CFPB clarifies deceptive and misleading use of FDIC logo, protection

The Consumer Financial Protection Bureau (CFPB) this week took action to clarify regulations around the use (and misuse) of the logo and auspices of the Federal Deposit Insurance Corporation (FDIC). The FDIC is the federal agency that ensures bank deposits up to $250,000.

In a statement, CFPB Director Rohit Chopra noted that consumers have a positive association with the FDIC and that misuse of the FDIC logo or representation that financial products are protected by FDIC carries significant weight. As such, misrepresentations around FDIC protection can carry heavy consequences for consumers.

“People know and trust the FDIC name and logo, and firms must not prey on that trust by making deceptive representations about deposit insurance,” said CFPB Director Rohit Chopra. “Companies undermine competition, erode confidence in the deposit insurance system, and threaten our hard-earned savings when they engage in false marketing or advertising.”

The CFPB outlined specific ways the new regulation will protect consumers in reference to particular harms resulting from misrepresentation of FDIC protections.

• Misrepresenting the FDIC logo or name will typically be a material misrepresentation. Material misrepresentations are deceptive practices in violation of the Consumer Financial Protection Act. Representations made by covered firms to consumers about FDIC insurance will typically be material. The misuse of the...

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