Accuracy of Advertising and Notice of Insured Status, 46173-46174 [2017-21316]

Agencies

• National Credit Union Administration

[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Proposed Rules]
[Pages 46173-46174]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21316]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

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

========================================================================


Federal Register / Vol. 82, No. 191 / Wednesday, October 4, 2017 / 
Proposed Rules

[[Page 46173]]



NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 740

RIN 3133-AE78


Accuracy of Advertising and Notice of Insured Status

AGENCY: National Credit Union Administration (NCUA).

ACTION: Proposed rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The NCUA Board (Board) proposes to revise certain provisions 
of NCUA's advertising rule to provide regulatory relief to federally 
insured credit unions (FICUs). The advertising rule requires FICUs to 
use NCUA's ``official advertisement statement'' when advertising. In 
addition to being permitted to use any of the three current versions of 
the official advertising statement, the Board proposes to allow FICUs 
the option of using a fourth version, namely by stating ``Insured by 
NCUA.'' To provide additional regulatory relief, the Board proposes to 
expand a current exemption from the advertising statement requirement 
regarding radio and television advertisements, and eliminate the 
requirement to include the official advertising statement on statements 
of condition required to be published by law.

DATES: Comments must be received on or before December 4, 2017.

ADDRESSES: You may submit comments by any of the following methods 
(Please send comments by one method only):
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     NCUA Web site: https://www.ncua.gov/RegulationsOpinionsLaws/proposed_regs/proposed_regs.html. Follow the 
instructions for submitting comments.
     Email: Address to regcomments@ncua.gov. Include ``[Your 
name] Comments on Notice of Proposed Rulemaking Regarding Accuracy of 
Advertising'' in the email subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for email.
     Mail: Address to Gerard S. Poliquin, Secretary of the 
Board, National Credit Union Administration, 1775 Duke Street, 
Alexandria, Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.
    Public inspection: You may view all public comments on NCUA's Web 
site at https://www.ncua.gov/Legal/Regs/Pages/PropRegs.aspx as 
submitted, except for those we cannot post for technical reasons. NCUA 
will not edit or remove any identifying or contact information from the 
public comments submitted. You may inspect paper copies of comments in 
NCUA's law library at 1775 Duke Street, Alexandria, Virginia 22314, by 
appointment weekdays between 9 a.m. and 3 p.m. To make an appointment, 
call (703) 518-6546 or send an email to OGCMail@ncua.gov.

FOR FURTHER INFORMATION CONTACT: Marvin Shaw, Staff Attorney, Office of 
General Counsel, at the above address or telephone (703) 518-6553.

SUPPLEMENTARY INFORMATION:

I. Background

    The Federal Credit Union Act (Act) requires each FICU to display 
NCUA's ``official sign'' regarding National Credit Union Share 
Insurance Fund insurance of the FICU's share accounts. The sign 
includes language that the coverage is backed by the full faith and 
credit of the United States Government.\1\ Regulations implementing 
this statutory requirement are at 12 CFR part 740. Part 740 of NCUA's 
regulations also includes requirements relating to NCUA's official 
advertising statement as discussed in more detail below.
---------------------------------------------------------------------------

    \1\ 12 U.S.C. 1785.
---------------------------------------------------------------------------

A. Part 740 Requirements

    Part 740 applies to all FICUs. It prescribes requirements for both 
the NCUA's official sign that FICUs must display and the NCUA's 
official advertisement statement that FICUs must make when advertising. 
In relevant part, part 740 prohibits any FICU from using advertising 
\2\ or making any representation which is inaccurate or deceptive or 
which misrepresents its services, contracts, financial condition, or 
the Truth in Savings requirements.
---------------------------------------------------------------------------

    \2\ This includes print, electronic and broadcast media, 
displays, signs, and stationary and other promotional material.
---------------------------------------------------------------------------

    NCUA's official advertising statement is ``This credit union is 
federally insured by the National Credit Union Administration'' or the 
shorter version ``Federally insured by the NCUA.'' As a third option, 
the official sign may be displayed in advertisements in lieu of the 
advertising statement.
    Section 740.5(c) of NCUA's regulations enumerates several kinds of 
advertisements that, for practical reasons, are exempted from the 
general rule requiring the use of the official advertising statement. 
With respect to these exempted advertisements, the Board is focusing on 
the exemptions relating to radio advertisements that are less than 15 
seconds in duration \3\ and television advertisements that are less 
than 15 seconds in duration.\4\
---------------------------------------------------------------------------

    \3\ 12 CFR 740.5(c)(7).
    \4\ 12 CFR 740.5(c)(8).
---------------------------------------------------------------------------

B. Regulatory History

    For many years, NCUA's advertising and official sign regulations 
were essentially the same as those of the Federal Deposit Insurance 
Corporation (FDIC).\5\ In 2011, however, the Board amended part 740 by 
making NCUA's advertising rules more stringent than FDIC's rules. 
Specifically, in 2011, while banks needed only to include the FDIC 
advertising statement in radio and television ads that exceeded 30 
seconds, the 2011 NCUA rule change required FICUs to include NCUA's 
official advertising statement in radio and television ads that 
exceeded 15 seconds.\6\ This additional requirement, which the Board 
now believes is unnecessary, affected more FICU ads and disrupted the 
balance between bank and FICU regulatory burden in this context. 
According to some FICUs, it also made it more difficult for FICUs to 
produce effective ads.
---------------------------------------------------------------------------

    \5\ 12 CFR 328.
    \6\ 76 FR 30521 (May 26, 2011).
---------------------------------------------------------------------------

    The 2011 NCUA rule change also required FICUs to include the 
advertising statement on statements of condition required to be 
published by law, whereas banks are exempt from this. The Board also 
proposes to relieve FICUs from this additional burden, which the Board 
believes is unnecessary.

