Blog: FDIC proposes misrepresentation, logo misuse guidance – Financial Regulation News – Financial Regulation News

The Federal Deposit Insurance Corporation (FDIC) has issued proposed guidance regarding statutory authority prohibiting FDIC deposit insurance misrepresentation or name or logo misuse.

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The statutory authority would enable the FDIC to initiate formal enforcement actions that include cease and desist orders or civil financial penalties against individuals or entities for violations. Proposed rule comments would be accepted for 60 days after publication in the Federal Register.

The proposed guidance describes the process in which the FDIC would identify and investigate potential violations, as well as the procedures it would follow when formally and informally enforcing the statutory prohibitions, per authorities.

Additionally, the proposed rule would also create a central point-of-contact to field public reports or make inquiries about potential violations while establishing a more transparent process promoting stability and public confidence in FDIC deposit insurance and the nation’s financial system.

The FDIC has experienced an increase in the number of cases where individuals or entities have misused the FDIC’s name or logo, made false or misleading representations about deposit insurance. In the past, the FDIC has resolved such matters by sending a letter to the responsible parties requesting corrective action be taken.

The proposed rule includes a similar informal resolution process as well as more formal enforcement procedures.

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