FDIC HIRES FIRM TO SURVEY ADEQUACY OF CONSUMER DISCLOSURES IN BANK SALES OF MUTUAL FUNDS AND OTHER UNINSURED INVESTMENTS
FOR IMMEDIATE RELEASE
The FDIC announced today that it has hired Market Trends, Inc.,
a market research firm based in Bellevue, Washington, to study whether
institutions are doing a good job explaining to consumers the
distinctions between FDIC-insured deposits and uninsured products
being offered by banks and thrifts, such as mutual funds.
FDIC Chairman Ricki R. Tigert said: "As the insurer of bank and
thrift deposits, the FDIC has a responsibility to the American public
to make sure that potential investors understand which banking
products are insured and which are not, and that incorrect or
misleading sales practices are detected and corrected. Based on the
results of this survey, the FDIC may consider the need for additional
investor disclosures and other protections."
The FDIC announced plans for a study of all FDIC-insured
institutions earlier this year in response to concerns from lawmakers,
bank customers and other regulators that confusion still exists
despite various educational efforts by the industry and regulators
about insured and uninsured bank products.
To implement the study, trained representatives of Market
Trends, in person and by telephone, will pose as consumers asking
typical questions about mutual funds, annuities and other nondeposit
investment products. Market Trends employees will survey a random,
nationwide sample of several thousand locations of FDIC-insured banks
and thrifts that sell these products. The study is not intended to
be used as an enforcement tool against individual banks and thrifts,but if significant problems are found at an FDIC-supervised
institution, this agency will seek appropriate corrective measures.
Problems found at other institutions will be referred to their primary
regulator for follow-up.
Results of the study, including conclusions and recommendations,
are expected to be publicly available by the middle of 1995.