In January, the Federal Financial Institutions Examination Council (FFIEC) proposed guidelines for the use of social media by financial institutions (including banks, savings associations, credit unions, mortgage lenders, and other nonbank entities supervised by the Consumer Financial Protection Bureau and state regulators). Once finalized, the FFIEC guidance is expected to be adopted by the agency members of the FFIEC including the CFPB.
The proposed guidance is far more encompassing than existing federal rules and other regulations that address the use of social media for regulated financial entities. It says the use of social media requires compliance with all federal, state, and local regulations and guidance, instead of just rules around advertising and communication. With the FFIEC’s guidelines adding to the long list of existing governance rules for financial institutions, where should the financial institutions start? Certainly, abandoning the use of social media is not a viable solution, as social media is becoming a standard medium for public communication.