[[Page 46174]]

    Additionally, as a result of information we have received from the 
public, the Board proposes to amend part 740 to permit a fourth 
iteration of the official advertising statement, namely by stating 
``Insured by NCUA.'' This change would provide FICUs with more 
flexibility without diminishing the purpose of the rule.
    The current part 740 addresses conventional forms of advertising 
such as print, radio, and television. The Board requests comment about 
whether the regulation should be modified to facilitate the trend in 
advertising via new types of social media, mobile banking, text 
messaging and other digital communication platforms, including Twitter 
and Instagram. The comments should focus on specific recommendations 
that balance the regulation's goal to inform the public with space and 
other constraints inherent in new forms of advertising.

II. Regulatory Procedures

Regulatory Flexibility Act

    The Regulatory Flexibility Act requires NCUA to prepare an analysis 
to describe any significant economic impact a regulation may have on a 
substantial number of small entities.\7\ For purposes of this analysis, 
NCUA considers small credit unions to be those having under $100 
million in assets. The proposed amendments provide regulatory relief 
and thus do not impose a significant burden on small credit unions. 
Accordingly, NCUA has determined and certifies that the proposed rule, 
if adopted, will not have a significant economic impact on a 
substantial number of small credit unions within the meaning of the 
Regulatory Flexibility Act, 5 U.S.C. 601-612.
---------------------------------------------------------------------------

    \7\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 (``PRA'') applies to 
rulemakings in which an agency by rule creates a new paperwork burden 
on regulated entities or modifies an existing burden.\8\ For purposes 
of the PRA, a paperwork burden may take the form of either a reporting 
or a recordkeeping requirement, both referred to as information 
collections. The proposed rule does not constitute a ``collection of 
information'' within the meaning of section 3502(3) and would not 
increase paperwork requirements under the PRA or regulations of the 
Office of Management and Budget.
---------------------------------------------------------------------------

    \8\ 44 U.S.C. 3507(d); 5 CFR part 1320.
---------------------------------------------------------------------------

Executive Order 13132

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on state and local interests. In 
adherence to fundamental federalism principles, NCUA, an independent 
regulatory agency as defined in 44 U.S.C. 3502(5), voluntarily complies 
with the executive order. The proposed rule would not have substantial 
direct effect on the states, on the connection between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. NCUA has 
determined that this proposed rule does not constitute a policy that 
has federalism implications for purposes of the executive order.

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

    NCUA has determined that this proposed rule will not affect family 
well-being within the meaning of Section 654 of the Treasury and 
General Government Appropriations Act, 1999.\9\
---------------------------------------------------------------------------

    \9\ Public Law 105-277, 112 Stat. 2681 (1998).
---------------------------------------------------------------------------

List of Subjects in 12 CFR Part 740

    Advertisements, Credit unions, Share insurance, Signs and symbols.

    By the National Credit Union Administration Board on September 
28, 2017.
Gerard S. Poliquin,
Secretary of the Board.

    For the reasons discussed above, the NCUA Board proposes to amend 
12 CFR part 740 as follows:

PART 740--ACCURACY OF ADVERTISING AND NOTICE OF INSURED STATUS

0
1. The authority for part 740 continues to read as follows:

    Authority:  12 U.S.C. 1766, 1781, 1785, and 1789.

0
2. Amend Sec.  740.5 by revising paragraphs (a), (b), (c)(7) and (c)(8) 
to read as follows:


Sec.  740.5  Requirements for the official advertising statement.

    (a) Each insured credit union must include the official advertising 
statement, prescribed in paragraph (b) of this section, in all of its 
advertisements, including on its main Internet page, except as provided 
in paragraph (c) of this section.
    (b) The official advertising statement is in substance one of the 
following:
    (1) This credit union is federally insured by the National Credit 
Union Administration;
    (2) Federally insured by NCUA;
    (3) Insured by NCUA; or
    (4) A reproduction of the official sign as described in Sec.  
740.4(b) may be used in lieu of the other statements included in this 
section. If the official sign is used as the official advertising 
statement, an insured credit union may alter the font size to ensure 
its legibility as provided in Sec.  740.4(b)(2).
    (5) The official advertising statement must be in a size and print 
that is clearly legible and may be no smaller than the smallest font 
size used in other portions of the advertisement intended to convey 
information to the consumer.
    (c) * * *
    (7) Advertisements by radio that are less than thirty (30) seconds 
in time;
    (8) Advertisements by television, other than display 
advertisements, that are less than thirty (30) seconds in time;
* * * * *
[FR Doc. 2017-21316 Filed 10-3-17; 8:45 am]
 BILLING CODE 7535-01-P