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

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Call Reports as of June 30, 2023.

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 328

RIN 3064–AF26

FDIC Official Signs and Advertising

Requirements, False Advertising,

Misrepresentation of Insured Status,

and Misuse of the FDIC’s Name or

Logo

AGENCY

: Federal Deposit Insurance

Corporation.

ACTION

: Final rule.

SUMMARY

: The Federal Deposit

Insurance Corporation (FDIC) is

amending its regulations governing use

of the official FDIC sign and insured

depository institutions’ (IDIs)

advertising statements to reflect how

depositors conduct business with IDIs

today, including through digital and

mobile channels. The final rule also

clarifies the FDIC’s regulations

regarding misrepresentations of deposit

insurance coverage by addressing

specific scenarios where consumers may

be misled as to whether they are

conducting business with an IDI and

whether their funds are protected by

federal deposit insurance. The final rule

is intended to enable consumers to

better understand when they are

conducting business with an IDI and

when their funds are protected by the

FDIC’s deposit insurance coverage.

DATES

: The amendments made 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, LuBrown@

FDIC.gov; Meron Wondwosen, Chief,

Supervisory Policy, 202–898–7211,

[email protected]; Edward J.

Hof, Senior Policy Analyst, 202–898–

7213, [email protected]. Legal

Division: Vivek Khare, Counsel, 202–

898–6847, [email protected]; James

Watts, Counsel, 202–898–6678, JWatts@

FDIC.gov; Chantal Hernandez, Senior

Attorney, 202–898–7388,

[email protected].

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.

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

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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.

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.

See subpart A to 12 CFR part 328 (§§ 328.0

through 328.5–328.99).

See generally, 12 CFR part 328.

71 FR 66098 (Nov. 13, 2006).

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).

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.

87 FR 33415 (June 2, 2022); Subpart B to 12 CFR

part 328 (§§ 328.100 through 328.109). Subpart B

establishes the process by which the FDIC identifies

and investigates conduct that may violate section

18(a)(4), the standards under which such conduct

is evaluated, and the procedures the FDIC follows

when formally and informally enforcing the

provisions of section 18(a)(4).

Federal Deposit Insurance Corporation (FDIC),

2021 National Survey of Unbanked and

Underbanked Households (October 2022), https://

www.fdic.gov/analysis/household-survey/

2021report.pdf.

Id. at 25.

Id.

depositors and consumers,

promote

public confidence in insured deposits,

and prevent false and misleading

representations about the manner and

extent of FDIC deposit insurance.

Statutory Authority and Regulations

Sign and advertising statement

requirements for IDIs date back to the

Banking Act of 1935 and are now set

forth in section 18(a) of the Federal

Deposit Insurance Act (FDI Act).

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.

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.

The

FDIC last made major amendments to

these regulations in 2006.

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.

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.

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.

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.

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 cafe

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.

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.

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).

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.

Given that nearly

two-thirds of banked households

primarily access banking products

through phones, computers, and other

devices, the FDIC believes it is critical

to update its rules and provide

consistent sign requirements for digital

channels.

Banking customers are also offered an

increasingly wide array of financial

products and services, regardless of

whether they are in a branch, using an

ATM, or connecting with an IDI through

digital channels. In many instances, IDIs

offer both deposits and non-deposit

products to consumers. For example,

IDIs might allow depositors in their

branches to consult with an investment

adviser and purchase securities or

mutual funds. 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

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

9, 2021).

Comments to the RFIs can be found on the

FDIC’s website, available at: https://www.fdic.gov/

resources/regulations/federal-register-publications/

2020/2020-rfi-fdic-sign-and-advertising-

requirements-3064-za14.html and https://

www.fdic.gov/resources/regulations/federal-

sign-and-advertising-requirements-3064-za14.html.

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

87 FR 33415 (June 2, 2022).

A public list of FDIC cease and desist letters

related to violations of section 18(a)(4) of the FDI

Act can be found on the FDIC’s website, available

at: https://www.fdic.gov/resources/regulations/

laws/section-18a4-of-fdi-act/.

Comments can be accessed at: https://

www.fdic.gov/resources/regulations/federal-

advertising-requirements-3064-af26.html. In

response to a comment letter, the FDIC extended

the comment period by 45 days to provide

additional opportunity for the public to prepare

comments to address the matters raised by the NPR.

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.

In response to the

RFIs, the FDIC received 20 comments

from trade associations, IDIs, and

others.

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.

Previous Rulemaking

On May 17, 2022, the FDIC issued a

final rule adding a new subpart B to 12

CFR part 328.

The final rule describes:

(1) the process by which the FDIC will

identify and investigate conduct that

may violate the prohibitions against

misuse and misrepresentation; (2) the

standards under which such conduct

will be evaluated; and (3) the

procedures that the FDIC will follow

when formally and informally enforcing

these prohibitions. While this

rulemaking was an important step, the

FDIC has observed an increase in the

number of instances where financial

services providers or other entities or

individuals have misused the FDIC’s

name or logo or have made

misrepresentations about FDIC

insurance. 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.

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.

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.

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

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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).

