``Know your Risk. Protect your Money.'' national public awareness
campaign to help consumers better understand deposit insurance and how
it protects their money. This campaign complements the final rule's
intended purposes, including helping consumers understand when they are
interacting with an IDI and when their funds are protected by the
FDIC's deposit insurance coverage.
Hyperlinking to Material Information
In the NPR, the FDIC proposed to maintain the existing provision
that it is a material omission for a non-insured entity that advertises
deposit insurance to fail to identify the IDIs with which the
representing party has a direct or indirect business relationship for
the placement of deposits and into which the consumers' deposits may be
placed.\48\
---------------------------------------------------------------------------

\48\ See proposed 12 CFR 328.102(b)(5)(i).
---------------------------------------------------------------------------

As explained in the proposal, the FDIC is concerned that certain
business relationships between IDIs and non-banks may be confusing to
consumers and proposed to require clear disclosures that would better
inform consumers as to when their funds are protected by FDIC deposit
insurance. The proposed rule made clear that it is a prohibited
misrepresentation to fail to clearly and conspicuously disclose
material information necessary to avoid a false statement, suggestion,
or implication about deposit insurance. After considering the comment
received on hyperlinking to the list of network banks, the FDIC is
amending 12 CFR 328.102(b)(5)(i) in the final rule to expressly state
that it is a material omission for a non-insured entity that advertises
deposit insurance to fail to clearly and conspicuously identify the
IDIs with which the representing party has a direct or indirect
business relationship for the placement of deposits and into which the
consumers' deposits may be placed.\49\ The addition of this language
harmonizes this provision with the other specific examples in the final
rule and makes clear that information about where funds may be placed
must be clear and conspicuous. To the extent that a non-bank entity
places deposits through a deposit network, it may satisfy this
requirement by clearly and conspicuously identifying the deposit
network and each IDI in the deposit network or by providing a clear and
conspicuous hyperlink to a current list of all the IDIs that are part
of such a network.
---------------------------------------------------------------------------

\49\ See final 12 CFR 328.102(b)(5)(i) (emphasis added).
---------------------------------------------------------------------------

Further, the FDIC will evaluate the clear and conspicuous
requirement in the context of the statement the information is material
to, including the information's proximity, placement, and prominence in
relation to the statement.

[[Page 3519]]

In particular, the FDIC believes that Federal Trade Commission guidance
provides helpful principles for determining whether hyperlinks to the
list of deposit network IDIs are sufficiently clear and
conspicuous.\50\
---------------------------------------------------------------------------

\50\ See Federal Trade Commission, .com Disclosures: How to Make
Effective Disclosures in Digital Advertising, available at: <a href="https://www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-disclosures-information-about-online-advertising.pdf">https://www.ftc.gov/system/files/documents/plain-language/bus41-dot-com-disclosures-information-about-online-advertising.pdf</a>.
---------------------------------------------------------------------------

In response to the comment on hyperlinking to other disclosures,
the FDIC generally believes that hyperlinking to the required
disclosures--that a non-bank is not an FDIC-insured depository
institution, the FDIC's deposit insurance coverage only protects
against the failure of an FDIC-insured depository institution, and
pass-through insurance coverage is subject to conditions--would not
satisfy the ``clear and conspicuous'' standard in Sec. 328.102(b)(5)
under the final rule. Failure to include these disclosures with
statements regarding deposit insurance could result in consumer
confusion as to whether an entity is FDIC-insured and the extent of
deposit insurance coverage.

