(FFIEC July 15, 1998)
FEDERAL FINANCIAL INSTITUTIONS
EXAMINATION COUNCIL GUIDANCE
ON ELECTRONIC FINANCIAL SERVICES AND CONSUMER COMPLIANCE
INTRODUCTION
Federally insured depository institutions are developing or employing
new electronic technologies for delivering financial products to improve
customer service and enhance competitive positions. Some of those
institutions have asked regulators questions regarding the application of
existing consumer protection laws and regulations to electronic product
delivery methods. It is clear from these questions that these institutions
are uncertain about the appropriate manner to address electronic services
under the existing regulatory framework. Accordingly, the Board of
Governors of the Federal Reserve System, the Federal Deposit Insurance
Corporation, the National Credit Union Administration, the Office of the
Comptroller of the Currency, and the Office of Thrift Supervision
(collectively, the “Agencies”) are providing federally insured
depository institutions with some basic information and suggested guidance
pertaining to federal consumer protection laws and regulations and their
application to electronic financial service operations.
This issuance is intended to assess the implications of some of the
emerging electronic technologies for the consumer regulatory environment,
to provide institutions with an overview of pertinent regulatory issues,
and to offer suggestions on how to apply existing consumer laws and
regulations to new electronic financial services.
The term “electronic financial service” as used in this guidance
includes, but is not limited to, on-line financial services, electronic
fund transfers, and other electronic payment systems. On-line financial
services, stored value card systems, and electronic cash are among the new
electronic products being introduced in the market. Financial institutions
are establishing Internet web sites that advertise products and services,
accept electronic mail, and provide consumers with the capability to
conduct transactions through an on-line system. Services and products can
be accessed through personal computers connecting to the institution via
proprietary software, commercial on-line services, and the Internet, or
through other access devices including, for example, video kiosks and
interactive television. Financial institutions should be advised that many
of the general principles, requirements, and controls that apply to paper
transactions may also apply to electronic financial services.
This guidance letter contains two sections: 1) The Compliance
Regulatory Environment, and 2) The Role of Consumer Compliance in
Developing and Implementing Electronic Services. Examples relating to
compliance issues are used for illustrative purposes; institutions are
encouraged to use the concepts underlying these examples when implementing
an electronic services technology plan. It should be understood that
existing consumer laws and regulations generally apply to applicable
transactions, advertisements and other services conducted electronically.
It should also be understood, however, that not all of the consumer
protection issues that have arisen in connection with new technologies are
specifically addressed in this guidance. Additional communiqués may be
issued in the future to address other aspects of consumer laws and
regulations as the financial service environment evolves.
COMPLIANCE REGULATORY ENVIRONMENT
This section summarizes and highlights the most recent changes in the
relevant sections of federal consumer protection laws and regulations that
address electronic financial services, and notes other relevant provisions
of law. This information is not intended to be a complete checklist for
consumer compliance in the electronic medium. It does not address a number
of open issues surrounding the application of consumer rules to new
electronic financial services that are currently being considered by the
appropriate agencies. It is critical that institutions providing
electronic delivery mechanisms develop and maintain an in-depth knowledge
of the relevant statutes and regulations. Moreover, it should be kept in
mind that additional changes to relevant laws and regulations arising in
response to the new electronic service technologies may occur. The rapid
development of technology and new products will require updating of this
information.
Generally, the regulatory requirement that disclosures be in writing
and in a form the customer can keep has been met by providing paper
disclosures to the customer. For example, a bank would supplement
electronic disclosures with paper disclosures until the regulations have
been reviewed and changed, if necessary, to specifically allow electronic
delivery of disclosures. Some of the consumer regulations were reviewed
and changed to reflect electronic disclosures. These changes are
summarized in this section. Also, attached to this guidance is a matrix
entitled “Compliance Issues Involving Electronic Services” that
highlights some of the principal compliance issues that should be
considered by financial institutions when developing and implementing
electronic systems.
DEPOSIT SERVICES
Electronic Fund Transfer Act (Regulation E)
Generally, when on-line banking systems include electronic fund
transfers that debit or credit a consumer’s account, the requirements of
the Electronic Fund Transfer Act and Regulation E apply. A transaction
involving stored value products is covered by Regulation E when the
transaction accesses a consumer’s account (such as when value is “loaded”
onto the card from the consumer’s deposit account at an electronic
terminal or personal computer).
