Every credit unionadvertises. And, every credit union faces the same question: whatdisclosures are required on my advertisement? Often, there areinternal discussion and meetings (fights, perhaps?) at the creditunion–most likely involving those responsible for marketing andthose responsible for compliance.

How can credit unions understand and manage the compliance risksrelated to their advertising? I've been fortunate to work withcredit unions throughout the country–first as the lead complianceattorney at NAFCU and now in private practice. Based on thisexperience (I've spent a good deal of time “in the weeds” of theoverlapping regulations), below are my seven advertising compliancetips for credit unions.

1. Set Up a Formal Review Process. If yourcredit union does not already have one, establish a formal reviewprocess for all credit union advertisements. This review processhelps ensure the appropriate individuals are aware of theadvertising campaign and have provided the necessary approvals. Thenumber one way to prevent claims of unfair, deceptive or abusivemarketing is to make sure each ad is properly reviewed.

2. Create Internal Checklists. To help assistthe formal review process, I recommend that credit unions utilizechecklists to ensure advertisements contain the necessarydisclosures. The hardest part of advertising compliance is the factthat the required disclosures depend on the underlying content ofthe advertisement. A checklist can help the credit union determinewhether a trigger term is used and, if so, what additionaldisclosures must be included.

3. Analyze Ads Product-by-Product. Unfortunately, the disclosure requirements vary from product toproduct. For example, the required disclosures for a home equityline of credit ad differ from the required disclosures for aclosed-end home equity loan. When evaluating your advertisements,be sure to keep in mind which product is being promoted and whichrules apply. If you are using checklists, having them set up byproduct (rather than by regulation) is a great idea.

4. Ask Where the Advertisement Will Be Used. Anadvertisement in a credit union's branch may be compliant while thesame ad used on a billboard may be missing disclosures (or haveunreadable disclosures). A quick aside for billboard ads: if youhave to be vandalizing the billboard to read the disclosures; theyprobably are not prominent enough. While a credit union may want toget as much bang for its buck for a marketing campaign, it must beaware that the regulatory requirements vary depending on where theadvertisement is used.

5. Utilize the One-Click Rule. Related to Tip4, when credit unions are advertising online–including on their ownwebsites and via social media–they have flexibility, in certainsituations, when providing the required disclosures. When allowed(blame the regulators, not me), credit unions can include a linkthat takes consumers directlyto the additional disclosures. I'vefound that creating specific landing pages for these advertisementshelps credit unions simultaneously track impact and satisfy theone-click rule.

6. Beware the Universal Disclosure. I'm suremany of you have seen the Franken disclosure. This amalgamation ofa disclosure is used as a catch all for as many advertisements aspossible and evolves over time due to input from compliance staff,examiners and legal counsel. Whenever I see one of these universaldisclosures, I get worried as the truly important information issurrounded by inapplicable disclosures that are likely to confuseyour members (and your marketing and compliance teams). Byutilizing the tips above, you'll be able to refrain from usinguniversal disclosures by reviewing the ad by content, by productand by ad location to determine the required disclosures.

7. Do Not Assume Others Got It Right! Finally,be careful when using your competitors' advertisements as yourprimary compliance guide. Most credit union employees have eitherused or heard the phrase: “But theydon't have that disclosure, whydo we need it?” By following the tips above, you'll understandwhich disclosures are required and also realize your competition'sadvertisements may not be 100% compliant.

As a final comment, I'll simply note that credit unionadvertising has never been more visible. This is both good and bad.Credit unions have the ability to reach members (and futuremembers) on Facebook, Pandora, YouTube, their own website and inmany more places. However, the flip side is credit unionadvertisements can be viewed by regulators, attorneys, bankinggroups and any other interested party just as easily. The tipsabove will help your credit union manage compliance risk and marketyour products and services confidently.

Steve VanBeek is an attorney and counselorat Howard& Howard Attorneys in Royal Oak,Mich.CONTACT: 248-723-0521 or [email protected].