ACME Bank has a separate page on its Web site where it describes insurance products, such as life insurance and health and disability insurance. The page invites consumers to call the bank officer in charge of selling these products. The Web site's lending page also describes consumer loans and uses the following phrase: "Have peace of mind""credit life and disability insurance are available on all consumer loans to qualified borrowers." Neither the insurance page nor the lending page mentions insured deposits. What does ACME need to do to make sure its Web site is in compliance?
Click on the arrows to vote for the correct answer
A. B. C. D.C
ACME Bank is required to comply with advertising regulations issued by the Federal Deposit Insurance Corporation (FDIC) and other relevant regulatory bodies. These regulations aim to ensure that customers are not misled or confused by advertisements, and that they understand the risks associated with different financial products.
In this scenario, the bank's website has a page dedicated to insurance products, such as life insurance, health insurance, and disability insurance. The page invites consumers to call the bank officer in charge of selling these products. The website's lending page mentions credit life and disability insurance as being available on all consumer loans to qualified borrowers. However, neither the insurance page nor the lending page mentions anything about insured deposits.
To ensure compliance, the bank needs to provide certain advertising disclosures that make it clear to customers that the insurance products being offered are not insured deposits. The correct answer to this question is option C: "Place the advertising disclosures on both the Web site's insurance page and its lending page."
The required disclosures typically include phrases such as "Not a Deposit," "Not FDIC-Insured," "Not Insured by Any Federal Government Agency," and "Not Guaranteed by the Bank." These disclosures should be prominently displayed and clearly visible to customers. By placing these disclosures on both the insurance and lending pages of the website, the bank ensures that customers are aware of the risks associated with the insurance products being offered and can make informed decisions.
Option A, "Nothing. As long as the insurance products are segregated, the Web site is in compliance," is incorrect because segregation alone is not enough to meet the regulatory requirements. The bank must still provide advertising disclosures.
Option B, "Place the advertising disclosures (not a deposit, not insured by the FDIC, and so on) on the insurance page," is also incorrect because it only addresses the insurance page and not the lending page. Both pages need to include the required disclosures.
Option D, "Create a separate Web site for all insurance products," is unnecessary and potentially confusing for customers. The bank can simply add the required disclosures to the existing pages, as mentioned in option C.