In accordance with §205.4, financial institutions must provide
disclosures that are clear and readily understandable, in writing, and in
a form the consumer may keep. An Interim rule was issued on March 20, 1998
that allows depository institutions to satisfy the requirement to deliver
by electronic communication any of these disclosures and other information
required by the act and regulations, as long as the consumer agrees to
such method of delivery.
According to the Federal Reserve Board Official Staff Commentary (OSC)
§205.7(a)-4, financial institutions must ensure that consumers who
sign-up for a new banking service are provided with disclosures for the
new service if the service is subject to terms and conditions different
from those described in the initial disclosures required under §205.7.
Although not specifically mentioned in the commentary, this applies to all
new banking services including electronic financial services.
The OSC also clarifies that terminal receipts are unnecessary for
transfers initiated on-line. Specifically, OSC §205.2(h)-1 provides that,
because the term “electronic terminal” excludes a telephone operated
by a consumer, financial institutions need not provide a terminal receipt
when a consumer initiates a transfer by a means analogous in function to a
telephone, such as by a personal computer or a facsimile machine.
Additionally, OSC §205.10(b)-5 clarifies that a written authorization
for preauthorized transfers from a consumer’s account includes an
electronic authorization that is not signed, but similarly authenticated
by the consumer, such as through the use of a security code. According to
the OSC, an example of a consumer’s authorization that is not in the
form of a signed writing but is, instead, “similarly authenticated” is
a consumer’s authorization via a home banking system. To satisfy the
regulatory requirements, the institution must have some means to identify
the consumer (such as a security code) and make a paper copy of the
authorization available (automatically or upon request). The text of the
electronic authorization must be displayed on a computer screen or other
visual display that enables the consumer to read the communication from
the institution. Only the consumer may authorize the transfer and not, for
example, a third-party merchant on behalf of the consumer.
Pursuant to §205.6, timing in reporting an unauthorized transaction,
loss, or theft of an access device determines a consumer’s liability. A
financial institution may receive correspondence through an electronic
medium concerning an unauthorized transaction, loss, or theft of an access
device. Therefore, the institution should ensure that controls are in
place to review these notifications and also to ensure that an
investigation is initiated as required.
Truth in Savings Act (Regulation DD)
Financial institutions that advertise deposit products and services
on-line must verify that proper advertising disclosures are made in
accordance with all provisions of §230.8. Institutions should note that
the disclosure exemption for electronic media under §230.8(e) does not
specifically address commercial messages made through an institution’s
web site or other on-line banking system. Accordingly, adherence to all of
the advertising disclosure requirements of §230.8 is required.
Advertisements should be monitored for recency, accuracy, and
compliance. Financial institutions should also refer to OSC
§230.2(b)-2(i) if the institution’s deposit rates appear on third party
web sites or as part of a rate sheet summary. These types of messages are
not considered advertisements unless the depository institution, or a
deposit broker offering accounts at the institution, pays a fee for or
otherwise controls the publication.
Pursuant to §230.3(a), disclosures generally are required to be in
writing and in a form that the consumer can keep. Until the regulation has
been reviewed and changed, if necessary, to allow electronic delivery of
disclosures, an institution that wishes to deliver disclosures
electronically to consumers, would supplement electronic disclosures with
paper disclosures.
Expedited Funds Availability Act (Regulation CC)
Generally, the rules pertaining to the duty of an institution to make
deposited funds available for withdrawal apply in the electronic financial
services environment. This includes rules on fund availability schedules,
disclosure of policy, and payment of interest. Recently, the FRB published
a commentary that clarifies requirements for providing certain written
notices or disclosures to customers via electronic means. Specifically,
the commentary to §229.13(g)-1a states that a financial institution
satisfies the written exception hold notice requirement, and the
commentary to §229.15(a)-1 states that a financial institution satisfies
the general disclosure requirement by sending an electronic version that
displays the text and is in a form that the customer may keep. However,
the customer must agree to such means of delivery of notices and
disclosures. Information is considered to be in a form that the customer
may keep if, for example, it can be downloaded or printed by the customer.
To reduce compliance risk, financial institutions should test their
programs’ ability to provide disclosures in a form that can be
downloaded or printed.
Reserve Requirements of Depository Institutions (Regulation D)
Pursuant to the withdrawal and transfer restrictions imposed on savings
deposits §204.2(d)(2) electronic transfers, electronic withdrawals (paid
electronically) or payments to third parties initiated by a depositor from
a personal computer are included as a type of transfer subject to the six
transaction limit imposed on passbook savings and MMDA accounts.