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

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

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

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 § 328.3,

including the language that the official

sign must be in a size of 7″ by 3″ or

larger with black lettering on a gold

background. After further consideration,

the FDIC is including the official sign

size and color requirements as part of

the official sign description under

§ 328.2 for ease of reference under the

final rule. The FDIC also continues to

reference this language in the

requirements for display of the official

2. Sign Requirements on IDIs’ Physical

Premises

Official Sign In an IDI’s Physical

Premises

Proposed Rule

Section 18(a) of the FDI Act requires

all IDIs to display at each place of

business a sign or signs relating to the

insurance of the deposits of the

institution. The FDIC proposed updated

signage requirements in § 328.3 to

govern signage within an IDI’s premises.

The proposed rule would have

continued to require all IDIs to

continuously, clearly, and

conspicuously display the official sign

in their principal place of business and

all their U.S. branches.

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).

Discussion of Comments

One commenter suggested that the

FDIC eliminate references to ‘‘non-

traditional branches’’ and stated that

non-branch locations should not be

subject to the proposed rule’s sign

requirement. The commenter further

stated that the proposed rule’s

requirements for physical premises

would apply only to banks’ principal

place of business and branches. The

commenter expressed concerns that the

term ‘‘non-traditional branch’’ could be

over-inclusive and include non-branch

locations, like deposit production

offices.

Final Rule

The FDIC is revising § 328.3(b) to now

require that:

Each insured depository institution must

continuously, clearly, and conspicuously

display the official sign at each place of

business where consumers have access to or

transact with deposits, including all of its

branches (except branches excluded from the

scope of this subpart under § 328.0) and

other premises in which customers have

access to or transact with deposits, in the

manner described in this paragraph (b).

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.

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.

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., cafe

-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

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See infra Non-Deposits Sign on IDI’s Premises

Section for discussion on the offering of non-

deposit products.

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.

scenario where an IDI usually and

normally receives insured deposits at a

teller window or station and other areas

within the same premise, then pursuant

to the final rule, the IDI is required to

display the official sign in accordance

with the applicable signage

requirements for each area as provided

in § 328.3(b).

Display of Official Sign When Deposits

Received at Teller Windows or Stations

Proposed Rule

Under the proposed rule, if IDIs

usually and normally receive deposits at

teller windows or stations, IDIs would

have been required to display the

official sign at each teller window or

station in a size of 7″ by 3″ or larger with

black lettering on a gold 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.

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., cafe

-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.

The FDIC believes that such a

requirement will help ensure that IDI

customers are aware that their deposits

are protected by deposit insurance.

As discussed above, an IDI’s premises,

including non-branch locations that

receive deposits in areas other than

teller windows or stations, are subject to

the final rule’s requirements. For

example, an IDI’s cafe

-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

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

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.

Final §§ 328.1, 328.101.

See infra Crypto-Assets Section for further

discussion.

For purposes of part 328, subpart B, the ‘‘non-

deposit definition’’ includes safe deposit boxes.

insurance policies (whole and variable),

savings bonds, and crypto-assets. For

purposes of this definition, a credit

product is not a non-deposit

product.’’

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., cafe

-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.

An IDI

is required to continuously, clearly, and

conspicuously display this non-deposit

sign; however, the final rule does not

include specific design or size

requirements. To minimize the potential

for consumer confusion, the final rule

prohibits display of non-deposit signs in

close proximity to the official FDIC sign.

Non-Deposit Product Definition

Through the proposed rule, the FDIC

intended to provide further clarity on

the types of products that would

constitute non-deposit products. 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.’’

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.’’

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.

Banks have a longstanding history of

providing safe deposit box services to

consumers to store valuables in a

private, secure section of the bank.

Accordingly, IDIs are not required to

display the non-deposit sign in areas

where IDIs provide safe deposit boxes

and offer no other non-deposit products.

Design of Non-Deposit Sign

Consistent with the proposal, the final

rule requires IDIs that offer both deposit

and non-deposit products at their

physical premises to display a non-

deposit sign in a continuous, clear, and

conspicuous manner with information

indicating that non-deposit 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

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See Interagency Statement on Retail Sales of

Non-deposit Investment Products, FIL–9–94 (Feb.

17, 1994), available at: https://www.fdic.gov/news/

financial-institution-letters/1994/fil9409.html.

Id.

FDIC’s national consumer campaign (‘‘Know

Your Risk. Protect Your Money’’), available at:

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

risk/index.html.

areas where insured deposit-taking

activities occur. The FDIC believes

requiring display of the non-deposit

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.

As a result, the

FDIC has added a provision to the final

rule, generally consistent with

longstanding guidance, noting that in

limited situations in which physical

considerations present challenges to

offering non-deposit products in a

distinct area, institutions must take

prudent and reasonable steps to

minimize customer confusion. This

guidance has informed many

institutions’ current approaches, and

thus should be familiar to many IDIs

and consumers.

Consistent with the interagency

guidance, the FDIC expects IDIs to

minimize the possibility of consumer

confusion when delineating the areas

where non-deposit activities take place

from areas where insured deposit-taking

activities occur. The FDIC intends for

the delineation requirement to include

some flexibility, depending on the

circumstances. For example, IDIs could

conduct non-deposit related activity in

separate areas or in areas that are not in

close proximity to where deposits are

taken by using a desk, cubicle,

partitions, railings, planters, a separate

room, or other indicator that the area is

distinct and separate from the deposit-

taking area. 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.

The

FDIC’s proposed rule stated that its non-

deposit sign requirement was intended

to be consistent with the practices

described in this longstanding

interagency guidance. Specifically, the

proposed rule’s non-deposit sign

requirements were similar to disclosures

related to sales of non-deposit products

described in the interagency guidance.

