NCUA Official Sign; Official Advertising Statement; NAFCU Services Video Ads

Written by Steve Van Beek

As the January 1, 2012 compliance date approachs, we've seen a steady influx of questions related to the changes in NCUA's advertising regulations.  

Part of the confusion stems from the terminology used in the regulation.  Part 740 of NCUA's regulation discusses the "Official Sign" as well as the "Official Advertising Statement."  

For example, Section 740.4(a) requires that the official sign be used at teller windows and on the credit union's main Internet page on Internet pages where the credit union accepts deposits or opens accounts (edited: Nov. 29 at 12:45 p.m.):

"§ 740.4   Requirements for the official sign.

(a) Each insured credit union must continuously display the official sign described in paragraph (b) of this section at each station or window where insured account funds or deposits are normally received in its principal place of business and in all its branches, 30 days after its first day of operation as an insured credit union. Each insured credit union must also display the official sign on its Internet page, if any, where it accepts deposits or open accounts, but it may vary the font sizes from that depicted in paragraph (b) of this section to ensure its legibility."

To meet this requirement, credit unions need to use the official sign itself.

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For advertisements, credit unions have flexibility in disclosing the official advertising statement.  Credit unions can use any of the following:

1. The Official Sign
2. The long version - "This credit union is Federally insured by the National Credit Union Administration"
3. The short version - "Federally insured by NCUA"  

That flexibility comes from 12 CFR 740.5(b).  The credit union only needs to include one of these disclosures on its advertisements.

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NAFCU Services Corporation, a subsidiary of NAFCU, has video ads for NAFCU-members.  These ads can be customized for credit unions for $150.

Importantly, the ads have been updated to reflect the new advertising rule changes.  

If you haven't seen the ads before, take a look and see if one or more might be of use for your credit union.  For example, there are ads on the benefits of credit unions as well as ads describing the federally-insured status of credit unions.  These might be useful for attracting new members and educating those new members of their insurance coverage.   

Comments

[Joyce]

Can I clarify something? Sorry...sometimes clarifications give rise to more questions. I agree that 740.4 states we must use the official SIGN (found under 740.4(b)) on the Internet page were we take deposits or open accounts (in our case on our Internet Banking page). But our MAIN Internet page (aka home page) is permitted to just have the official STATEMENT if we choose in accordance with 740.5(a). Is this correct? I prefer to use the SIGN but we're having graphic issues right now and we're just using the statement but the majority wants to retain just using the statement even after the graphic issue is fixed.

[Steve Van Beek]

Joyce,
This is an important distinction - I'm glad you brought this up. Today's post was not accurate in using the term "main Internet page" when discussing the requirements of 740.4(b).

You are right that 740.5(a) includes the requirement for the "official advertising statement" on the main Internet page. The credit union could use any of the three options on its main Internet page - provided that page is not one where members can deposit funds or open accounts. If members can deposit funds or open accounts from the main Internet page, the requirement from 740.4(b) would kick in.

Keep in mind that even though the official sign wouldn't be required in your situation, it might be a situation where members (and examiners) are used to seeing the official sign used on the main Internet page.

[Kristie Kenney]

Please help clarify something... Is the "official sign" required to be displayed at the night depository? Is the "official sign" required to be displayed at a Credit Union's ATM that accepts deposits?

[Steve Van Beek]

Kristie,

Section 740.4(e) of NCUA's regulations indicates "automatic teller machines" are excluded from the requirement for the official sign. Night depositories are a bit more complex and we'll discuss in a future blog post.

[Kirsten Younkin]

Can I get Steve Van Beek email address?

[Jason Goodman]

Is the "Official Sign" required at each drive-thru teller station outside or can they be posted at each station on the window of the branch building facing the car lanes?

[Steve Van Beek]

Jason,
I haven't seen clarification from NCUA on this issue. The regulation states "at each station or window." You'd have an argument that you have only one window. However, the counterargument is that you have two (or more) "stations".

Unless NCUA provides some clarity, it is a business decision. The conservative approach would be to provide the Official Sign at each station.

[Julie Reinoso]

Steve, what if we have a drive thru in which there is not teller window facing the cars? Is putting the NCUA sticker on the tubes sufficient?

[Steve Van Beek]

Julie,
Great question - you'd have a pretty good argument that putting the NCUA sticker on the tube would meet the "at each station" test.