7. Policies and Procedures for IDIs

Proposed Rule
The FDIC proposed requirements for IDIs to establish written
policies and procedures to comply with part 328 that are commensurate
with the nature, size, complexity, scope, and potential risk of the
deposit-taking activities of the institution. As part of these policies
and procedures, IDIs would also need to include, as appropriate,
provisions related to monitoring and evaluating activities of persons
that provide deposit-related services to the IDI or offer the IDI's
deposit-related products or services to other parties.
a. Signs and Advertising Statement
The proposal provided that such policies and procedures could
include, for example, measures that an IDI would take to ensure
compliance with the proposed sign and advertising requirements when the
IDI changes its advertising strategy or engages with, or expands into,
new physical or digital deposit-taking channels. For example, this
could include, if applicable, establishing procedures to ensure that
the IDI's technology (e.g., websites and mobile applications) is
capable of implementing the proposed signs and advertisement statement
requirements across all digital deposit-taking channels.
b. Certain Third-Party Relationships and Misrepresentations
The proposal also provided that to the extent a third party has a
business relationship with, and is serving as a deposit-taking channel
for, an IDI, sound risk management would compel the IDI to be aware of
the activities of the third party to ensure that the availability of
deposit insurance is not being misrepresented. As such, the proposal
would have required IDIs, as appropriate, to establish policies and
procedures that include provisions related to the deposit-related
services that a third party provides to the IDI or deposit-related
products or services offered by the third party to other parties. These
policies and procedures would include, as appropriate, provisions
related to monitoring and evaluating whether such third parties are in
compliance with subpart B.
c. Reservation of Authority
The proposal reserved the FDIC's authority to take appropriate
actions, including supervisory or enforcement actions, against any
person that violates part 328. The existence of adequate policies and
procedures would not preclude the FDIC from taking actions against IDIs
or third parties to address violations.
Comments
Some commenters expressed concerns that the proposed policies and
procedures requirement was not aligned with existing interagency third-
party risk management guidance. In addition, commenters recommended
excluding non-contractual relationships from the scope of the rule and
clarifying that the involvement of non-marketing related deposit
services does not automatically implicate the proposed rule. Other
commenters requested the FDIC cover only third parties with a
contractual relationship with the IDI addressing the offering or sales
of the IDI's insured deposits, and only relationships involving
marketing and public dissemination of information on FDIC deposit
insurance. Another commenter requested that the FDIC exclude deposit
products traded in secondary markets, such as certificates of deposit,
because IDIs have no control over representations made to secondary
market purchasers.
Final Rule
Under 12 CFR 328.8, the FDIC is finalizing the policies and
procedures requirement for IDIs as proposed. As part of the final rule,
IDIs must establish and maintain written policies and procedures to
achieve compliance with part 328. Such policies and procedures must be
commensurate with the nature, size, complexity, scope, and potential
risk of the deposit-taking activities of the IDI and must include, as
appropriate, provisions related to monitoring and evaluating activities
of persons that provide deposit-related services to the IDI or offer
the IDI's deposit-related products or services to other parties.
This new requirement is consistent with the Interagency Guidance on
Third-Party Relationships: Risk Management that was issued earlier this
year.\51\ The interagency guidance underscores that a banking
organization's use of third parties can increase its risk, and that the
use of third parties does not diminish or remove a banking
organization's responsibility to perform all activities in a safe and
sound manner and in compliance with applicable laws and regulations,
including those related to consumer protection.
---------------------------------------------------------------------------

\51\ See 88 FR 37920 (June 9, 2023).
---------------------------------------------------------------------------

Here, the policies and procedures established and maintained by
IDIs will facilitate compliance with part 328, including by ensuring
that appropriate monitoring is conducted and evaluations are performed
regarding activities of certain persons that provide deposit-related
services to IDIs or offer an IDI's deposit products or services to
other parties. The policies and procedures will help ensure activities
are conducted in compliance with applicable laws and that IDIs are
aware of whether certain third parties are in violation of subpart B of
part 328. Having these policies and procedures in place will help
mitigate the risks of consumer harm and confusion, consistent with the
statutory purpose underlying section 18(a) of the FDI Act and the
FDIC's mission to maintain and promote public confidence in the banking
system.
IDIs should include reasonable provisions regarding compliance with
part 328 in their policies and procedures, including addressing for
example: the use of FDIC-Associated Terms or FDIC-Associated Images by
third parties in a manner that inaccurately states or implies that a
person other than an IDI is insured by FDIC; statements made that
represent or imply that an advertised product is insured by the FDIC
but fail to identify the IDI; and ensuring the marketing and
advertising information or materials presented or made available to
prospective depositors by third parties do not misrepresent the
insurability of the IDI's financial products. The FDIC

[[Page 3520]]

expects that IDIs, as appropriate, will implement, or enhance, current
policies and procedures related to training staff to review any
marketing and advertising materials about the IDI's deposit products
and services and to monitor and evaluate compliance with part 328.
With respect to the comments related to the scope of the third
parties' activities, IDIs should establish and maintain policies and
procedures to evaluate and monitor, as appropriate, any deposit
insurance-related representations made by third parties that provide
deposit-related services to the IDI or offer the IDI's deposit-related
products or services to other parties. More specifically, IDIs should
consider the extent to which their third-party relationships involve
representations or statements subject to part 328, and the role third
parties have in crafting or presenting such representations or
statements for prospective depositors. For example, a third-party
relationship for web hosting services may not warrant policies or
procedures for compliance with part 328 to the extent the third party
simply publishes and hosts content developed and directed by the IDI.
However, if the IDI offers a deposit account through or by a non-bank
third party on a consumer-facing website with the branding and
marketing of a non-bank third party, that third party may be making
representations to consumers to describe the product's characteristics
in a manner that is covered by part 328 subpart B. This would warrant
that the IDI include provisions in its policies and procedures to
monitor and evaluate compliance with part 328 by the third party. The
IDI should also consider steps that it would take to mitigate any
misrepresentations related to deposit insurance that could cause
potential consumer confusion and harm regarding a product provided by
the IDI.
Commenters also suggested that the policies and procedures
requirement should exclude non-contractual relationships. While the
FDIC understands that IDIs often have provisions in their contracts
with third parties to review certain marketing materials, the FDIC
believes that limiting the scope of this requirement to only situations
where IDIs have contractual relationships with third parties would not
capture IDI relationships with certain third parties that the rule is
intended to capture.
In response to commenter concerns about the scope of this
requirement, the FDIC notes that the policies and procedures related to
certain third parties are required to be commensurate with the nature,
size, complexity, scope, and potential risk of the deposit-taking
activities. With regard to third-party relationships, IDIs will be
expected to utilize a risk-based approach in determining the nature and
extent of the policies and procedures that are needed to monitor and
evaluate certain third parties' compliance with part 328 subpart B. For
example, there may be third parties that have long-standing, well-
established relationships with the IDI such that the third party has
been offering products and services on the IDI's behalf for many years
and appropriately representing deposit insurance. In such instances,
the IDI might deem the relationship to be one that warrants less
extensive monitoring and evaluation, depending on the relationship and
potential risk. The FDIC notes, however, that such relationships could
experience significant changes, including in personnel, risk management
philosophy, or new types of products offered, that may warrant more
extensive policies and procedures. Likewise, the IDI may be involved in
nascent relationships with novel arrangements and products that present
a greater risk of consumer confusion and warrant more extensive
monitoring and evaluation. As such, IDIs should ensure that the nature
and scope of the policies and procedures under the final rule are
tailored to the risks identified. The policies and procedures should
effectively identify, address, and mitigate potential deposit insurance
misrepresentations identified by the IDI. It is also prudent for
policies and procedures to include provisions ensuring that third
parties that provide marketing or joint marketing services, web and
other electronic channel design, or similar services, are aware of the
IDI's compliance responsibilities under part 328.
Finally, the FDIC notes that if a non-bank misrepresents deposit
insurance, the FDIC would still expect to devote attention to taking
action against the non-bank, formally or informally, under part 328
subpart B, regardless of the presence of a bank partner.

8. Crypto-Assets

Proposed Rule
Among other things, part 328 prohibits any person from representing
or implying that any uninsured financial product is insured or
guaranteed by the FDIC.\52\ This prohibition applies to advertisements,
publications, and other disseminations of information. The FDIC has
noted a number of misrepresentations of deposit insurance coverage for
crypto-assets,\53\ and proposed to amend part 328 to reinforce that
representations regarding deposit insurance in the crypto-asset
marketplace fall within its scope. Specifically, the FDIC proposed to
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.''
---------------------------------------------------------------------------

\52\ ``Uninsured Financial Product'' is currently defined to
include non-deposit products, hybrid products, investments,
securities, obligations, certificates, shares, or financial products
other than insured deposits.
\53\ See FDIC Press Release PR-60-2022, FDIC Issues Cease and
Desist Letters to Five Companies for Making Crypto Related False or
Misleading Representations About Deposit Insurance (Aug. 19, 2022);
FDIC Press Release PR-9-2023, FDIC Demands Four Entities Cease
Making False or Misleading Representations About Deposit Insurance
(Feb. 15, 2023).
---------------------------------------------------------------------------

The proposed rule also included 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.
Discussion of Comments
Commenters generally supported the FDIC's efforts to address
deposit insurance misrepresentations involving crypto-assets.
Commenters also supported including crypto-assets in the definition of
``uninsured financial product'' and applying disclosure requirements
for non-deposit products to crypto-assets. One commenter noted that
misrepresentations made by prominent crypto-related entities
demonstrate the necessity of the FDIC's proposed rules.
Commenters also raised concerns with the proposed definition of
``crypto-asset.'' A venture capital firm commented that the proposed
definition of ``crypto-asset'' was over inclusive and vague.
Specifically, the commenter explained that ``cryptographic techniques''
could refer to a variety of technologies not associated with the
crypto-asset ecosystem, such as the end-to-end encryption technology
that secures common communications applications. The commenter stated
that the broader context of the FDIC's proposal did not indicate an
intent to

[[Page 3521]]