Use of Electronic Media or Varied Signs

To Satisfy Official Sign and Non-

Deposit Sign Requirements on IDIs’

Premises

Proposed Rule

Under the proposed rule, IDIs would

have had the option to display the

official sign and non-deposit sign

through the use of electronic media. The

proposed rule also 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

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.

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

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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

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

§ 328.5:

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

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FDIC

FDIC-Insured - Backed by the

full

faith

and

credit

the

U.S.

Government

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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.

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

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.

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.

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‘‘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 FDIC would not view postage stamps sold

at ATMs to require these disclosures.

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 § 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’’

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.’’

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.

In this

instance, the ATM or like device would

be required to clearly, continuously, and

conspicuously display electronic

disclosures indicating that non-deposit

products are not insured by the FDIC,

are not deposits, and may lose value.

The proposed rule would have required

the display of these disclosures on each

transaction page or screen relating to

non-deposit products.

Discussion of Comments

Generally, commenters expressed

concern over the difficulty or cost in

implementing the proposed signage

requirements for ATMs. Some

commenters noted that costs will

disproportionately affect community

banks who rely on third-party vendors

that provide ATM operating software;

one commenter noted that software

changes take time, and these vendors

would be expected to prioritize large

banks. 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

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12 CFR 328.3(c).

12 CFR 328.3(a).

12 CFR 328.3(d)(10).

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 § 328.5 on ATM screens,

or (2) displaying the physical official

sign as described in § 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, § 328.4

applies to ‘‘IDIs’ automated teller

machines or like devices.’’ In

determining whether an ATM or like

device is an IDI’s, the FDIC will

consider circumstances such as the

ATM or like device’s location, branding,

whether it is operated by the IDI, and

other factors that reasonably indicate it

is an IDI’s ATM. Under the final rule,

for such in-scope ATMs and like

devices, the official digital sign and

non-deposit signage requirements under

§ 328.4 apply.

In response to the comment on

recommending more stringent

requirements, the FDIC does not

consider more stringent signage

requirements as necessary to achieve its

policy goals. For certain in-scope ATMs,

the signage requirements under the final

rule apply to each transaction page or

screen for deposits and, if applicable,

non-deposit products.

5. Official Advertising Statement for

IDIs

Proposed Rule

The FDIC proposed limited

amendments to the advertisement

statement requirements applicable to

IDIs. Specifically, the FDIC proposed to

expand IDIs’ options for use of a short

advertising statement to include the

term ‘‘FDIC-insured.’’

Currently, IDIs must include the

official advertising statement in all

advertisements that promote deposit

products.

The term advertisement

means a commercial message in any

medium that is designed to attract

public attention or patronage to a

product or business.

The FDIC views

this definition to include advertising

published through social media

channels.

The current regulation allows IDIs to

use the short title ‘‘Member of FDIC’’,

‘‘Member FDIC’’, or a reproduction of

the symbol of the corporation (defined

in § 328.2(b)). In addition to these

options, to provide additional

flexibility, the proposed rule would

allow the use of ‘‘FDIC-insured’’.

The FDIC also proposed to make a

technical correction to the reference to

the deposit insurance limit found in

paragraph (d)(10) of the current

regulation, which states that ‘‘deposits

or depositors are insured by the Federal

Deposit Insurance Corporation to at

least $100,000 for each depositor.’’

a technical correction, the proposed rule

would instead reference the standard

maximum deposit insurance amount

(currently $250,000), as established by

Congress.

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See 12 U.S.C. 1828(a)(4).

See §§ 328.100 through 328.109.

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.

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 § 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,

and

its implementing regulations in subpart

B to part 328,

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).

Use of the Official Advertising

Statement or FDIC-Associated Terms or

Images

Consumers have historically

identified the use of the official

advertising statement (such as ‘‘Member

FDIC’’), FDIC-Associated Terms, or

FDIC-Associated Images to signify that

they are dealing with an IDI and will

receive the protection of FDIC deposit

insurance. The official advertising

statement, FDIC-Associated Terms, and

FDIC-Associated Images have

increasingly been used by non-banks

that purport to deposit their customers’

funds at IDIs. As discussed in the NPR,

the FDIC believes that use of the official

advertisement, FDIC-Associated Terms,

or FDIC-Associated Images in such

instances presents a high risk of

confusing consumers as to whether they

are dealing with an IDI and whether

deposit insurance applies to their funds.

To address this risk, the proposed rule

would have amended § 328.102(a) and

§ 328.102(b) to clarify specific

circumstances under which use of the

official advertising statement, FDIC-

Associated Terms, or FDIC-Associated

Images by a non-bank would constitute

a misrepresentation of insured status as

it would inaccurately imply that the

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.

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

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For example, ‘‘ABC Co. is not an FDIC-insured

depository institution; banking services provided by

XYZ Bank, Member FDIC.’’

See §§ 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.

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.

The proposed rule did not prescribe

specific disclosure language; however, it

explained that a statement that a person

is not an FDIC-insured bank and deposit

insurance covers the failure of an

insured bank would be considered a

clear statement for purposes of this

provision. The proposed rule aimed to

give non-banks that wish to make

statements regarding deposit insurance

coverage some flexibility in how they

communicate the required information.

Failure To State That Non-Deposit

Products Are Not Insured by the FDIC

Is a Material Omission When a

Statement Is Made Regarding Deposit

Insurance

The FDIC’s experience suggests that

deposits and non-deposit products are

increasingly being offered to consumers

in ways that fail to distinguish which

products are insured by the FDIC. 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.

