Advertising has been identified as having a high potential for UDAAP violations. Social media is no exception. The specific requirements for advertising under Regulation DD (and Regulation Z) do include requirements for electronic media (such as a website). Regulation DD defines advertisement to include any medium, and does provide an exemption for social media from the requirements. UDAAP exam procedures include social media advertisements. The bank must be aware of and address the compliance requirements to ensure that that products are advertised properly and do no mislead or deceive consumers.
508 compliance should also be considered. Ensure that the bank includes contact information, as applicable, a telephone number and/or website. For social media advertisement, ensure that any disclosures, hyperlinks, etc., provide proper access to disclosures (for example, nothing is obscured by a link or popup), and that terms and conditions stated are in proximity to related items. If the bank is using a third party for social media – ensure that the bank knows what information is collected, it could be a fair lending issues especially if credit is involved.
Reference: Regulation DD 1030.2; 1030.8; Regulation Z 1026.16; 102.24. CFPB TISA exam procedures October 2012, page 25. CFPB UDAAP Exam Procedures, October 2012.