Originally published in Venable's All About Advertising Law Blog.
Social media use will soon be scrutinized as part of exams of providers of consumer financial products and services by federal and state regulators. On January 22, 2013, the Federal Financial Institutions Examination Council (“FFIEC”) released a notice and request for comment on proposed guidance on the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media by nonbank entities supervised by the Consumer Financial Protection Bureau (“CFPB”) and state regulators, as well as banks, savings associations, and credit unions regulated by other federal regulators. Comments are due before or on March 25, 2013.
The guidance is a useful tool for supervised nonbanks and banks that fall under the scope of the CFPB, as well as depository financial institutions. FFIEC guidance is generally used widely by federal and state regulators to assess compliance with consumer financial protection laws.
Upon completion of the guidance, and after consideration of comments received from the public, the CFPB (and other agency members of the FFIEC) will issue it as supervisory guidance to the institutions that they supervise. The guidance will not impose any additional obligations on supervised financial institutions, but such institutions will be expected to use the guidance in their efforts to ensure that their risk management practices adequately address the consumer compliance and legal risks, as well as related risks, such as reputation and operational risks, raised by activities conducted via social media.
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