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.

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See 87 FR 33415, 33418 (June 2, 2022).

See final 12 CFR 328.102(b)(4)(iv).

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.

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.

Final Rule

As generally provided in the proposal,

with specific changes noted below, the

FDIC is amending subpart B to expressly

address additional examples that violate

part 328, making clear when specific

statements or omissions constitute a

misrepresentation under section

18(a)(4). Moreover, the FDIC reiterates

that the specific examples set forth in

the final rule are part of a non-

exhaustive list of conduct that violates

part 328. The FDIC has the authority to

take action against conduct that

constitutes a prohibited

misrepresentation about deposit

insurance, regardless of whether it is

among the non-exhaustive list of

examples included in the final rule.

The FDIC has been, and will continue

to be, consistently proactive in

enforcing its requirements and taking

appropriate action whenever it becomes

aware of prohibited conduct.

Use of the Official Advertising

Statement or FDIC-Associated Terms or

Images

The final rule adopts the proposed

amendments to § 328.102 to clarify

specific circumstances under which use

of the official advertising statement,

FDIC-Associated Terms, or FDIC-

Associated Images by a non-bank would

constitute a misrepresentation of

insured status. In a technical change

from the proposal, the final rule corrects

an amendment to § 328.102. Proposed

§ 328.102(b)(4)(i) stated, without

limitation, a false or misleading

representation is deemed to be material

if it states, suggests, or implies that, ‘‘A

person or Uninsured Financial Products

are insured or guaranteed by the FDIC’’.

The final rule corrects the reference to

‘‘A person’’ to ‘‘A person other than

Insured Depository Institution’’ and

moves this amendment to new

§ 328.102(b)(1)(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

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12 CFR 328.102(a).

See proposed 12 CFR 328.102(b)(5)(i).

See final 12 CFR 328.102(b)(5)(i) (emphasis

added).

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.

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.

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.

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.

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.

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See Federal Trade Commission, .com

Disclosures: How to Make Effective Disclosures in

Digital Advertising, available at: https://

www.ftc.gov/system/files/documents/plain-

language/bus41-dot-com-disclosures-information-

about-online-advertising.pdf.

See 88 FR 37920 (June 9, 2023).

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.

In response to the comment on

hyperlinking to other disclosures, the

FDIC generally believes that

hyperlinking to the required

disclosures—that a non-bank is not an

FDIC-insured depository institution, the

FDIC’s deposit insurance coverage only

protects against the failure of an FDIC-

insured depository institution, and pass-

through insurance coverage is subject to

conditions—would not satisfy the ‘‘clear

and conspicuous’’ standard in

§ 328.102(b)(5) under the final rule.

Failure to include these disclosures

with statements regarding deposit

insurance could result in consumer

confusion as to whether an entity is

FDIC-insured and the extent of deposit

insurance coverage.

7. 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.

The interagency guidance

underscores that a banking

organization’s use of third parties can

increase its risk, and that the use of

third parties does not diminish or

remove a banking organization’s

responsibility to perform all activities in

a safe and sound manner and in

compliance with applicable laws and

regulations, including those related to

consumer protection.

Here, the policies and procedures

established and maintained by IDIs will

facilitate compliance with part 328,

including by ensuring that appropriate

monitoring is conducted and

evaluations are performed regarding

activities of certain persons that provide

deposit-related services to IDIs or offer

an IDI’s deposit products or services to

other parties. The policies and

procedures will help ensure activities

are conducted in compliance with

applicable laws and that IDIs are aware

of whether certain third parties are in

violation of subpart B of part 328.

Having these policies and procedures in

place will help mitigate the risks of

consumer harm and confusion,

consistent with the statutory purpose

underlying section 18(a) of the FDI Act

and the FDIC’s mission to maintain and

promote public confidence in the

banking system.

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

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‘‘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.

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).

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.

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,

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.’’

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

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See 12 U.S.C. 1813(l).

See Fact Sheet, What the Public Needs to Know

About FDIC Deposit Insurance and Crypto

Companies (July 28, 2022), available at: https://

www.fdic.gov/news/fact-sheets/crypto-fact-sheet-7-

28-22.pdf. 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.

Call Reports as of June 30, 2023.

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.

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.’’

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.

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.

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.

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.

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.

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

at an

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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.

According to Call Reports as of June 30, 2023:

$23 million = 4,654 IDIs × 60 hours per IDI × $82.38

per hour.

According to Call Reports as of June 30, 2023:

$4 million = 4,496 IDIs × 10 hours per IDI × $82.38

per hour + 158 IDIs × 20 hours per IDI x $82.38 per

hour.

According to Call Reports as of June 30, 2023:

$31 million = 4,654 IDIs × 80 hours per IDI × $82.38

per hour.

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.

According to Call Reports as of June 30, 2023:

$7 million = 4,654 IDIs × 17 hours per IDI × $82.38

per hour.

See United States Census Bureau, 2020 SUSB

Annual Data Tables by Establishment Industry,

available at: https://www.census.gov/data/tables/

2020/econ/susb/2020-susb-annual.html, last

retrieved on October 23, 2023.

Assuming the same average hourly wage as

calculated for IDIs: 1,500 non-banks × 2.5 hours per

non-bank × $82.38 per hour = approximately $300

thousand. 1,500 non-banks × 1 hour per non-bank

× $82.38 per hour = approximately $125 thousand.

estimated annual cost of approximately

$10 million.

