There's a stereotypical perception that credit union marketersand compliance officers just don't get along. But like moststereotypical scenarios, this one is almost always misleading.

In fact, marketers and compliance officers who form strongprofessional partnerships are successful in ensuring their social media marketing projects are not misleading, which canprotect the credit union's reputation, prevent potential classaction lawsuits and help avoid uncomfortable conflicts with NCUAand state examiners.

What's more, NAFCU has been urging the NCUA to modernize Part740, which regulates advertising to accommodate the growth ofsocial media, mobile banking and other digital communicationsprograms. NAFCU said it continues to hear from its members thatapplying Part 740 to social media is unclear, complicated andburdensome.

Compliance experts and credit union professionals agree thatknowing the basic compliance requirements to sidestep pitfalls andproblems can go a long way in helping craft and implement compliantsocial media marketing campaigns.

“There are somecompliance pitfalls, and we do a lot of training for variousleagues and for credit unions specifically on social mediacompliance issues because it's a big area of concern,” said GayeDeCesare, president/CEO of COMPASS 4 CUs LLC., a Woodbridge,Va.-based compliance services company.

Some of the less-than-obvious pitfalls are around unfair,deceptive and abusive acts or practices.

The Dodd-Frank Act of 2010 defined UDAAP as acts or practicesthat financially harm consumers and interferes with a consumer'sability to avoid financial harm.

For credit unions, that means they have to be careful with howthey word their social media promotions.

“It's always kind of a fine line, but we’ll see something like,‘we’ll beat the competition’ for a car loan ad,” DeCesare said.

A credit union can get into trouble with that wording becauseit's questionable whether they will always beat the competition, orif it will have a rate that's better than the 0% financing offeredat dealerships.

“Sometimes we’ll see credit unions say that all of your friendsand family can join, but more often than not, that isn't the casebecause they have a restricted field of membership,” DeCeasareexplained. “We’ll also see wording like ‘prequalified’ or ‘getpreapproved before shopping for your next car,’ but not everyonecan be preapproved because of credit problems. We should rewordthat promotion to say ‘apply for preapproval’ or something likethat. We see a lot of credit unions getting into trouble makingstatements like these that are a little bit hyperbolic, Iguess.”

Another issue that gets credit unions into trouble is featuringphotos with promotions that fail to show diversity.

“You want to make sure that you are not giving the impression ofpreferring one group or something like that,” she said. “So youdon't want your pictures only showing young white couples.”

Photos should feature a mix of races, ages and genders. Even ifyour credit union's employees and members are 95% white, DeCeasaresaid credit unions still need to post images that showdiversity.

Discrimination issues can surface in other areas as well.

Todd Pietszch,public relations manager for the $14.4 billion BECU in Tukwila,Wash., works on a social media team that develops campaigns for thestate's largest credit union. In developing a sponsorship socialmedia promotion for a local RV show, Pietszch said the credit unionoffered free admission to its members. But the social media teamlearned it couldn't offer free admission to members who only had acredit or debit card.

“From a compliance perspective, you can't do that because somemembers don't have a credit or debit card,” Pietszch said. “So wehad to add words that would allow members to show a statement orsome other proof of membership to get free admission.”

So while Pietszch encouraged credit unions to develop a strongrelationship with compliance officers, he said it's also importantto provide them with all the details of a social media marketingcampaign to prevent compliance problems.

Compliance problems can also easily surface when credit unionsdon't pay attention to the rather complex details of trigger termsthat always require disclosures.

For example, a specific interest rate is a trigger term thatrequires compliance disclosures due to Truth in Savingsregulations. If a credit union decides to promote a rate for ashare account or certificate, it can use “APY” but must alsoinclude the words “annual percentage yield” at least once.

Other required disclosures include statements about ratechanges, fees that may reduce earnings, the minimum balance and theduration of the rate.

In terms of posting an interest rate for a loan product, underRegulation Z, credit unions must also use “APR” and “annualpercentage rate.”

Some credit unions circumvent these requirements by not listinga rate for a loan, for example, and using general statements suchas, “come check out our low auto loan rates,” DeCesare said.

Open-end andclosed-end loans also have a variety of trigger terms and rulesthat credit unions must review with compliance officers to avoidany delays in launching social media marketing campaigns.

For example, for a closed-end loan, a trigger term is the numberof payments or the repayment period, such as 48 months for a carloan or 20 years for a mortgage loan. For open-end loans such ascredit cards, listing the APR requires disclosures of fees and astatement that the rate may change.

The good news is credit unions don't need to include all ofthese disclosures in a social media post. They do, however, have toinclude a hyperlink that takes members to a landing page with allof the required disclosures, DeCesare said.

However, there is no one-click rule for credit unions marketingan insured share account. That promotion must feature the officialNCUA logo or the statement that the credit union is federallyinsured by the NCUA. And when a credit union advertises mortgages,the equal housing logo or the statement “equal housing lender” mustbe included.

Even compliance experts agree that all of the rules andregulations can be complex and confusing, and are not particularlyconducive to social media marketing.

NAFCU is currently making efforts to change the rules to givecredit unions more flexibility.

In December 2013, the Federal Financial Institutions ExaminationCouncil issued guidance regarding social media and its effect onconsumer compliance and risk management.

“While the FFIEC guidance was useful to credit unions, NAFCUcontinues to hear from our members that applying Part 740 to socialmedia is unclear, complicated and burdensome,” NAFCU wrote in aletter to the NCUA last year. “NAFCU and our members believe theserules should be amended with the use of social media in mind toinclude more flexibility as opposed to the rigidity of the currentrules.”

Alexander Monterrubio, NAFCU's director of regulatory affairs,said the national organization continues to address the issues ofPart 740 and noted that the regulations are up for review by thefederal agency this year.

However, because the NCUA board is undergoing leadershiptransitions this year and a new president will be in charge ofappointing board members starting in 2017, it's uncertain whetherthere will be any modifications to Part 740.