January Webinar to Teach CUs Online Compliance
Credit unions could use a refresher course in the often-neglected area of online marketing and advertising content compliance. That’s the message from Kyle Woodmansee, the compliance specialist for Des Moines, Iowa-based consulting firm PolicyWorks, who will present an hour-long webinar, “Three Commonly Overlooked Website Compliance Issues,” on Jan. 26.
The webinar will address regulatory compliance issues for credit unions specifically pertaining to online marketing and advertising efforts, PolicyWorks said. Woodmansee, who works with credit unions on a regular basis performing compliance reviews, developing compliance procedures and completing website audits, said online compliance is especially important because credit union websites typically make first impressions on consumers.
“With consumer trends leaning toward online and mobile app banking, your front line is your online presence,” Woodmansee said. “Your website is available 24/7 and is probably the first thing a potential member will visit, so you need to have a strong focus on making it compliant.”
Woodmansee authored a white paper, “Four Common Mistakes Credit Unions Make Online,” in which he lists the four most significant online compliance concerns; first, credit unions do not always include necessary disclosures in materials they believe are viewed by members only and are in fact being viewed by the public. Second, they sometimes mislead consumers by using the word free in advertising or marketing content. Third, they may fail to include necessary disclosures in giveaway-related promotional content. Finally, credit unions often use phrases called trigger terms that raise red flags for compliance examiners, such as no closing costs and 0% APR.
Regulations that affect online marketing and advertising content include the Truth in Savings Act, Truth in Lending Act/Regulation Z, disclosures required by the Department of Housing and Urban Development and NCUA Rules and Regulations, Woodmansee said.
Striking a balance between compliance and effective marketing is a significant challenge for credit unions looking to attract business while not misleading consumers, he added.
“You need to figure out how to get the marketing message across and still be compliant,” he said. “There’s often tension between the compliance officer and the marketing officer at a credit union. You want the content to be compliant, but you also don’t want to list a bunch of disclosures that you don’t need.”
To get started on an online advertising and marketing compliance overhaul, Woodmansee recommends credit unions enlist the help of outside expertise.
“There are so many things related to advertising loan and savings products that it’s difficult to keep track of all the regulations,” he said. “Having a third party come in will make it easy. It’s also a good idea to have another set of eyes review your content because someone else might have a different opinion about what can be misleading.”
One place credit unions can turn to for guidance is a regional credit union association or league. The Northwest Credit Union Association, which has offices in Beaverton, Ore., and Federal Way, Wash., for example, offers marketing and advertising compliance guidelines developed by credit union leagues through a secure online resource database, Infosight.
These guidelines explain how credit unions can ensure their online advertising content complies with the Truth in Lending Act/Regulation Z. According to the guidelines offered through Infosight, loan product advertisements must “disclose the terms of the credit clearly and conspicuously,” and advertisements must be “legible and reasonably understandable.” For credit product advertisements, credit unions must also state the specific terms being offered to its members and any conditions it plans to impose on the credit product.
With so many regulatory burdens weighing on credit unions, monitoring their online advertising and marketing content is just one piece of the compliance puzzle. Pat Wesenberg, CEO for the Marshfield, Wis.-based, $179 million Central City Credit Union said her in-house, full-time compliance officer reviews all marketing and advertising content to ensure compliance. She said when it comes to online compliance, the biggest change for her credit union has not pertained to advertising and marketing, but to online banking login restrictions – members now have to use a complex password and change it every 90 days.
Woodmansee said so far, his upcoming webinar has piqued the interest of credit unions looking to shape up their online content. “We’ve had a very positive response,” he said. “Credit unions are looking for guidance.”