capture such usage. The commenter recommended an alternative definition
and suggested that it did not present the same ambiguities as the
proposal, making the amendment to part 328 more practicable.
A trade association and a consortium composed of banks and
technology firms each raised the concern that the proposed definition
of ``crypto-asset'' could be problematic for banks that seek to employ
blockchain technology in offering their deposit products. These
commenters suggested that the proposed rule's broad definition of
``crypto-asset'' might be read to include a traditional deposit product
if the bank offering it were to employ blockchain technology. The
consortium stated that equating a traditional deposit product to the
crypto-asset products offered by non-banks would disadvantage regulated
financial institutions and deter banks from leveraging blockchain
technology to improve their products.
Another trade association stated that regulators will need to pay
close attention to the rapidly expanding landscape of bank products,
particularly offerings involving cryptocurrencies and tokenized assets
that reside on blockchains. The commenter further stated that as
tokenization increases in popularity, the risk of a traded asset being
confused with a bank deposit will increase as customers navigate
complex product offerings that blur the lines between bank deposits and
non-deposit products.
Final Rule
The FDIC recognizes that the proposed definition of ``crypto-
asset'' may have been over inclusive for the purposes of this
regulation. This definition was not intended to capture, for example,
the use of encrypted communications technology by firms developing or
offering financial products. As pointed out by commenters, however, the
proposed definition of ``crypto-asset'' included language (``any
digital asset implemented using cryptographic techniques'') susceptible
to a broad interpretation. The FDIC notes that the proposed definition
of ``crypto-asset'' was limited to ``digital asset[s]'' that are
implemented using cryptographic techniques, and it is not clear that
traditional deposit products could be considered ``digital assets.''
Nevertheless, the FDIC agrees that the proposed definition was somewhat
ambiguous in this respect.
While one commenter recommended an alternative definition for the
term ``crypto-asset,'' the FDIC is concerned that the commenter's
proposed two-part test--(1) that the asset confers economic,
proprietary, or access rights or powers, and (2) is recorded using a
cryptographically secured distributed ledger or similar technology--
could be too narrow to capture some digital assets that are broadly
recognized as crypto-assets by market participants today. This could be
interpreted to exempt digital assets lacking certain specific
characteristics from the regulations regarding misrepresentation of
deposit insurance, which would be inconsistent with the FDIC's policy
goals. The FDIC is also mindful that, as noted by a commenter, the
landscape of these products continues to evolve rapidly.
The FDIC further notes that the proposed definition of ``uninsured
financial product'' included any financial product that is not a
deposit. The definition's enumerated list of uninsured products serve
as examples, rather than an exhaustive list, of the products that are
not insured by the FDIC. In determining whether a particular product is
an ``uninsured financial product'' for purposes of part 328, the test
is whether that product falls within the statutory definition of
``deposit.'' \54\ The FDIC also notes that, of the products listed in
the proposed definition of ``uninsured financial product,'' only
``crypto-asset'' was specifically defined in the proposal.
---------------------------------------------------------------------------

\54\ See 12 U.S.C. 1813(l).
---------------------------------------------------------------------------

In light of this, the final rule adopts a more flexible approach
better suited to an evolving landscape. While ``crypto-asset'' is
included in the products listed in the definition of ``uninsured
financial product,'' the FDIC is not including a specific definition of
``crypto-asset'' in part 328. The FDIC believes this approach will
signal that representations regarding deposit insurance in the crypto-
asset marketplace are subject to the prohibitions of section 18(a) and
part 328, like other financial products, without relying on a specific
regulatory definition of ``crypto-asset'' that could quickly become
obsolete. The FDIC has publicly stated that crypto-assets are not
insured by the FDIC.\55\ As noted above, the test of whether a
particular financial product is an ``uninsured financial product'' will
continue to be based upon application of the statutory definition of
``deposit,'' and is by its nature fact specific.
---------------------------------------------------------------------------

\55\ See Fact Sheet, What the Public Needs to Know About FDIC
Deposit Insurance and Crypto Companies (July 28, 2022), available
at: <a href="https://www.fdic.gov/news/fact-sheets/crypto-fact-sheet-7-28-22.pdf">https://www.fdic.gov/news/fact-sheets/crypto-fact-sheet-7-28-22.pdf</a>. While blockchain technology may be used for purposes other
than the creation of crypto-assets, the FDIC is not expressing a
view with respect to whether a product employing such technology
could meet the definition of a ''deposit'' in this final rule.
---------------------------------------------------------------------------

D. Expected Effects

Costs

The costs of the final rule will be incurred by IDIs, as well as
some non-banks 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 4,654 IDIs operating
approximately 80 thousand branches in the United States.\56\ These IDIs
are currently subject to the existing requirements of part 328, so the
costs incurred by these IDIs due to the final rule will be limited to
activities to ensure compliance with the new provisions in the final
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.
---------------------------------------------------------------------------

\56\ Call Reports as of June 30, 2023.
---------------------------------------------------------------------------

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 and other
premises. 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 final rule, the FDIC
estimates that IDIs with less than $10 billion in assets will spend, on
average, approximately one hour per year to complete these activities
at each branch while IDIs with at least $10 billion in total
consolidated assets (assets) will spend, on average, approximately two
hours per year per branch, for a total estimated annual burden of
approximately 120 thousand hours per year across all IDIs \57\ at an

[[Page 3522]]

estimated annual cost of approximately $10 million.\58\
---------------------------------------------------------------------------

\57\ According to Call Reports as of June 30, 2023, there were
4,496 IDIs with assets less than $10 billion operating 33,479
branches and 158 IDIs with assets at least $10 billion operating
44,133 branches.
\58\ Dollar costs for this analysis are based on a $82.38 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 2022, and adjusted by 1.51
to include non-wage compensation and 1.05 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 2022 and June 2023. For this analysis, the FDIC uses
the following estimated occupational burden weights and occupational
hourly labor costs: 14.6 percent for executives and managers at
$131.66 per hour, 2.8 percent for lawyers at $169.85 per hour, 35.7
percent for compliance officers at $65.27 per hour, 28.5 percent for
IT professionals at $103.74 per hour, and 18.3 percent for clerical
workers at $37.09 per hour.
---------------------------------------------------------------------------

