Amy K’s Throwback Thursday
by Amy Kleinschmit
Chief Compliance Officer

NCUA Advertising Rule

Last April, the National Credit Union Administration (NCUA) issued a final rule amending their Accuracy of Advertising and Notice of Insured Status regulations. The final rule can be found here and was effective May 25, 2018.

These amendments were are aimed at providing credit unions regulatory relief and were proposed in October 2017. The NCUA received 36 comments in response to these proposed changes, which included a comment letter from your association – the Credit Union Association of the Dakotas.

This final rule makes the following changes to Part 740.5 – Requirements for the official advertising statement.

  • Adds a fourth option for the NCUA’s official advertising statement consisting of 13 characters (down from 22 or 71 which are the existing options) – specifically adds, “Insured by NCUA.” NOT approved were “NCUA Insured” or “Member NCUSIF.”

Section 740.5 requires that each insured credit union must include the “official advertising statement” in all of its advertisements, including on its main Internet page. The “official advertising statement” is one of the following four options:

  • “This credit union is federally insured by the National Credit Union Administration”
  • “Federally insured by NCUA”
  • “Insured by NCUA” or
  • A reproduction of the official sign.

A requirement that did not change is the font size of the official advertising statement – no fine print! The official advertising statement must be in a size and print that is clearly legible and may be no smaller than the smallest font size used in other portions of the advertisement intended to convey information to the consumer. Meaning, for example, if your advertisement is in 14 point font, the “Insured by NCUA” also must be in 14 point font. Also, meaning if you use the NCUA logo instead of the “Insured by NCUA” the text in the logo must comply with these minimum font size requirements.

The final rule removes the requirement to include the official advertising statement on “annual reports and statements of condition required to be published by law.”

Section 740.5 includes eleven exceptions for advertisements that do not need to include the official advertising statement. The final rule amends exceptions for advertisements by radio and television – previously excluded if the advertisement did not exceed fifteen (15) seconds, the final rule increases this exemption to thirty (30) seconds in time. Caveat with advertisements by television, this exception does not expand to display advertisements which would still need the official advertising statement in the compliant font size. 

Although the board had asked for feedback regarding advertising and social media and received comments/suggestions, the NCUA did not take action to amend part 740 regarding social media at this time. Instead noting that, “the Board believes that part 740 provides a sufficient framework to inform potential and current credit union members regarding federal share insurance coverage for advertisements made in traditional ways and on social media. Additionally, the NCUA’s Office of General Counsel is authorized to provide guidance to any FICU with questions regarding part 740 in the context of advertising on social media.” So for now, remember, any advertisements made via social media must comply with these, and other, advertising rules.


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