Statement of CFPB Director Rohit Chopra Final Rule Regarding False Advertising, Misrepresentations of Insured Status, Misuse of FDIC's Name Or Logo
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The
I am voting in favor of the final rule to strengthen the
In conjunction with our vote today, the
Federal deposit insurance, administered by the
Some market participants may seek to illegally profit off the trust conferred upon
In 2008,
The regulation that the FDIC Board of Directors is voting on today provides procedures for identifying and investigating such conduct as well as for formally and informally enforcing the prohibition. The regulation also provides standards to evaluate potential violations, establishes a point-of-contact responsible for receiving complaints about potential violations, and directs consumers to where they can obtain information or verification about deposit insurance coverage claims./6
Misrepresentation claims about deposit insurance are particularly relevant today.
Importantly, while today's regulation expressly reiterates the
The
The
The Consumer Financial Protection Circular notes that such conduct may violate the Consumer Financial Protection Act, regardless of whether such conduct (including the misrepresentation of insured status) is engaged in knowingly. For example, the Circular states that claims that financial products or services are "regulated" by the
Our federal deposit insurance framework safeguards the hard-earned money of individuals, families, and small businesses. It also underpins the stability of the nation's banking system. Today's actions by the
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Footnotes:
1/ Section 18(a)(4) of the Federal Deposit Insurance Act; 12 U.S.C. 1828(a)(4). https://www.fdic.gov/regulations/laws/rules/1000-2000.html#:~:text=1000%20%2D%20Federal%20Deposit%20Insurance%20Act&text=(A)%20IN%20GENERAL.,be%20prescribed%20by%20the%20Corporation.
2/ "A Brief History of
3/
4/ 12 U.S.C. 1818(a).
5/ Section 126(a) of the Emergency Economic Stabilization Act of 2008. https://www.congress.gov/110/plaws/publ343/PLAW-110publ343.pdf .
6/ For example, nonbank entities that place a customer's deposits into an insured depository institution (IDI) must identify the IDIs into which the funds may be placed. The nonbank must have existing direct or indirect relationships with such IDIs. This will enable customers to verify the claims regarding the insured status of their funds. The final rule permits nonbank entities that place deposits through a deposit network to provide customers with a hyperlink to a current list of the IDIs in the network.
7/ Section 328.109 was added to the final rule and states, "No provision of this subpart shall be construed as barring any action otherwise available, under the laws or regulations of
8/ See for example, 12 U.S.C. 1831t.
9/ "Consumer Financial Protection Circular 2022-02: Deceptive representations involving the
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