WASHINGTON-Credit unions remain leery about proposed federal guidelines for social media, saying-among other complaints-requirements to include disclosures on federal deposit insurance would take up too many of the 140 characters that Twitter limits for tweets.
The proposals, issued by NCUA and banking regulators, would provide guidance for the use of Facebook, Twitter and other social media to ensure that users abide by proper consumer rules and regulations, and limit potential legal risks.
The guidance also would require that each insured credit union include the official advertising statement of NCUA membership, usually worded, "Federally insured by NCUA" in advertisements regardless of delivery channel, unless specifically exempted.
"Requiring us to include the words 'Federally insured by NCUA' or 'Member FDIC' or 'Equal Housing Opportunity Lender' will make it difficult to convey our messaging, especially on Twitter," Jenny Huschka, digital marketing manager for Wings Financial CU, told the Federal Financial Institutions Examinations Council in a comment letter. "I see no reason to include it in tweets."
The proposals were issued for comment in January and are expected to be finalized by year end. Many commenters criticized the regulators for getting involved in the still-emerging social media.
Cramping CUs' Social Media Style
"Content restrictions imposed by social media sites make it difficult, if not impossible, to utilize these types of media to communicate with members," commented Mike Salamena, compliance officer at Ent FCU. "For example, sites such as Twitter would not effectively allow for the posting of required logos and statements regarding NCUA insurance or equal credit due to their restrictions regarding video, graphics, and character counts."
The guidance also suggests CUs and banks adopt formal policies for using social media, including the recognitions of the potential for defamation or libel where there is broad distribution of information exchanges. Failure to adequately address these risks can expose an institution to enforcement actions and/or civil lawsuits, according to the proposals.
Not every social networking site now enables (or will enable in the future) a practical, consumer-friendly way to include required language or logos, noted Beverly Rutherford, vice president compliance at Virginia CU. "For example, on Twitter, providing an Equal Housing Opportunity or Lending logo would require attaching a graphic to a tweet, which consumes some of Twitter's 140 character limit. Including the logo or 'insured by' language for a financial institution's insurer would consume even more."
Several credit union commenters suggested a "one-click" rule, providing consumers with the ability to connect to the federal disclosures with a single click.
"The financial industry is heavily regulated and adding a layer of regulation for social media is not needed," wrote Pamela Griffiths, vice president marketing at Railroad & Industrial FCU. "If a financial institution participates in social media, the regulations in place now carry over to that source or medium. For example, the NCUA insurance coverage, EHL, privacy notice. Regulators cannot continue to piece meal the regulations. The regulations are broad, as they should be so that they can migrate to new sources of communication with members or customers. It is not practical to regulate every type of medium."
The proposals were issued by the Federal Financial Institutions Examination Council, which also includes the FDIC, Federal Reserve, Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau.