By Donya Parrish, VP- Risk Management
Those of you working in lending and operations already know there are a lot of regulatory requirements to comply with in serving your members. That doesn’t change when you visit the world of creativity and fun that is the marketing department. One of the difficulties in trying to explain multiple compliance requirements is that they don’t always seem logical. (Of course, disclaimers also take away from the look and simplicity of many ad campaigns, but that is another issue.) Many of the regulations and rules were written years ago often to combat a specific problem, so seeing how similar issues might be handled differently is confusing.
For example, one of the common things seen in ads is “APR” being spelled out in a disclosure as the “Annual Percentage Rate.” It is not required, ever. What is required is to spell out “APY” as the “Annual Percentage Yield.” Wait — why would a consumer be able to decipher one but not the other? Who knows; but the lending regulations spend more time on “what if” scenarios while the deposit regulations seem to focus on disclosures and making sure every term is defined.
Another confusing example involves the use of the NCUA and Equal Opportunity/Housing Lender logos on ads. There are four different statements (i.e. “Federally Insured by NCUA”) that you can use when the use of the NCUA logo is not reasonable or readable. There are no alternatives provided that can be used in place of the Equal Housing Lender. Now, that logo doesn’t have all the fine print and is a widely accepted visual that denotes fair lending, but it has always seemed like an odd difference to me.
Lastly, with credit unions always working to make the most of their members’ hard-earned funds, I have a lot of conversations about what types of notice are acceptable when a regulation changes. Unfortunately, most federal regulations have not yet caught up to the digital age and do not allow notice via email or your website as the sole method of notification. We may be there someday. Until then, you generally can keep costs contained by sending the message only to those impacted, keeping your messaging as short as possible, and not changing a thing. Just kidding, evolving and changing is a positive… as long as you get those notices out via snail mail!