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.

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.

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.

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,

at an estimated annual

cost of approximately $7 million for the

industry.

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.

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.

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.

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.

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

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There have been at least 165 such instances

recently. See FDIC, 2019 Annual Report, at 38 and

FDIC, 2020 Annual Report, at 47.

See e.g., Hancock Whitney Bank Comment

Letter to 2021 RFI (May 24, 2021); Kasasa Comment

Letter to 2020 RFI (March 24, 2020) (stating that the

official sign should not be required on an IDI’s

website or mobile applications but suggesting the

FDIC require, at minimum, the FDIC advertising

statement on certain pages).

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).

5 U.S.C. 601 et seq.

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

Continued

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.

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.

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.

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.

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.

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.

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.

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.

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depository institution is ’’small’’ for the purposes of

RFA.

Call Reports as of June 30, 2023.

Id.

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).

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.

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.

Of these,

approximately 3,373 are considered

small entities for the purposes of RFA.

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.

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.

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.

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 >$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, §§ 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, §§ 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

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According to Call Reports as of June 30, 2023.

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

>=$10B—Ongoing, §§ 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

§ 328.3(f), which the proposed rule

moves to § 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.

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.

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

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.

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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.

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.

Accordingly, the FDIC

estimates seven responses per year for

IC 1 and 279 responses per year for IC

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.

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See 5 U.S.C. 804(2).

See 5 U.S.C. 801(a)(1).

UMMARY OF

STIMATED

NNUAL

PRA B

URDEN

Information collection

(obligation to respond)

Type of burden

(frequency of response)

Number of

respondents

Average

number of

responses per

respondent

Average time

per response

(HH:MM)

Annual burden

(hours)

1. Signs within Institution Premises—Banks

<$10B, 12 CFR 328.3 (Mandatory).

Third-Party Disclosure

(Annual).

4,496 7 1:00 31,472

2. Signs within Institution Premises—Banks

>=$10B, 12 CFR 328.3 (Mandatory).

Third-Party Disclosure

(Annual).

158 279 2:00 88,164

3. Signage for ATMs and Digital Deposit-taking

Channels—Implementation, 12 CFR 328.4 and

.5 (Mandatory).

Third-Party Disclosure

(Annual).

1,551 1 60:00 93,060

4. Signage for ATMs and Digital Deposit-taking

Channels—Banks <$10B—Ongoing, 12 CFR

328.4 and .5 (Mandatory).

Third-Party Disclosure

(Annual).

2,997 1 10:00 29,970

5. Signage for ATMs and Digital Deposit-taking

Channels—Banks >=$10B—Ongoing, 12 CFR

328.4 and .5 (Mandatory).

Third-Party Disclosure

(Annual).

105 1 20:00 2,100

6. Policies and Procedures—Implementation, 12

CFR 328.8 (Mandatory).

Recordkeeping (Annual) 1,551 1 80:00 124,080

7. Policies and Procedures—Ongoing, 12 CFR

328.8 (Mandatory).

Recordkeeping (Annual) 3,103 1 12:00 37,236

8. Insured Depository Institution Relationships—

Implementation 12 CFR 328.102(b)(5) (Manda-

tory).

Third-Party Disclosure

(Annual).

500 1 2:30 1,250

9. Insured Depository Institution Relationships—

Ongoing 12 CFR 328.102(b)(5) (Mandatory).

Third-Party Disclosure

(Annual).

1,000 1 1:00 1,000

10. Request for Consent to Use Non-English

Language Advertising Statement—12 CFR

328.6(f) (Required to Obtain or Retain a Ben-

efit).

Reporting (On occa-

sion).

1 1 2:00 2

Total Annual Burden (Hours) ........................ ....................................... ........................ ........................ ........................ 408,334

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.

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.

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.

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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

■ 1. The authority citation for part 328

continues to read as follows:

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

1820(c), 1828(a).

■ 2. Revise the part heading to read as

set forth above.

■ 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.

§ 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.

§ 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.

§ 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:

(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.’’

depository institution may procure the

official sign from the Corporation for

official use at no charge. Information on

obtaining the official sign is posted on

the FDIC’s internet website, https://

www.fdic.gov. Alternatively, insured

depository institutions may, at their

expense, procure from commercial

suppliers, signs that vary from the

official sign in size, color, or material.

Any insured depository institution

which has promptly submitted a written

request for an official sign to the

Corporation shall not be deemed to have

violated this subpart by failing to

display the official sign, unless the

insured depository institution fails to

display the official sign after receipt

thereof.

(d) Required changes in signage. The

Corporation may require any insured

depository institution, upon at least

thirty (30) days’ written notice, to

change the wording or color of the

official sign in a manner deemed

necessary for the protection of

depositors or others.

§ 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

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

consumers have access to or transact

with deposits, including all of its

branches (except branches excluded

from the scope of this subpart under

§ 328.0) and other premises in 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 § 328.2(a);

(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.

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.

§ 328.4 Signs for automated teller

machines and like devices.

(a) Scope. This section governs

signage for insured depository

institutions’ automated teller machines

or other remote electronic facilities that

receive deposits.

(b) ATMs or like devices that do not

offer access to non-deposit products.

