NCUA “advertising statement” not needed on every ad

Q&A:  Here’s a question that a Wisconsin credit union recently asked The League’s Legal Affairs team, along with our answer. Do you have a compliance question? Contact The League’s Compliance Hotline at (800) 242-0833 or email.

Q.  If we have a billboard ad for a car loan special, is the NCUA logo required? What about on our website? Do you have general thoughts about the NCUA logo in advertising? Is it best to just put it on everything and avoid a mistake?

A.  The credit union won’t get in trouble for over-using the NCUA advertising statement, but it’s not always necessary to display it. NCUA Rules & Regulations, Part 740.5 spells out the requirements. It helps to look at the rule itself, in addition to our summary in ii Release No. 0124, starting on p. 9.

Let’s start out by noting that credit unions have four options for displaying the NCUA “advertising statement.” They can use:

• The official statement, “This credit union is federally insured by the National Credit Union Administration;” or
• A condensed statement, “Federally insured by NCUA;” or
• An abbreviated statement, “Insured by NCUA;” or
• The “official sign,” which looks like this:

 
 
Where does the advertising statement have to be displayed? As for your website, NCUA Rules sec. 740.4 requires the official sign (not just one of the other three advertising statement options) to be displayed on your main internet page and any page where you accept insured deposits or open accounts.

For other covered ads, including online advertising, one of the four advertising statements is needed. What’s a “covered” ad? The NCUA rule starts out by saying that all ads must include the advertising statement. The rule defines advertising to mean “a commercial message, in any medium, that is designed to attract public attention or patronage to a product or business.” That’s a very broad definition, but in this case, the exceptions make the rule. The NCUA carves out a list of 11 exceptions – ads that it says “need not” include the official advertising statement:

1. Credit union supplies such as stationery (except when used for circular letters), envelopes, deposit slips, checks, drafts, signature cards, account passbooks, and noninsurable certificates;
2. Signs or plates in the credit union office or attached to the building or buildings in which the offices are located;
3. Listings in directories;
4. Advertisements not setting forth the name of the insured credit union;
5. Display advertisements in credit union directories, provided the name of the credit union is listed on any page in the directory with a symbol or other descriptive matter indicating it is insured;
6. Joint or group advertisements of credit union services where the names of federally insured credit unions and Non-federally insured credit unions are listed and form a part of such advertisement;
7. Advertisements by radio which do not exceed thirty (30) seconds in time;
8. Advertisements by television, other than display advertisements, which do not exceed thirty (30) seconds in time;
9. Advertisements that because of their type or character would be impractical to include the official advertising statement, including but not limited to, promotional items such as calendars, matchbooks, pens, pencils, and key chains;
10. Advertisements that contain a statement to the effect that the credit union is insured by the National Credit Union Administration, or that its accounts and shares or members are insured by the Administration to the maximum insurance amount for each member or shareholder;
11. Advertisements that do not relate to member accounts, including but not limited to advertisements relating to loans by the credit union, safekeeping box business or services, traveler’s checks on which the credit union is not primarily liable, and credit life or disability insurance.

Number 11 is a key exception. If the ad doesn’t relate to member accounts, then the advertising statement’s not necessary.

So, to answer the specific question, no, the NCUA sign isn’t required for your lending billboard. Unless an ad is related to member accounts, the advertising statement “need not” be included, the NCUA rule says.

One final note: Whenever the credit union does use one of the advertising statements, make sure it’s readable. The rules say that it must “be in a size and print that is clearly legible and may be no smaller than the smallest font size used in other portions of the advertisement intended to convey information to the consumer.”