The costs of complying with the final rule's requirements for
digital deposit-taking channels will 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 final rule, the FDIC
estimates that, on average, IDIs will incur a one-time burden of sixty
hours to update their digital operations to incorporate the
requirements in the final rule, at an approximate cost of $23 million
for the industry.\59\ The FDIC also estimates that, in years subsequent
to the enactment of the final rule, IDIs with less than $10 billion in
assets will spend, on average, approximately ten additional hours per
year to comply with the digital deposit-taking operation requirements
of the final rule, while IDIs with at least $10 billion in assets will
spend, on average, approximately twenty additional hours per year, at
an estimated annual cost of approximately $4 million for the
industry.\60\
---------------------------------------------------------------------------

\59\ According to Call Reports as of June 30, 2023: $23 million
= 4,654 IDIs x 60 hours per IDI x $82.38 per hour.
\60\ According to Call Reports as of June 30, 2023: $4 million =
4,496 IDIs x 10 hours per IDI x $82.38 per hour + 158 IDIs x 20
hours per IDI x $82.38 per hour.
---------------------------------------------------------------------------

Finally, all IDIs must update their policies and procedures to
comply with the final rule. These policies and procedures are required
to 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 final rule, the FDIC estimates that,
on average, IDIs will incur a one-time burden of eighty hours to update
their policies and procedures to incorporate the requirements in the
final rule, at an approximately cost of $31 million for the
industry.\61\ The FDIC also estimates that, in years subsequent to the
enactment of the proposed rule, IDIs will spend, on average,
approximately seventeen additional hours per year to ensure that their
policies and procedures maintain compliance with the final rule,\62\ at
an estimated annual cost of approximately $7 million for the
industry.\63\ Based on the preceding analysis, the FDIC expects that
the banking industry will incur approximately $64 million in the first
year after adoption and approximately $20 million in each subsequent
year to comply with the amendments to part 328.
---------------------------------------------------------------------------

\61\ According to Call Reports as of June 30, 2023: $31 million
= 4,654 IDIs x 80 hours per IDI x $82.38 per hour.
\62\ 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.
\63\ According to Call Reports as of June 30, 2023: $7 million =
4,654 IDIs x 17 hours per IDI x $82.38 per hour.
---------------------------------------------------------------------------

Costs to Non-Banks
The FDIC does not have direct data on the number of non-banks that
will be affected by the final rule. FDIC staff believe that the non-
banks affected by the final rule 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 148,235 firms in these
NAICS industries in 2020, the most recent year for which such data is
available.\64\ 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-banks engaged in
such operations is likely considerably less than the number of IDIs.
For purposes of the final rule, the FDIC estimates that the number of
affected non-banks will be approximately one percent of firms in the
NAICS industries listed above. Therefore, the FDIC estimates that
approximately 1,500 non-banks will be affected by the proposed rule.
---------------------------------------------------------------------------

\64\ See United States Census Bureau, 2020 SUSB Annual Data
Tables by Establishment Industry, available at: <a href="https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html">https://www.census.gov/data/tables/2020/econ/susb/2020-susb-annual.html</a>,
last retrieved on October 23, 2023.
---------------------------------------------------------------------------

Non-banks have been statutorily prohibited from falsely
representing that uninsured financial products are FDIC-insured for
many years. Thus, the final rule will not create a new prohibition on
such misrepresentations, but will clarify the types of communications
that can materially misrepresent deposit insurance coverage. The non-
banks affected by the final rule may need to update their disclosures
and marketing materials to ensure that they neither misuse 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 final rule,
the FDIC estimates that, on average, each non-bank will spend an
additional 2.5 hours in the first year to implement these changes and
one hour per year to maintain compliance with the amendments to subpart
B, for a total cost of approximately $300 thousand for the first year
and $125 thousand for each subsequent year across all non-banks
affected by the rule.\65\
---------------------------------------------------------------------------

\65\ Assuming the same average hourly wage as calculated for
IDIs: 1,500 non-banks x 2.5 hours per non-bank x $82.38 per hour =
approximately $300 thousand. 1,500 non-banks x 1 hour per non-bank x
$82.38 per hour = approximately $125 thousand.
---------------------------------------------------------------------------

E. Benefits

Provided that affected entities are not already complying with
certain aspects of the final rule, the FDIC expects the final rule to
produce benefits for 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 is expected to help consumers to more clearly
understand when they are conducting business with IDIs and when their
funds are protected by FDIC deposit insurance, thereby helping them
avoid incurring financial losses as a result of investing in products
they mistakenly thought were FDIC-insured. The final rule will 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-banks, or where both non-deposit products and deposit
products are offered at the same location. The final rule will extend
these benefits to digital deposit-taking channels where physical
segregation is