Institutions also should note that, to the extent stored value or other
electronic money represents a demand deposit or transaction account, the
provisions of Regulation D would apply to such obligations.
LOAN/LEASING SERVICES
Truth in Lending Act (Regulation Z)
The commentary to regulation Z was amended recently to clarify that
periodic statements for open-end credit accounts may be provided
electronically, for example, via remote access devices. OSC
§226.5(b)(2)(ii)-3 states that financial institutions may permit
customers to call for their periodic statements, but may not require them
to do so. If the customer wishes to pick up the statement and the plan has
a grace period for payment without imposition of finance charges, the
statement, including a statement provided by electronic means, must be
made available in accordance with the “14-day rule,” requiring mailing
or delivery of the statement not later than 14 days before the end of the
grace period.
Provisions pertaining to advertising of credit products should be
carefully applied to an on-line system to ensure compliance with the
regulation. Financial institutions advertising open-end or closed-end
credit products on-line have options. Financial institutions should ensure
that on-line advertising complies with §226.16 and §226.24. For on-line
advertisements that may be deemed to contain more than a single page,
financial institutions should comply with §226.16(c) and §226.24(d),
which describe the requirements for multiple-page advertisements.
Consumer Leasing Act (Regulation M)
OSC §213.2(b)-1 provides examples of advertisements that clarify the
definition of an advertisement under Regulation M. The term advertisement
includes messages inviting, offering, or otherwise generally announcing to
prospective customers the availability of consumer leases, whether in
visual, oral, print, or electronic media. Included in the examples are
on-line messages, such as those on the Internet. Therefore, such messages
are subject to the general advertising requirements under §213.7. Equal
Credit Opportunity Act (Regulation B)
OSC §202.5(e)-3 clarifies the rules concerning the taking of credit
applications by specifying that application information entered directly
into and retained by a computerized system qualifies as a written
application under this section. If an institution makes credit application
forms available through its on-line system, it must ensure that the forms
satisfy the requirements of §202.5.
OSC §202.13(b)-4 also clarifies the regulatory requirements that apply
when an institution takes loan applications through electronic media. If
an applicant applies through an electronic medium (for example, the
Internet or a facsimile) without video capability that allows employees of
the institution to see the applicant, the institution may treat the
application as if it were received by mail.
Fair Housing Act
A financial institution that advertises on-line credit products that
are subject to the Fair Housing Act must display the Equal Housing Lender
logotype and legend or other permissible disclosure of its
nondiscrimination policy if required by rules of the institution’s
regulator (OTS §528.4, FDIC §338.3, NCUA §701.31, FRB Fair Housing
Advertising and Poster Requirements, 54 Fed. Reg. 11,567 (1989)).
Home Mortgage Disclosure Act (Regulation C)
OSC §203.4(a)(7)-5 clarifies that applications accepted through
electronic media with a video component (the financial institution has the
ability to see the applicant) must be treated as “in person”
applications. Accordingly, information about these applicants’ race or
national origin and sex must be collected. An institution that accepts
applications through electronic media without a video component, for
example, the Internet or facsimile, may treat the applications as received
by mail.
Fair Credit Reporting Act
The Economic Growth and Regulatory Paperwork Reduction Act of 1996
(Public Law 104-208, §2408, 110 Stat. 3009 (1996)) amended Section 610 of
the Fair Credit Reporting Act (15 U.S.C. §1681h), to allow consumer
reporting agencies to make the disclosures to consumers required under
Section 609 by electronic means if authorized by the consumer. Consumers
must specify that they wish to receive the disclosures in an electronic
form, and such form of delivery must be available from the credit
reporting agency.
Any participant in an electronic service system who regularly gathers
or evaluates consumer credit information or other information about
consumers for the purpose of furnishing consumer reports to third parties
(for monetary fees, dues, or on a cooperative nonprofit basis) is
considered a consumer reporting agency. In such cases, the participant
must comply with the applicable provisions of the FCRA.
MISCELLANEOUS
Advertisement Of Membership (FDIC 12CFR §328) (NCUA RR 740)
The FDIC and NCUA consider every insured depository institution’s
on-line system top level page, or “home page”, to be an advertisement.
Therefore, according to these agencies’ interpretation of their rules,
financial institutions subject to §328.3 (NCUA RR §740.4) should display
the official advertising statement on their home pages unless subject to
one of the exceptions described under §328.3(c) (NCUA RR§740.4(c)).
Furthermore, each subsidiary page of an on-line system that contains an
advertisement should display the official advertising statement unless
subject to one of the exceptions described under §328.3(c) (NCUA RR
§740.4(c)). Additional information about the FDIC’s interpretation can
be found in the Federal Register, Volume 62, page 6145, dated February 11,
1997.
The official bank sign (FDIC §328.2), official savings association
sign (FDIC §328.4), and NCUA official sign (NCUA RR 740.3) are currently
not required to be displayed on an institution’s on-line system.
Fair Debt Collection Practices Act
According to Section 803(2) of the Fair Debt Collection Practices Act
(15 U.S.C. §1692a(2)), “communication” means conveying information
regarding a debt directly or indirectly to any person through any medium.
Financial institutions acting as debt collectors for third parties are
permitted to communicate via electronic means, such as the Internet, to
collect a debt or to obtain information about a consumer. In such
instances, financial institutions must ensure that their communications
and practices are in keeping with the requirements of the Act.
Flood Disaster Protection Act
The regulation implementing the National Flood Insurance Program
requires a financial institution to notify a prospective borrower and the
servicer that the structure securing the loan is located or to be located
in a special flood hazard area. The regulation also requires a notice of
the servicer’s identity be delivered to the insurance provider. While
the regulation addresses electronic delivery to the servicer and to the
insurance provider, it does not address electronic delivery of the notice
to the borrower.
COMPLIANCE POLICY GUIDANCE
The following discussion provides specific interim compliance policy
guidance regarding advertising, disclosures/notices, applications, stored
value cards, and record keeping. This guidance is intended to discuss the
regulations’ requirements as presently written in the context of the
electronic financial services environment and, to the extent possible, to
provide practical examples for application of this guidance. This guidance
may have to be reconsidered and revised at such time as applicable
regulations are amended or clarified. Institutions may however, find it
useful to apply the concepts underlying the examples in this guidance to
their own electronic financial service operations. The electronic
financial services environment is dynamic thus, the guidance outlined in
this letter could also evolve based on developments in technology and the
continuation of deliberations regarding appropriate policies.
Advertisements
Generally, Internet web sites are considered advertising by the
regulatory agencies. In some cases, the regulations contain special rules
for multiple-page advertisements. It is not yet clear what would
constitute a single “page” in the context of the Internet or on-line
text. Thus, institutions should carefully review their on-line
advertisements in an effort to minimize compliance risk.
In addition, Internet or other systems in which a credit application
can be made on-line may be considered “places of business” under HUD’s
rules prescribing lobby notices. Thus, institutions may want to consider
including the “lobby notice,” particularly in the case of interactive
systems that accept applications.
Disclosures/Notices
Several consumer regulations provide for disclosures and/or notices to
consumers. The compliance officer should check the specific regulations to
determine whether the disclosures/notices can be delivered via electronic
means. The delivery of disclosures via electronic means has raised many
issues with respect to the format of the disclosures, the manner of
delivery, and the ability to ensure receipt by the appropriate person(s).
The following highlights some of those issues and offers guidance and
examples that may be of use to institutions in developing their electronic
services.
Disclosures are generally required to be "clear and
conspicuous." Therefore, compliance officers should review the web
site to determine whether the disclosures have been designed to meet this
standard. Institutions may find that the format(s) previously used for
providing paper disclosures may need to be redesigned for an electronic
medium. Institutions may find it helpful to use "pointers 2 "
and "hotlinks 3 " that will automatically present the
disclosures to customers when selected. A financial institution’s use
solely of asterisks or other symbols as pointers or hotlinks would not be
as clear as descriptive references that specifically indicate the content
of the linked material.
Several regulations also require disclosures and notices to be given at
specified times during a financial transaction. For example, some
regulations require that disclosures be given at the time an application
form is provided to the consumer. In this situation, institutions will
want to ensure that disclosures are given to the consumer along with any
application form. Institutions may accomplish this through various means,
one of which may be through the automatic presentation of disclosures with
the application form.
Regulations that allow disclosures/notices to be delivered
electronically and require institutions to deliver disclosures in a form
the customer can keep have been the subject of questions regarding how
institutions can ensure that the consumer can “keep” the disclosure. A
consumer using certain electronic devices, such as Web TV, may not be able
to print or download the disclosure. If feasible, a financial institution
may wish to include in its on-line program the ability for consumers to
give the financial institution a non-electronic address to which the
disclosures can be mailed.