Except as provided in paragraph (e), an

insured depository institution’s

automated teller machine or like device

that receives deposits for an insured

depository institution and does not offer

access to non-deposit products may

comply with the official sign

requirement of this section by either:

(1) Displaying the physical official

sign as described in § 328.2 on the

automated teller machine, subject to

paragraph (f); or

(2) Displaying the FDIC official digital

sign as described in paragraph (c) of this

section.

sign. An insured depository institution’s

automated teller machine or like device

that receives deposits for an insured

depository institution and offers access

to non-deposit products must clearly,

continuously, and conspicuously

display the FDIC official digital sign as

described in § 328.5 on its home page or

screen and on each transaction page or

screen relating to deposits.

(d) Non-deposit signage. An insured

depository institution’s automated teller

machine or like device that receives

deposits for an insured depository

institution and offers access to non-

deposit products must clearly,

continuously, and conspicuously

display electronic disclosures indicating

that such non-deposit products: are not

insured by the FDIC; are not deposits;

and may lose value. These disclosures

must be displayed on each transaction

page or screen relating to non-deposit

products. Such signage may not be

displayed in close proximity to the FDIC

official digital sign.

(e) Automated teller machines and

like devices placed into service after

January 1, 2025. An insured depository

institution’s automated teller machine

or like device that receives deposits for

an insured depository institution and

does not offer access to non-deposit

products, that is placed into service

after January 1, 2025 must display the

official digital sign as described in

paragraph (c) of this section.

(f) Degraded or defaced physical

official signs. A physical official sign

that is displayed on an insured

depository institution’s automated teller

machine or like device under paragraph

(b)(1) that is degraded or defaced would

not be displayed ‘‘clearly, continuously,

and conspicuously’’ for purposes of

paragraph (b)(1) of this section.

§ 328.5 Signs for digital deposit-taking

channels.

(a) Scope. This section governs

signage for digital deposit-taking

channels, including insured depository

institutions’ websites and web-based or

mobile applications that offer the ability

to make deposits electronically and

provide access to deposits at insured

depository institutions.

(b) Design. In general, the ‘‘FDIC’’ in

the FDIC official digital sign shall be

displayed with a wordmark size of 37.36

× 15.74px, in navy blue (hexadecimal

color code #003256), and the ‘‘FDIC-

Insured—Backed by the full faith and

credit of the U.S. Government’’ shall be

displayed in regular 400 italic (12.8px)

and with black (hexadecimal color code

#000000) lettering. The entire FDIC

official digital sign shall be displayed in

Source Sans Pro Web. If the FDIC

official digital sign in these colors

would be illegible in a digital-taking

channel, due to the color of the

background, the entire FDIC official

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

digital sign shall be displayed in white

(hexadecimal color code #FFFFFF). The

official digital sign required by the

provisions of this section shall have the

following design:

symbol’’ of the Corporation, as used in

this subpart, shall be that portion of the

FDIC official digital sign consisting of

‘‘FDIC’’ and the one line of smaller type

to the right of ‘‘FDIC’’.

(d) Display of FDIC official digital

sign. An insured depository institution

must clearly, continuously and

conspicuously display the FDIC official

digital sign specified in paragraph (b) of

this section on its digital deposit-taking

channels on the following pages or

screens:

(1) Initial or homepage of the website

or application;

(2) Landing or login pages; and

(3) Pages where the customer may

transact with deposits.

(e) Legibility. The FDIC official digital

sign shall be clearly legible across all

insured depository institution deposit-

taking channels.

(f) Clear and conspicuous placement

of FDIC official digital sign. An official

digital sign continuously displayed near

the top of the relevant page or screen

and in close proximity to the insured

depository institution’s name would be

considered clear and conspicuous.

(g) Display of non-deposit signage. (1)

Continuous Display of Non-deposit

signage. If a digital deposit-taking

channel offers both access to deposits at

an insured depository institution and

non-deposit products, the insured

depository institution must clearly and

conspicuously display signage

indicating that the non-deposit

products: are not insured by the FDIC;

are not deposits; and may lose value.

This signage must be displayed

continuously on each page relating to

non-deposit products. This non-deposit

signage may not be displayed in close

proximity to the digital sign required by

paragraph (d) of this section.

(2) One-Time Notification for Bank

Customers Related to Third-Party Non-

deposit Products. If a digital deposit-

taking channel offers access to non-

deposit products from a non-bank third

party’s online platform, and a logged-in

bank customer attempts to access such

non-deposit products, the insured

depository institution must provide a

one-time per web session notification on

the insured depository institution’s

deposit-taking channel before the

customer leaves the insured depository

institution’s digital deposit-taking

channel. The notification must be

dismissed by an action of the bank

customer before initially accessing the

third party’s online platform and it must

clearly, conspicuously indicate that the

third party’s non-deposit products: are

not insured by the FDIC; are not

deposits; and may lose value. Nothing

in this paragraph shall be read to limit

an insured depository institution’s

ability to include additional disclosures

in the notification that may help prevent

consumer confusion, including, for

example, that the bank customer is

leaving the insured depository

institution’s website.

(h) Required changes in digital

signage. The Corporation may require

any insured depository institution, upon

at least thirty (30) days’ written notice,

to change the wording, color or

placement of the FDIC official digital

sign and other signs for digital deposit-

taking channels when it is deemed

necessary for the protection of

depositors or others or to ensure

consistency with this part’s

requirement.

§ 328.6 Official advertising statement

requirements.

(a) Advertisement defined. The term

‘‘advertisement,’’ as used in this

subpart, shall mean a commercial

message, in any medium, that is

designed to attract public attention or

patronage to a product or business.

