The Federal Deposit Insurance Corporation (FDIC) recently approved a final rule regarding statutory authority prohibiting misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.
“These practices not only harm those who are targeted with the false promise of deposit insurance but, if left unchecked, could also undermine confidence in the FDIC, FDIC-insured banks, and the U.S. banking system,” Acting Chairman Martin J. Gruenberg said.
The final rule is slated to take effect 30 days after publication in the Federal Register. In recent years, the FDIC has observed a rise in the number of circumstances in which individuals or entities made false or misleading representations about deposit insurance or misused the FDIC’s name or logo.
According to the FDIC, to provide transparency, the final rule clarifies the FDIC’s procedures for identifying, investigating, and, where necessary, taking formal and informal enforcement actions against individuals or entities to address the violations.
“I would further note that, while the rule adopted by the Board is an important step, the FDIC is also considering revising and clarifying the agency’s official sign and advertising rules related to FDIC deposit insurance,” Gruenberg said via a statement regarding the final rule adoption. “The FDIC official sign and advertising rules were last significantly updated in 2006. In that time, it has become more challenging for consumers to know when they are dealing with an insured institution and that their money is safe in an insured product.”