In those instances where an electronic form of communication is
permissible by regulation, to reduce compliance risk institutions should
ensure that the consumer has agreed to receive disclosures and notices
through electronic means. Additionally, institutions may want to provide
information to consumers about the ability to discontinue receiving
disclosures through electronic means, and to implement procedures to carry
out consumer requests to change the method of delivery.
Furthermore, financial institutions advertising or selling non-deposit
investment products through on-line systems, like the Internet, should
ensure that consumers are informed of the risks associated with nondeposit
investment products as discussed in the “Interagency Statement on Retail
Sales of Non Deposit Investment Products.” On-line systems should comply
with this Interagency Statement, minimizing the possibility of customer
confusion and preventing any inaccurate or misleading impression about the
nature of the nondeposit investment product or its lack of FDIC
insurance.
Electronic Stored Value Products
Electronic stored value products are retail payment products in which
value is recorded on a personal electronic device or on a magnetic strip
or computer chip in exchange for a predetermined balance of funds.
Electronic stored value products may include stored value cards, smart
cards, and electronic cash recorded on a personal electronic device, such
as a personal computer. Electronic stored value cards can be either
disposable or reloadable. Disposable cards are purchased with a specific
electronic value embedded on the card that can be used for transactions
until the electronic value is depleted. A reloadable card permits a user
to increase, as necessary, the value on the card at an electronic terminal
or device that accepts currency or that allows the user to transfer funds
from an account to the card.
The Federal Reserve Board of Governors, in its Report to the Congress
on the Application of the Electronic Fund Transfer Act to Electronic
Stored-Value Products, for purposes of the study, describes electronic
stored value products as retail payment products intended primarily for
consumer payments that generally have some or all of the following
characteristics:
- A card or other device that electronically stores or provides access
to a specified amount of funds selected by the holder of the device
and available for making payments to others.
- The device is the only means of routine access to the funds.
- The issuer does not record the funds associated with the device as
an account in the name of (or credited to) the holder.
The application of certain consumer protection laws and regulations to
these products has not been determined. However, financial institutions
that issue electronic stored value products may wish to provide
information to consumers about the operation of these products to enable
consumers to meaningfully distinguish among different payment products,
such as stored value cards, debit cards and credit cards. Additionally,
consumers likely would find it beneficial to receive information about the
terms and conditions associated with the use of electronic stored value
products, to ensure their informed use of these products. Some financial
institutions that issue stored value products have provided consumers with
a variety of disclosures including:
- federally insured or non-insured status of the product
- all fees and charges associated with the purchase, use or redemption
of the product, · any liability for lost or stolen electronic stored
value,
- any expiration dates, or limits on redemption of the electronic
stored value, and
- toll-free telephone number for customer service, malfunction and
error resolution.
FDIC General Counsel Opinion No. 8, dated July 16, 1996, states that
insured depository institutions are expected to disclose in a clear and
conspicuous manner to consumers the insured or non-insured status of the
stored value products they offer to the public, as appropriate. Some
financial institutions have also printed some of this information, such as
expiration date and telephone number, directly on the card.
Financial institutions should also consider establishing procedures to
resolve disputes arising from the use of the electronic stored value
products.
Record Retention
Record retention provisions apply to electronic delivery of disclosures
to the same extent required for non-electronic delivery of information.
For example, if the web site contains an advertisement, the same record
retention provisions that apply to paper-based or other types of
advertisements apply. Copies of such advertisements should be retained for
the time period set out in the relevant regulation. Retention of
electronic copies is acceptable.
THE ROLE OF CONSUMER COMPLIANCE IN DEVELOPING AND IMPLEMENTING
ELECTRONIC SERVICES
When violations of the consumer protection laws regarding a financial
institution’s electronic services have been cited, generally the
compliance officer has not been involved in the development and
implementation of the electronic services. Therefore, it is suggested that
management and system designers consult with the compliance officer during
the development and implementation stages in order to minimize compliance
risk. The compliance officer should ensure that the proper controls are
incorporated into the system so that all relevant compliance issues are
fully addressed. This level of involvement will help decrease an
institution’s compliance risk and may prevent the need to delay
deployment or redesign programs that do not meet regulatory
requirements.
The compliance officer should develop a compliance risk profile as a
component of the institution’s online banking business and/or technology
plan. This profile will establish a framework from which the compliance
officer and technology staff can discuss specific technical elements that
should be incorporated into the system to ensure that the online system
meets regulatory requirements. For example, the compliance officer may
communicate with the technology staff about whether compliance
disclosures/notices on a web site should be indicated or delivered by the
use of “pointers” or “hotlinks” to ensure that required
disclosures are presented to the consumer. The compliance officer can also
be an ongoing resource to test the system for regulatory compliance.
