Emerging Issues: Social Media Guidelines for Banks and Financial Institutions Explored
Social media has become an important game-changing marketing tool for businesses across industries. Banks and financial institutions are no exemption to this growing trend. The social media explosion has compelled banks and financial institutions to interact with their social media savvy clients and would-be customers in ways not previously possible. Recognizing the risks associated with the use of social media as a powerful and effective marketing method, the Federal Financial Institutions of Examination Council (FFIEC) recently issued proposed guidance on social media use by banks, savings associations, credit unions and other non-bank entities supervised by the CFPB and other state regulators. FINRA and the SEC have also issued guidance on regulating how broker-dealers, investment advisers and their personnel use social media for business purposes. All of this guidance is aimed at ensuring that banks and financial institutions’ social media efforts (advertising, promotions and brand awareness) are in compliance with existing federal consumer protection and securities laws, regulations and policies, and rules of self-regulatory organizations, whilst minimizing legal, reputation and operational risks by establishing a robust risk management program.
As banks and financial institutions continuously embrace and rely upon the use of social media to promote their products and services and attract new customers, finance executives, marketing officers and compliance personnel must have a complete understanding of the FFIEC’s, the SEC’s and FINRA’s guidance and its potential impact on their businesses and customer base. In a two-hour LIVE webcast, a panel of thought leaders and industry experts organized by The Knowledge Group will explore the significant topics surrounding this emerging issue. They will offer substantive discussion on the following:
- Overview of the Guidance from the FFIEC and Related Consumer Protection and Compliance Laws and Regulations
- Overview of the Guidance from FINRA and the SEC and Related Compliance Laws and Regulations
- How to Create an Appropriate Social Media Policy
- Effective Ways to Identify and Monitor Risks and
- Developing a Robust Risk Management Program
- Other Regulatory Updates
Alex Cheng, Policy Analyst,
- Comment and proposal process – quick update on where we are now.
- The proposed guidance does not create any new compliance obligations, but merely reaffirms that existing rules and regulations apply to a bank’s social media activities.
- Purpose of the guidance:
- The regulators are issuing the guidance now in response from requests from the industry.
- The proposed guidance provides a list of potentially relevant laws and regulations for financial institutions to refer to when planning and conducting their activities related to social media.
- Two particular risks we highlight in the guidance are third-party risk and reputation risk.
- Expectations for financial institutions/what will examiners be looking for.
Andrea L. Marconi, Director,
- Brief overview of how financial institutions use social media
- Who do the Guidelines cover?
- i.e. designed for voluntary and involuntary social media presence
- Even institutions who are not active in social media have some obligations
- What do the Guidelines cover? In particular, how broad is the definition of social media?
- Concerns regarding use of social media by financial institutions and how the Proposed Guidelines suggest financial institutions should address such concerns.
- Who do the Guidelines cover?
- Legal/compliance concerns
- Reputational concerns
- Operational concerns
- Best practices and considerations when implementing the Proposed Guidelines and the social media risk management program contemplated by the Guidelines.
Ethan Silver, Partner,
Carter Ledyard & Milburn LLP
- Overview/Background of how the regulator views social media in the context of the brokerage business
- Type of electronic forums with which firms should be most concerned
- Supervision of associated persons’ use of social media sites
- Suitability – how do customers perceive the messages?
- Training – does the firm’s personnel understand the permitted uses of this medium?
- Procedures – does this firm have adequate policies and procedures in place to handle the associated risks of use of social media?
- Recordkeeping – what types of records must be reviewed and maintained?
- 3rd Parties – How should a firm use information created by a 3rd party
- Can a firm include such information on its site and what are the risks?
- What types of social media cases has FINRA brought
- June 2013 FINRA Sweep Letter to members
- What this means
- Where this is headed
State Privacy Legislation
- What it means
- Conflict with securities regulations
John Gebauer, Managing Director,
National Regulatory Services
- Regulators are Concerned about Social Media Issues
- Regulatory Considerations
- Regulatory Considerations – Investment Advisers
- Policies and Procedures
- Training and Education
- Monitoring the General Conversation
- Testing Suggestions
Who Should Attend:
– Executives and Senior Officers of Banks, Thrifts, Credit Unions, and other Financial Institutions
– Marketing Officers
– Marketing and Advertising Professionals
– Compliance, Risk and IT Officers
– Legal Risk Officers and Administrators
– Attorneys and Consultants for Financial Companies
– General Counsel
– Managers who oversee employees utilizing social media
– Other Related/Interested Professionals
Alex Cheng is a Policy Analyst in the Supervisory Policy Branch of the FDIC’s Division of Depositor and Consumer Protection. Since joining the FDIC in 2011, he has worked on a wide variety consumer protection and economic inclusion issues, including access to banking services, mobile financial services, prepaid products, fair lending, overdrafts, and flood insurance. Prior to joining the FDIC, Alex served as a legal intern at the D.C. Superior Court, U.S. Department of Justice, and the Department of Housing and Urban Development.