[[Page 3523]]

not possible. The final rule will also require the clear, conspicuous,
and consistent use of the official FDIC sign and symbol in both
physical and digital locations. These requirements are expected to
enhance 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 may bolster
confidence in the U.S. banking sector.
As discussed previously, the final rule will further clarify the
FDIC's procedures for evaluating potential violations of section
18(a)(4). The final rule will generally be consistent with existing
practices used by the FDIC with respect to these matters. Furthermore,
the final rule will not affect the application of related criminal
prohibitions under 18 U.S.C. 709. Therefore, the FDIC believes that
this aspect of the final 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
final rule is likely to curtail instances in which IDIs or non-banks
potentially misuse or misrepresent the FDIC's name or logo.\66\
Consumers' uncertainty as to the safety of their funds may weaken the
confidence that underpins bank stability and our nation's broader
financial system. The final rule is likely to reduce the frequency of
these types of instances going forward. The FDIC does not have the data
to quantify 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.
---------------------------------------------------------------------------

\66\ There have been at least 165 such instances recently. See
FDIC, 2019 Annual Report, at 38 and FDIC, 2020 Annual Report, at 47.
---------------------------------------------------------------------------

The FDIC invited comment on the expected effects of the proposed
rule. Some commenters opined that burden costs borne by smaller banks
may be similar to or even higher than those borne by larger banks.
Other commenters noted that the increased digital signage requirements,
including the pop-up requirements, may require smaller banks to adopt
more complex and costly digital platforms. The FDIC recognizes that
there will be variation in the costs of compliance across banks and
that some small banks may incur higher compliance costs than others.
After consideration of the public comments, the final rule has narrowed
the one-time notification requirement to reduce the cost and complexity
while also achieving the relevant policy goals, and maintains the
hourly compliance estimates presented in the proposed rule. The cost
estimates described in this section reflect the FDIC's supervisory
experience that larger banks have, on average, higher costs for the
maintenance of signage at their physical branches and the maintenance
of their digital operations.

F. Alternatives Considered

The FDIC has considered a number of alternatives to the final rule
that could meet its objectives in this rulemaking, including proposals
suggested by commenters in response to the 2020 and 2021 RFIs and the
NPR. Some of these alternatives have been discussed above and
additional alternatives are described below. For the reasons described,
the FDIC views the final 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
final rule, including plain text signage and disclosure
requirements.\67\ As discussed above, the FDIC official 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.
---------------------------------------------------------------------------

\67\ 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 suggesting the FDIC require, 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.\68\ The FDIC believes that the
final 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 final
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 are
sufficient to permit advertising flexibility.
---------------------------------------------------------------------------

\68\ 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).
---------------------------------------------------------------------------

Additional Disclosures Requiring a Consumer's Signature for Non-Deposit
Products Offered Within an IDI's Physical Premises

One commenter recommended that the FDIC require written and oral
disclosures with respect to the sale or recommendation of any non-
deposit product offered within an IDI's premises and to require a
consumer's signature affirming their understanding. The FDIC believes
that such additional requirements would be overly burdensome for IDIs.
Accordingly, the final rule will not adopt this recommendation.
However, nothing contained in this regulation should be read to limit
the authority of any state or Federal agency or individual under any
other laws that may require such disclosures.

G. Administrative Law Matters

Regulatory Flexibility Act

The Regulatory Flexibility Act (RFA) generally requires an agency,
in connection with a final 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.\69\ However,
a final regulatory flexibility analysis is not required if the agency
certifies that the final 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 $850
million.\70\

[[Page 3524]]

Generally, the FDIC considers a significant economic impact 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 final rule will
not have a significant economic impact on a substantial number of small
entities.
---------------------------------------------------------------------------

\69\ 5 U.S.C. 601 et seq.
\70\ The SBA defines a small banking organization as having $850
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 69118, effective December 19, 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 insured depository institution's
affiliated and acquired assets, averaged over the preceding four
quarters, to determine whether the insured depository institution 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-banks 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 4,654 IDIs.\71\ Of these, approximately
3,373 are considered small entities for the purposes of RFA.\72\ These
small IDIs operate approximately 13 thousand deposit-taking offices.
The number of deposit-taking offices at each small IDI ranges 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, to 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 $82.38 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 fewer than 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 number of
small IDIs.
---------------------------------------------------------------------------

\71\ Call Reports as of June 30, 2023.
\72\ Id.
---------------------------------------------------------------------------

As described in the Expected Effects section, the FDIC estimates
that 1,500 non-banks would be affected by the final rule. The FDIC does
not have data on the number of non-banks that would be considered small
entities for the purposes of RFA. As a conservative estimate, the FDIC
assumes all 1,500 affected non-banks are small. As discussed in the
Expected Effects section, the FDIC estimates that each non-bank, on
average, would incur an additional 2.5 hours in the first year and 1
hour in each subsequent year to comply with the proposed amendments to
subpart B. At an estimated compensation rate of $82.38, the expected
costs of complying with the proposed rule would be less than $300 per
year per non-bank, on average.
The final rule may also affect private individuals who may
potentially misuse the FDIC name or logo or 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.