(b) Official advertising statement. The

official advertising statement shall be in

substance as follows: ‘‘Member of the

Federal Deposit Insurance Corporation.’’

(1) Optional short title and symbol.

The short title ‘‘Member of FDIC’’,

‘‘Member FDIC’’, ‘‘FDIC-Insured’’, or a

reproduction of the symbol of the

Corporation (as described in § 328.2(b)),

may be used by insured depository

institutions at their option as the official

advertising statement.

(2) Size and print. The official

advertising statement shall be of such

size and print to be clearly legible. If the

symbol of the Corporation is used as the

official advertising statement, and the

symbol must be reduced to such

proportions that the two lines of smaller

type above and below ‘‘FDIC’’ are

indistinct and illegible, those lines of

smaller type may be blocked out or

dropped.

statement in advertisements—(1)

General requirement. Except as

provided in paragraph (d) of this

section, each insured depository

institution shall include the official

advertising statement prescribed in

paragraph (b) of this section in all

advertisements that either promote

deposit products and services or

promote non-specific banking products

and services offered by the institution.

For purposes of this section, an

advertisement promotes non-specific

banking products and services if it

includes the name of the insured

depository institution but does not list

or describe particular products or

services offered by the institution. An

example of such an advertisement

would be, ‘‘Anytown Bank, offering a

full range of banking services.’’

(2) Foreign depository institutions.

When a foreign depository institution

has both insured and noninsured U.S.

branches, the depository institution

must also identify which branches are

insured and which branches are not

insured in all of its advertisements

requiring use of the official advertising

statement.

(3) Newly insured institutions. A

depository institution shall include the

official advertising statement in its

advertisements no later than its twenty-

first day of operation as an insured

depository institution.

(d) Types of advertisements which do

not require the official advertising

statement. The following types of

advertisements do not require use of the

official advertising statement:

(1) Statements of condition and

reports of condition of an insured

depository institution which are

required to be published by State or

Federal law;

(2) Insured depository institution

supplies such as stationery (except

when used for circular letters),

envelopes, deposit slips, checks, drafts,

signature cards, deposit passbooks,

certificates of deposit, etc.;

(3) Signs or plates in the insured

depository institution offices or attached

to the building or buildings in which

such offices are located;

(4) Listings in directories;

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FDIC-Insured

Backed

the

full

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and

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

(5) Advertisements not setting forth

the name of the insured depository

institution;

(6) Entries in a depository institution

directory, provided the name of the

insured depository institution is listed

on any page in the directory with a

symbol or other descriptive matter

indicating it is a member of the Federal

Deposit Insurance Corporation;

(7) Joint or group advertisements of

depository institution services where

the names of insured depository

institutions and noninsured institutions

are listed and form a part of such

advertisements;

(8) Advertisements by radio or

television, other than display

advertisements, which do not exceed

thirty (30) seconds in time;

(9) Advertisements which are of the

type or character that make it

impractical to include the official

advertising statement, including, but not

limited to, promotional items such as

calendars, matchbooks, pens, pencils,

and key chains; and

(10) Advertisements which contain a

statement to the effect that the

depository institution is a member of

the Federal Deposit Insurance

Corporation, or that the depository

institution is insured by the Federal

Deposit Insurance Corporation, or that

its deposits or depositors are insured by

the Federal Deposit Insurance

Corporation to at least the standard

maximum deposit insurance amount (as

defined in § 330.1(o)) for each depositor.

(e) Restrictions on using the official

advertising statement when advertising

non-deposit products—(1) Non-deposit

product advertisements. Except as

provided in paragraph (e)(3) of this

section, an insured depository

institution shall not include the official

advertising statement, or any other

statement or symbol which implies or

suggests the existence of Federal deposit

insurance, in any advertisement relating

solely to non-deposit products.

(2) Hybrid product advertisements.

Except as provided in paragraph (e)(3)

of this section, an insured depository

institution shall not include the official

advertising statement, or any other

statement or symbol which implies or

suggests the existence of Federal deposit

insurance, in any advertisement relating

solely to hybrid products.

(3) Mixed advertisements. In

advertisements containing information

about both insured deposit products and

non-deposit products or hybrid

products, an insured depository

institution shall clearly segregate the

official advertising statement or any

similar statement from that portion of

the advertisement that relates to the

non-deposit products.

(f) Official advertising statement in

non-English language. The non-English

equivalent of the official advertising

statement may be used in any

advertisement, provided that the

translation has had the prior written

approval of the Corporation.

§ 328.7 Prohibition against receiving

deposits at same teller station or window as

noninsured institution.

(a) Prohibition. An insured depository

institution may not receive deposits at

any teller station or window where any

noninsured institution receives deposits

or similar liabilities.

(b) Exception. This section does not

apply to deposits received at an

automated teller machine or other

remote electronic facility that receives

deposits for an insured depository

institution, or to deposits facilitated

through a digital deposit-taking channel.

§ 328.8 Policies and procedures.

(a) Policies and Procedures. An

insured depository institution must

establish and maintain written policies

and procedures to achieve compliance

with this part. Such policies and

procedures must be commensurate with

the nature, size, complexity, scope, and

potential risk of the deposit-taking

activities of the insured depository

institution and must include, as

appropriate, provisions related to

monitoring and evaluating activities of

persons that provide deposit-related

services to the insured depository

institution or offer the insured

depository institution’s deposit-related

products or services to other parties.