Alex received his B.A. in Political Science and Psychology from Purdue University and his J.D. from American University’s Washington College of Law, where he served as Senior Articles Editor for the Human Rights Brief. He is a member of the Illinois Bar and the Asian Pacific American Bar Association of DC.
Alex Cheng is a Policy Analyst in the Supervisory Policy Branch of the FDIC’s Division of Depositor and Consumer Protection. …
Andrea Marconi practices in the areas of commercial litigation and business torts. She has extensive experience in litigating complex commercial disputes for a diverse group of national and international business clients in a wide variety of industries. Ms. Marconi has a particularly strong background in business and real estate contracts, financial transaction provider regulatory actions and compliance, matters involving allegations of deceptive or abusive trade practices and related compliance, electronic financial transactions, payment processing and ACH and credit card transactions. Ms. Marconi also has experience with health insurance regulations and litigation and representing numerous clients in resolving disputes concerning intellectual property rights, including patent, trademark and copyright infringement claims, trade dress violations and related indemnification actions.
Andrea Marconi practices in the areas of commercial litigation and business torts. She has extensive experience in litigating complex commercial …
Ethan Silver is a Partner in Carter Ledyard’s Corporate Department and the Securities Practice Group. Mr. Silver’s practice focuses primarily on advising individuals and financial institution clients, specifically broker-dealers and investment advisers, on regulatory, compliance, enforcement, SEC and FINRA investigations and examination issues, and many other related issues involving federal and state securities laws and the rules of various self-regulatory organizations. Prior to going into private practice, Mr. Silver was Senior Counsel in the Division of Enforcement of the New York Stock Exchange and an Enforcement Attorney in the Bureau of Securities of the New Jersey Attorney General. He is a member of the SIFMA Compliance and Legal Division and the Business Law Division, Federal Regulation of Securities Committee of the American Bar Association. Mr. Silver received his B.A. from the University of Maryland, College Park and his J.D. from New York Law School.
Ethan Silver is a Partner in Carter Ledyard’s Corporate Department and the Securities Practice Group. Mr. Silver’s practice focuses primarily …
JOHN E. GEBAUER is Managing Director of National Regulatory Services. John joined NRS in 1992 to establish a software development division at NRS dedicated to providing automated solutions for the financial services industry. Under his guidance, NRS has developed and marketed many software programs including E-Z Registration software, Registration Management System, ComplyNet, IA-Info, and the NRS Regulatory Databases.
Prior to coming to NRS, John was a Senior Systems Engineer at Mycroft, Inc., and a Systems Engineer for the Grumman Corporation. While at Grumman, John specialized in managing the requirements development process of large-scale military space satellites. He also oversaw the development of algorithms used to determine the inertial effects of multi-dimensional movement of objects in space.
John received his Bachelor of Science degree from Columbia University in 1986 and completed graduate studies in Systems Engineering at Polytechnic Institute.
JOHN E. GEBAUER is Managing Director of National Regulatory Services. John joined NRS in 1992 to establish a software development …
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On-demand Webcast (CLE)
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About Carter Ledyard & Milburn LLP
Carter Ledyard & Milburn LLP (www.clm.com), established in 1854, has approximately 100 attorneys and has been headquartered on Wall Street since its founding. Carter Ledyard’s general practice includes corporate, securities, mergers and acquisitions, broker-dealer, on-shore and off-shore hedge and other alternative investment funds, private equity, litigation, intellectual property, environmental, employment, media and technology, immigration, investment regulation, antitrust, art law, trusts and estates, maritime, ERISA, tax-exempt organizations, real estate, tax and bankruptcy. A significant part of the firm’s practice involves representing overseas-based clients and their U.S. affiliates, financial institutions and other financial services providers, governmental entities and media and technology clients.
About National Regulatory Services
National Regulatory Services (NRS) is the nation’s leader in compliance and registration products and services for investment advisers, broker-dealers, hedge funds, investment companies and insurance institutions. NRS has the practical expertise, proven capability and unparalleled reach to deliver integrated and effective compliance solutions to a wide range of users within the financial services industry. NRS delivers these solutions through three interrelated offerings – comprehensive education, best-in-class technology and expert consulting services – enabling our clients to meet their regulatory requirements and minimize risk. NRS is part of BankersAccuity, the global standard for payment efficiency and compliance solutions.