Because financial institutions use social media to market to consumers, facilitate new accountapplications and provide loan pricing, the Federal FinancialInstitutions Examination Council on Tuesday issued a notice andrequest for comment regarding guidance on the topic.

The proposed guidance will address the applicability of federalconsumer protection and compliance laws, as well as social mediapolicies for financial institutions and nonbank entities supervisedby the Consumer Financial Protection Bureau. Comments are duein 60 days.

The 31-page proposal addresses how social media impactscompliance and legal risk, operational risk, reputational risk, and an increased risk of harm to consumers.While the agencies note that no additional regulations apply tosocial media, the relatively casual communication channels are notexempt from the rules, either.

According to the proposal, social media risk management programsshould include a governance structure that includes how socialmedia contributes to strategic goals, policies and procedures,third party due diligence, employee training, oversight, audit andcompliance functions, and a reporting process.

The joint agency release said that social media posts triggerthe same disclosures that other forms of marketing do. For example,a post that quotes a loan rate must include all required APRdisclosures, or must provide a link that takes the consumerdirectly to the required information.

Institutions must also adhere to laws such as the Fair DebtReporting Practices Act, which prohibits the use of social media toinappropriately contact consumers, their families or friendsregarding a debt, or use social media to disclose the existence ofthe debt, harass or embarrass them.

Social media posts could also trigger the requirement todisclose the official NCUA deposit insurance advertising statement,the proposal said.

The release, in PDF format, can be viewed on the FFIEC's website.