4000 - Advisory Opinions
Guidelines for Advertising of Insured Status by Savings Associations
July 25, 1991
Valerie J. Best, Counsel
You have requested our opinion as to how your institution, a savings association, may display evidence that its deposit accounts are insured by the Federal Deposit Insurance Corporation ("FDIC"). Attached for your reference is a copy of Part 328 of the FDIC's rules and regulations (12 CFR Part 328). Part 328 governs advertisement of federal deposit insurance coverage by insured institutions. The bank (FDIC) sign is shown in section 328.1(a); the savings association (American Eagle) sign is shown in section 328.1(b).
Signs Displayed on an Institution's Premises
Section 328.4(a) of the FDIC's regulations requires each insured savings association to continuously display the savings association sign at each teller station or window where insured deposits are usually and normally received in its principal place of business and at all of its branches. A sign need not be displayed, however, at automatic service facilities including automated teller machines, cash dispensing machines, point-of-sale terminals, and other electronic facilities where deposits are received. 12 CFR 328.4(a). The only "evidence" your savings association needs to display to indicate that its deposit accounts are federally insured is the savings association sign. You may obtain savings association signs free of charge by writing to the following address on your institution's letterhead: FDIC, Attention--Warehouse, 550 17th Street, N.W., Washington, D.C. 20429.
Please be advised that federal law and FDIC regulations specifically prohibit a savings association from displaying the bank sign at the savings association's principal place of business or at any of its branches. 12 USC 1828(a); 12 CFR 328.4(e). To explain in more detail, the insurance sign that a savings association must display at its place of business is mandated by law. 12 USC 1828(a). The law requires that a savings association display at each place of business a sign containing only the following items: a statement that insured deposits are backed by the full faith and credit of the United States Government; a statement that deposits are federally insured to $100,000; the symbol of an eagle. 12 USC 1828(a)(1). The law specifically states that the sign shall not contain any reference to a government agency. Consistent with the requirements of 12 USC 1828(a), the FDIC adopted regulations on August 9, 1989 that require a savings associations to display the savings association sign and, further, prohibit a savings association from displaying the bank sign at its principal place of business or at any of its branches. 12 CFR 328.4.1
Although your savings association may not display the bank sign, neither are we aware of a law which would preclude your savings association from referring to the FDIC at its principal place of business or at any of its branches so long as the following guidelines are followed. (1) A savings association may not display a sign that is a colorable imitation of the bank sign. The reason being that if a sign closely resembles the bank sign, its display violates the prohibition contained in 12 USC 1828(a) and in section 328.4(e) of FDIC regulations. Whether a sign is a colorable imitation of the bank sign would depend in part on whether a casual observer might be confused into thinking he or she was viewing the familiar "FDIC" bank sign. Signs vary, and we are therefore unable to give you more exact parameters. It is our opinion, however, that deleting the symbol within the letter "C" and/or deleting the text above or below the letters "FDIC" is not sufficient to distinguish a sign from the bank sign. Furthermore, the use of block letters (or a similar typeface) may be objectionable because the bank sign uses block letters. (2) A sign referring to the FDIC should not be displayed in proximity to the savings association sign. In our opinion, displaying a sign that refers to the FDIC in proximity to the savings association sign violates the provision that the savings association sign shall not contain any reference to a government agency. In addition, such a display violates the provision that a savings association shall display a sign containing only the items listed in 12 USC 1828(a)(1). (3) Any signs referring to the FDIC must be factually correct and not misleading.
To summarize, display of the savings association sign--which states that deposits are backed by the full faith and credit of the United States Government--should be sufficient to assure your customers that deposits in your institution are federally insured. If customers continue to doubt your institution's insured status, they may call or write to the appropriate FDIC Regional Office for verification of your insured status. Alternatively, you could show your customers the certificate of insurance issued to your institution by the FDIC. If you wish to display a sign indicating that your institution is insured by the FDIC, the sign (1) must not be a colorable imitation of the bank sign, (2) must not be displayed in proximity to the savings association sign, and (3) must be factually correct and not misleading.
Savings Association Advertising
The FDIC does not currently require a savings association to include a statement in its advertisements to the effect that depositors are federally insured. Should your savings association wish to indicate in its advertisements that depositors are federally insured, it may quote the language of the savings association sign ("Deposits Federally insured to $100,000" and/or "backed by the full faith and credit of the United States Government"). It may also set forth the savings association sign in its advertisements. In that regard, you may obtain camera-ready art work of the savings association sign, including signs reduced in size suitable for printing in newspaper advertisements, by writing to the FDIC at the above address, Attention--Design & Printing Unit.
A savings association may advertise that it is "FDIC-insured." (See discussion in advisory opinion 89-24 from General Counsel John L. Douglas, dated September 21, 1989. A copy is attached for your review.)
We have also been asked whether a savings association may refer to itself as a "Member FDIC" on its premises and in its advertising. The savings association sign was specifically designed by Congress to restore confidence in thrifts. We believe savings associations would be better served by using the savings association sign or the text of the savings association sign. Nonetheless, savings associations are not prohibited from using the phrase "Member FDIC."
It is our opinion that a savings association should not use the bank sign in advertisements. Further, references to the FDIC in savings association advertisements should not be done in such a fashion that the reference is a colorable imitation of the bank sign. Finally, advertisements referring to the FDIC should be factually correct and not misleading.
Savings Association Supplies (i.e., Stationery, Pamphlets, Calendars, etc.)
Along related lines, the FDIC does not require a savings association to display on its supplies a statement to the effect that its deposits are federally insured. Should your savings association wish to indicate on its supplies that funds are federally insured, it may quote the language of the savings association sign or it may set forth the savings association sign on its supplies. As outlined above, however, it is our opinion that a savings association should not use the bank sign on supplies. And again, references to the FDIC on savings association supplies should not be done in such a fashion that the reference is a colorable imitation of the bank sign.
You may wish to contact your primary federal regulator, the Office of Thrift Supervision ("OTS"), for guidance as to when deposit insurance must be referenced. For example, 12 CFR 563.233(d) requires savings associations to include in each statement of condition the phrase "Federal Deposit Insurance Corporation (FDIC), an agency of the U.S. Government, insures all depositors up to $100,000 in accordance with the rules and the regulations of the FDIC."
Please note that the FDIC may issue regulations or guidelines that, in their final form, depart from the above guidelines.
I hope that the foregoing information is helpful to you.
1Legislative history provides further evidence that Congress
intended to prohibit savings associations from using the bank sign.
Consider the following discussion concerning the amendment that
ultimately was passed into law as 12 USC 1828(a):