on 4/22/21, the FDIC issued a proposed rule implementing its statutory authority to prohibit any person or organization from making misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo. This statutory authority allows the FDIC to bring formal enforcement actions, such as cease and desist orders or civil money penalties, against individuals or entities for violations.
According to the FDIC’s release:
“The proposed rule describes the process by which the FDIC would identify and investigate potential violations, and the procedures it would follow, when formally and informally enforcing the statutory prohibitions. The proposed rule would also create a central point-of-contact where the public could report or make inquiries about potential violations. Additionally, the proposed rule would establish a more transparent process that would promote stability and public confidence in FDIC deposit insurance and the nation’s financial system.
Recently, the FDIC has noticed an increase in the number of cases where individuals or entities have misused the FDIC’s name or logo, or have made false or misleading representations about deposit insurance. Historically, the FDIC has resolved these matters by sending a letter to the responsible parties requesting corrective action be taken. Between January 1, 2019 and December 31, 2020, the FDIC sent 165 such letters. The proposed rule includes a similar informal resolution process as well as more formal enforcement procedures.”
Comments are due 60 days after publication in the Federal Register.
The proposal can be found here.