(b) Reservation of authority. Nothing

in this section shall be construed to

limit the FDIC’s authority to address

violations of this part, the FDIC’s

authority to interpret the rules in this

part, or any other authority the FDIC has

pursuant to any other laws or

regulations.

■ 3. Amend § 328.101 by adding the

definition for ‘‘Deposit’’ in alphabetical

order, and revising the definitions for

‘‘FDIC-Associated Images’’, ‘‘Hybrid

Product’’, ‘‘Non-Deposit Product’’, and

‘‘Uninsured Financial Product’’ to read

as follows:

§ 328.101 Definitions.

* * * * *

Deposit has the same meaning as set

forth under section 3(l) of the Federal

Deposit Insurance Act, 12 U.S.C.

1813(l).

* * * * *

FDIC-Associated Images means the

Seal of the FDIC, alone or within the

letter C of the term FDIC; the Official

Sign and Symbol of the FDIC, as set

forth in § 328.2; the FDIC Official Digital

Sign and Digital Symbol set forth in

§ 328.5; the Official Advertising

Statement, as set forth in § 328.6; any

similar images; and any other signs and

symbols that may represent or imply

that any deposit, liability, obligation

certificate, or share is insured or

guaranteed in whole or in part by the

FDIC.

* * * * *

Hybrid Product has the same meaning

as set forth under § 328.1.

* * * * *

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 box services

are not Non-Deposit Products.

* * * * *

Uninsured Financial Product means

any Non-Deposit Product, Hybrid-

Product, investment, security,

obligation, certificate, share, crypto-

asset or financial product other than an

‘‘Insured Deposit’’ as defined in this

section.

■ 4. Amend § 328.102 by adding

paragraph (a)(3)(viii) and (b)(1)(iv) and

revising paragraphs (b)(3)(ii), (b)(5), and

(b)(6)(ii) to read as follows:

§ 328.102 Prohibition.

(a) * * *

(3) * * *

(viii) Use of FDIC-Associated Terms

or FDIC-Associated Images, in a manner

that inaccurately states or implies that a

person other than an insured depository

institution is insured by the FDIC.

(b) * * *

(1) * * *

(iv) A person other than an insured

depository institution is an FDIC-

insured depository institution. This

includes use of FDIC-Associated Terms

or FDIC-Associated Images, in a manner

that inaccurately states or implies that a

person other than an insured depository

institution is insured by the FDIC.

(3) * * *

(ii) The statement omits or fails to

clearly and conspicuously disclose

material information that would be

necessary to prevent a reasonable

consumer from being misled, regardless

of whether any such consumer was

actually misled.

(5) Without limitation, a statement

regarding deposit insurance will be

deemed to omit or fail to clearly and

conspicuously disclose material

information if the absence of such

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information could lead a reasonable

consumer to believe any of the material

misrepresentations set forth in

paragraph (b)(4) of this section or could

otherwise result in a reasonable

consumer being unable to understand

the extent or manner of deposit

insurance provided. Examples of such

material information include, but are

not limited to, the following:

(i) A statement made by a person

other than an insured depository

institution that represents or implies

that an advertised product is insured by

the FDIC that fails to clearly and

conspicuously identify the insured

depository institution(s) with which the

representing party has a direct or

indirect business relationship for the

placement of deposits and into which

the consumer’s deposits may be placed;

(ii) A statement made by a person that

is not an insured depository institution

regarding deposit insurance that fails to

clearly and conspicuously disclose that

the person is not an FDIC-insured

depository institution and that FDIC

insurance only covers the failure of the

FDIC-insured depository institution. A

statement that a person is not an FDIC-

insured bank and deposit insurance

covers the failure of an insured bank

would be considered a clear statement

for purposes of this provision.

(iii) A statement made by a person

regarding deposit insurance in a context

where deposits and Non-Deposit

products are both offered on a website

in close proximity, that fails to clearly

and conspicuously differentiate between

insured deposits and Non-Deposit

Products by disclosing that Non-Deposit

Products: are not insured by the FDIC;

are not deposits; and may lose value,

except that:

(A) Services unrelated to financial

products or investments and physical

goods shall not be considered Non-

Deposit Products for purposes of clause

(b)(5)(iii) of this section; and

(B) In the case of a Non-Deposit

Product that is a product that allows

consumers to store, send, or receive fiat

money and does not fluctuate in value,

failure to disclose that the Non-Deposit

Product may lose value will not be a

material omission for purposes of clause

(b)(5)(iii) of this section.

(iv) A statement made by a person

regarding pass-through deposit

insurance coverage that fails to clearly

and conspicuously disclose that certain

conditions must be satisfied for pass-

through deposit insurance coverage to

apply.

(6) * * *

(ii) Has been advised by the FDIC in

an advisory letter, as provided in

§ 328.106(a), or has been advised by

another governmental or regulatory

authority, including, but not limited to,

another Federal banking agency, the

Federal Trade Commission, the Bureau

of Consumer Financial Protection, the

U.S. Department of Justice, or a state

bank supervisor, that such

representations are false or misleading;

and

* * * * *

Federal Deposit Insurance Corporation.

By order of the Board of Directors.

Dated at Washington, DC, on December 20,

2023.

James P. Sheesley,

Assistant Executive Secretary.

[FR Doc. 2023–28629 Filed 1–17–24; 8:45 am]

BILLING CODE 6714–01–P

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