Compliance officers will need to review their existing compliance
policies and procedures and make appropriate modifications based upon the
types of products, services, and operating features of the institution’s
online system. The compliance program may not need to be revamped, but
merely extended to address the new level of technology employed by the
institution. Staff should be trained and a monitoring system implemented
to review continually the content and operation of the online programs to
prevent inadvertent or unauthorized changes that may affect compliance
with the regulations.
Management should review and revise the institution’s electronic
financial services as the regulatory environment changes and electronic
delivery mechanisms evolve. This will help to ensure that the institution
maintains an effective compliance program.
CONCLUSION
This guidance provides information for institutions to consider during
the design, development, implementation and monitoring of electronic
banking operations. Financial institutions are responsible for ensuring
that their electronic banking operations are in compliance with applicable
laws, regulations, and policies, including both federal and state
provisions.
Financial institutions need to adapt to a changing technological
environment so that compliance with consumer protections laws are
maintained, while allowing the financial institution industry to continue
to make effective use of new technology. Due to the continuing evolution
of the technological environment and the associated regulatory
environment, proposed changes to federal laws and regulations will
undoubtedly affect the content of this letter in the future. The
regulatory agencies are interested and willing to discuss these issues
with financial institutions during the design and development of their
electronic banking programs. Additionally, regulatory agency Internet
sites may also contain information helpful to financial institutions.
COMPLIANCE ISSUES INVOLVING ELECTRONIC SERVICES
ON-LINE SERVICES INCLUDE INTERNET, PERSONAL
COMPUTER,
INTERACTIVE TELEVISION, OR VIDEO KIOSKS, ETC.
Advertising and Information Only Systems
Includes advertising of loans, leases, deposit services -- Truth in
Lending Act, Equal Credit Opportunity Act, Consumer Leasing Act, Truth in
Savings Act and Fair Housing Act apply.
- Unfair or Deceptive Advertising -- Consider state laws that may
apply
- FDIC official advertising statement and Equal Housing Lending
logo
- Information displayed as a on-line "lobby board" or
scrolling message may constitute an advertisement
Lending and Leasing Services
Equal Credit Opportunity Act, Home Mortgage Disclosure Act, Consumer
Leasing Act, Truth in Lending Act, Unfair and Deceptive Practices Act,
Community Reinvestment Act, Fair Credit Reporting Act, and the Fair
Housing Act apply.
- Major areas for consideration: delivery of disclosures; notices;
periodic statements; error resolution procedures
- Determine appropriate manner of delivering "written"
notices and/or other information to and from the customers in an
on-line environment
- Ensure that disclosures are delivered in a timely manner and meet
the "clear and conspicuous" standard as required
- Ensure timely delivery of Adverse Action Notices in an appropriate
manner
- Ensure that on-line products are offered and evaluated on a
nondiscriminatory basis and that no illegal discouragement
exists
- Determine that monitoring information and/or data collection
requirements of Regulation B, C, and BB are handled
appropriately
- Ensure that applications taken on-line receive the information
required by the regulation
- Ensure that correspondence received from consumers via electronic
communication are responded to in accordance with the regulations
On-line Depository Services
Electronic Fund Transfer Act, Expedited Funds Availability Act, Truth
in Savings Act, and Regulation D (Reserve Requirements of Depository
Institutions) apply.
- Major areas for consideration: delivery of disclosures; notices;
periodic statements; error resolution procedures
- Ensure appropriate account authorization, including signature
issues
- Determine appropriate manner of delivering written notices and/or
other information to and from the customer with an on-line
account
- Ensure disclosures are delivered in a timely manner and are
"clear and conspicuous"/ "clear and readily
understandable" as required
- Ensure that correspondence and requests for information received
from consumers via on-line or electronic communication are responded
to in accordance with the regulations
- Consider BSA "Know your customer" implications
Non-Deposit Investment Products
Includes securities, mutual funds, and annuities See Interagency
Statement on Retail Sales of Non-deposit Investment Products.
- Ensure appropriate notices are provided or posted indicating the
services are not FDIC-insured, not guaranteed by the bank, and subject
to loss of principal
- Consider whether non-deposit investment sales are appropriately
segregated from where retail deposits are solicited in an on-line
|