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Question:

How stringent do my advertising and social media policies and procedures need to be?

Answer:

The simple answer is very stringent. Advertising and social media are integral parts of a business strategy in 2020 and beyond, as is the need for clear and complete policies and procedures. Advertisements are a commercial message in any medium that promotes, directly or indirectly, a credit transaction. Advertising may include, but is not limited to, direct mailers, postcards, press releases, social media (both sites and posts), websites, posters, flyers, brochures, billboards, radio and/or television announcements, postings in periodicals, and/or telephone solicitations. Lenders must ensure that all advertisements be truthful and non-deceptive or misleading. Further, advertisements must contain all applicable, required disclosures.

When creating and implementing advertising and social media policies and procedures, lenders need to consider, among other things:

• Federal guidelines
• State-specific guidelines
• Company-specific guidelines
• Internal controls, including oversight & monitoring (both manually and automated)
• Crisis management
• Training
• Record retention
• Brand reputation

With regard to social media, a lender is not only responsible for what its corporate accounts indicate, but may also be held accountable for advertising content on its employees’ and vendors’ accounts. To safeguard from potential compliance violations, lenders should aim to create comprehensive policies and procedures, distribute the policies and procedures to all staff, and properly and regularly train employees and vendors on their responsibilities under such policies and procedures.