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 number. Certain provisions of the proposed
rule contain ``collection of information'' requirements within the
meaning of the PRA.\73\ The information collection requirements (IC)
contained in this final rule have been submitted to OMB for review and
approval by the FDIC under section 3507(d) of the PRA and section
1320.11 of OMB's implementing regulations (5 CFR part 1320) as a new
information collection.
---------------------------------------------------------------------------

\73\ 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: 3064-0219
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 final rule contains the following ten (10) information
collection requirements:
1. Signs within Institution Premises--Banks <$10B, 12 CFR 328.3
(Third-Party Disclosure; Mandatory). Section 328.3 imposes 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 differs 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 <ls-thn-eq>$10B, 12 CFR
328.3 (Third-Party Disclosure; Mandatory). Section 328.3 imposes 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 differs 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, Sec. Sec. 328.4 and 328.5 (Third-Party Disclosure;
Mandatory). Sections 328.4 and 328.5 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 rule. This IC captures the
burden for these implementation activities.
4. Signage for ATMs and Digital Deposit-taking Channels--Banks
<$10B--Ongoing, Sec. Sec. 328.4 and 328.5 (Third-Party Disclosure;
Mandatory). Sections 328.4 and 328.5 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

[[Page 3525]]

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 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
<ls-thn-eq>=$10B--Ongoing, Sec. Sec. 328.4 and 328.5 (Third-Party
Disclosure; Mandatory). Sections 328.4 and 328.5 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 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). Section 328.8 requires 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). Section 328.8 requires 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). Section
328.102(b)(5) requires covered non-banks 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
328.102(b)(5) (Third-Party Disclosure; Mandatory). Section
328.102(b)(5) requires covered non-banks 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 IDIs. According
to recent Call Reports, the FDIC supervised approximately 4,564
IDIs.\74\ These include 158 IDIs with assets at least $10 billion and
4,496 IDIs with assets less than $10 billion. Of these, 3,373 IDIs are
considered small entities for purposes of the Regulatory Flexibility
Act.
---------------------------------------------------------------------------

\74\ According to Call Reports as of June 30, 2023.
---------------------------------------------------------------------------

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, the FDIC estimates 4,496 annual respondents for IC 1
and 158 annual respondents for IC 2.
ICs 3 and 6 capture implementation burdens incurred by all 4,496
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, the FDIC
annualizes the counts of respondents by dividing the total number of
respondents by three. Thus, the FDIC estimates 1,551 annual respondents
for ICs 3 and 6.
ICs 4, 5, and 7 capture the ongoing PRA burdens incurred by the
4,496 IDIs with less than $10 billion in assets, the 158 IDIs with at
least $10 billion in assets, and all 4,654 IDIs, respectively. Ongoing
burdens are incurred in two of the three years after the rule would
become effective. The FDIC annualizes the counts of respondents
accordingly. Thus, the FDIC estimates 2,997 annual respondents for IC
4, 105 annual respondents for IC 5 and 3,103 annual respondents for IC
7.
ICs 8 and 9 capture PRA requirements incurred by non-banks. The
FDIC does not have direct data on the number of non-banks that would be
subject to part 328. The FDIC assumes that the affected non-banks 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). As discussed in the Expected
Effects section, there were 148,235 firms in these NAICS industries in
2020, the most recent year for which such data is available. However,
not all of these firms enter into agreements with IDIs or otherwise
engage in operations related to insured deposits; the FDIC assumes that
the number of non-banks 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-banks would
be approximately one percent of firms in the NAICS industries listed
above.

[[Page 3526]]

Therefore, the FDIC estimates that approximately 1,500 non-banks will
incur burdens associated with part 328. ICs 8 and 9 are implementation
and ongoing burdens, respectively. The FDIC annualizes the count of
respondents accordingly. Thus, the FDIC estimates 500 annual
respondents for IC 8 and 1,000 annual respondents for IC 9.
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. As OMB's system of record for PRA
burdens does not allow non-positive respondent counts, the FDIC uses an
annual respondent count 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, the 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 seven branches each, on average, while IDIs with assets
of at least $10 billion have approximately 279 branches each, on
average.\75\ Accordingly, the FDIC estimates seven responses per year
for IC 1 and 279 responses per year for IC 2.
---------------------------------------------------------------------------

\75\ According to Call Reports as of June 30, 2023, there were
4,496 IDIs with assets less than $10 billion operating 33,479
branches and 158 IDIs with assets at least $10 billion operating
44,133 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, the
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 is 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, the FDIC 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, the 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 comply
with part 328. Data on this burden is 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. The 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
328 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 is 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. The 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-banks'
third-party disclosures comply with part 328. Data on this burden is
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. The FDIC
estimates burdens as two and one-half hours per response for IC 8 and
one hour per response for IC 9.
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.

[[Page 3527]]

Summary of Estimated Annual PRA Burden
----------------------------------------------------------------------------------------------------------------
Average
Information collection Type of burden Number of number of Average time Annual burden
(obligation to respond) (frequency of respondents responses per per response (hours)
response) respondent (HH:MM)
----------------------------------------------------------------------------------------------------------------
1. Signs within Institution Third-Party 4,496 7 1:00 31,472
Premises--Banks <$10B, 12 CFR Disclosure
328.3 (Mandatory). (Annual).
2. Signs within Institution Third-Party 158 279 2:00 88,164
Premises--Banks >=$10B, 12 Disclosure
CFR 328.3 (Mandatory). (Annual).
3. Signage for ATMs and Third-Party 1,551 1 60:00 93,060
Digital Deposit-taking Disclosure
Channels--Implementation, 12 (Annual).
CFR 328.4 and .5 (Mandatory).
4. Signage for ATMs and Third-Party 2,997 1 10:00 29,970
Digital Deposit-taking Disclosure
Channels--Banks <$10B-- (Annual).
Ongoing, 12 CFR 328.4 and .5
(Mandatory).
5. Signage for ATMs and Third-Party 105 1 20:00 2,100
Digital Deposit-taking Disclosure
Channels--Banks >=$10B-- (Annual).
Ongoing, 12 CFR 328.4 and .5
(Mandatory).
6. Policies and Procedures-- Recordkeeping 1,551 1 80:00 124,080
Implementation, 12 CFR 328.8 (Annual).
(Mandatory).
7. Policies and Procedures-- Recordkeeping 3,103 1 12:00 37,236
Ongoing, 12 CFR 328.8 (Annual).
(Mandatory).
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 1,000 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--12 CFR
328.6(f) (Required to Obtain
or Retain a Benefit).
---------------------------------------------------------------
Total Annual Burden ................ .............. .............. .............. 408,334
(Hours).
----------------------------------------------------------------------------------------------------------------
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.

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.

Congressional Review Act

For purposes of the Congressional Review Act (5 U.S.C. 801 et
seq.), the OMB makes a determination as to whether a final rule
constitutes a ``major rule.'' If a rule is deemed a ``major rule'' by
the OMB, the Congressional Review Act generally provides that the rule
may not take effect until at least 60 days following its publication.
The Congressional Review Act defines a ``major rule'' as any rule that
the Administrator of the Office of Information and Regulatory Affairs
of the OMB finds has resulted in or is likely to result in: (1) an
annual effect on the economy of $100 million or more; (2) a major
increase in costs or prices for consumers, individual industries,
Federal, State, or local government agencies or geographic regions; or
(3) significant adverse effects on competition, employment, investment,
productivity, innovation, or on the ability of United States-based
enterprises to compete with foreign-based enterprises in domestic and
export markets.\76\ The FDIC has submitted the final rule to the OMB
for this major rule determination. As required by the Congressional
Review Act, the FDIC will also submit the final rule and other
appropriate reports to Congress and the Government Accountability
Office for review.\77\
---------------------------------------------------------------------------

\76\ See 5 U.S.C. 804(2).
\77\ See 5 U.S.C. 801(a)(1).
---------------------------------------------------------------------------

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 invited comment regarding the use of plain language, but did
not receive any comments on this topic.

List of Subjects in 12 CFR Part 328

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

[[Page 3528]]

Authority and Issuance

For the reasons stated in the preamble, the Federal Deposit
Insurance Corporation amends part 328 of title 12 of the Code of
Federal Regulations as follows:

PART 328--FDIC OFFICIAL SIGNS, ADVERTISEMENT OF MEMBERSHIP, FALSE
ADVERTISING, MISREPRESENTATION OF INSURED STATUS, AND MISUSE OF THE
FDIC'S NAME OR 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 the part heading to read as set forth above.

0
3. Revise subpart A to read as follows:
Subpart A--FDIC Official Signs and 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 Signs 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 signs 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.
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 websites, banking
applications, and any other 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: insurance products, annuities, mutual
funds, securities and crypto-assets. For purposes of this definition,
credit products and safe deposit boxes are not non-deposit products.

Sec. 328.2 Official sign.

(a) Design. Except as otherwise provided in this section, the
official sign referred to in this part shall be 7'' by 3'' in size,
with black lettering and gold background, and has the following design:
[GRAPHIC] [TIFF OMITTED] TR18JA24.001

(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, <a href="https://www.fdic.gov">https://www.fdic.gov</a>. 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 or color 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. Each insured depository institution
must continuously, clearly, and conspicuously display the official sign
at each place of business where

[[Page 3529]]

consumers have access to or transact with deposits, including all of
its branches (except branches excluded from the scope of this subpart
under Sec. 328.0) and other premises in which customers have access to
or transact with deposits, in the manner described in this paragraph
(b).
(1) Deposits received at teller windows or stations. If insured
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 insured deposits are
usually and normally received, in a size of 7'' by 3'' or larger with
black lettering on a gold background as described in Sec. 328.2(a); 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.
(c) Non-deposit products offered on insured depository institution
premises--
(1) Segregated areas. Except as provided in paragraph (c)(3) of
this section, 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
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.
(3) Physical area limitations. In limited situations where physical
considerations present challenges to offering non-deposit products in a
distinct area, an institution must take prudent and reasonable steps to
minimize customer confusion.
(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 Signs for automated teller machines and like devices.

(a) Scope. T

[…truncated; see source link]

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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.