Accuracy of Advertising and Notice of Insured Status

NATIONAL CREDIT UNION ADMINISTRATION <CFR>12 CFR Part 740</CFR> <RIN>RIN 3133-AF75</RIN> <SUBJECT>Accuracy of Advertising and Notice of Insured Status</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> National Credit Union Administration (NCUA). <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The NCUA Board (Board) is issuing this proposed rule to streamline its regulations governing advertising and the notice of insured status. This proposed rule would eliminate provisions concerning the official advertising statement. This action is undertaken to reduce regulatory complexity, and the intended effect is to reduce the administrative burden and costs for federally insured credit unions (FICUs) and provide them with greater flexibility in their advertising activities. The proposed rule would not amend requirements related to displaying the official sign. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received by February 27, 2026. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Comments may be submitted in one of the following ways. (Please send comments by one method only): • <E T="03">Federal eRulemaking Portal: https://www.regulations.gov.</E> The docket number for this proposed rule is NCUA-2025-1436. Follow the “Submit a comment” instructions. If you are reading this document on <E T="03">federalregister.gov,</E> you may use the green “SUBMIT A PUBLIC COMMENT” button beneath this rulemaking's title to submit a comment to the <E T="03">regulations.gov</E> docket. A plain language summary of the proposed rule is also available on the docket website. • <E T="03">Mail:</E> Address to Melane Conyers-Ausbrooks, Secretary of the Board, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428. • <E T="03">Hand Delivery/Courier:</E> Same as mailing address. Mailed and hand-delivered comments must be received by the close of the comment period. <E T="03">Public inspection:</E> Please follow the search instructions on <E T="03">https://www.regulations.gov</E> to view the public comments. Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments are public records; they are publicly displayed exactly as received, and will not be deleted, modified, or redacted. Comments may be submitted anonymously. If you are unable to access public comments on the internet, you may contact the NCUA for alternative access by calling (703) 518-6540 or emailing <E T="03">OGCMail@ncua.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Rachel Ackmann, Senior Attorney, Office of General Counsel, at (703) 518-6540 or at 1775 Duke Street, Alexandria, VA 22314. </FURINF> <SUPLINF> <HD SOURCE="HED"> SUPPLEMENTARY INFORMATION: </HD> <HD SOURCE="HD1">I. Introduction</HD> <HD SOURCE="HD2">A. Background</HD> The Board comprehensively revised and streamlined part 740 in a 2003 final rule. <SU>1</SU> <FTREF/> The primary purpose of the 2003 revision was to modernize the regulation for clarity, address the growing use of the internet for member transactions, and clarify the use of trade names in advertising. The NCUA's goal was to ensure members were adequately informed of their federal share insurance coverage while imposing a minimal regulatory burden. <FTNT> <SU>1</SU>  68 FR 23382 (May 2, 2003). </FTNT> Over the subsequent years, the NCUA amended these regulations several times. In the 2006 final rule, the NCUA revised the official sign to reflect statutory changes from the Federal Deposit Insurance Reform Act of 2005, which included adding a statement that insured accounts are backed by the full faith and credit of the United States Government. A subsequent 2008 final rule provided credit unions with additional flexibility by permitting the use of a shortened advertising statement, “Federally insured by NCUA,” or the official sign itself in advertisements. <SU>2</SU> <FTREF/> In a 2011 final rule, the Board made the advertising rules more stringent. <SU>3</SU> <FTREF/> This amendment, among other changes, reduced the time exemption for radio and television advertisements from 30 seconds to 15 seconds. It also introduced the requirement to include the official advertising statement in annual reports and statements of condition, clarified that the statement's font size in print must be no smaller than the smallest font used for other consumer information, and defined the term “advertisement” for the first time. <FTNT> <SU>2</SU>  73 FR 56936 (Oct. 1, 2008). </FTNT> <FTNT> <SU>3</SU>  76 FR 30523 (May 26, 2011). </FTNT> However, in a 2018 final rule, the NCUA reversed the 2011 change to the broadcast advertisement exemption to provide regulatory relief and restore parity with regulations for banks insured by the Federal Deposit Insurance Corporation. <SU>4</SU> <FTREF/> The 2018 rule expanded the radio and television exemption back to 30 seconds and introduced a shorter advertising statement option: “Insured by NCUA.” Most recently, a 2020 final rule made technical corrections to improve clarity. <SU>5</SU> <FTREF/> <FTNT> <SU>4</SU>  83 FR 17913 (Apr. 25, 2018). </FTNT> <FTNT> <SU>5</SU>  85 FR 62213 (Oct. 2, 2020). </FTNT> <HD SOURCE="HD2">B. Legal Authority</HD> Section 205(a) of the Federal Credit Union Act (FCU Act) (12 U.S.C. 1785(a)) requires each FICU to display a sign relating to the insurance of its share accounts. <SU>6</SU> <FTREF/> The NCUA implements this requirement in part 740 of its rules (part 740). <SU>7</SU> <FTREF/> Part 740 also requires that each FICU include an official advertising statement related to share insurance in all advertisements. <SU>8</SU> <FTREF/> This requirement originated from a historic statutory provision in section 1785(a). Before 2005, section 1785(a) required every FICU to include a statement in all advertisements reiterating that its member accounts are insured by the Board. Section 1785(a) also provided that the Board may exempt advertisements from this requirement if the advertisements do not relate to member accounts or when it is impractical to include such a statement. <FTNT> <SU>6</SU>  12 U.S.C. 1785(a). </FTNT> <FTNT> <SU>7</SU>  12 CFR pt. 740. </FTNT> <FTNT> <SU>8</SU>  12 CFR 740.5. </FTNT> The 2005 statutory amendment retained the requirement for FICUs to post official signs but removed the requirement to include official advertising statements. The NCUA issued a final rule implementing changes associated with the 2005 statutory amendments in 2006 (2006 final rule) but did not remove the portions of part 740 that implemented the historical requirement to include an official advertising statement. <SU>9</SU> <FTREF/> Part 740 currently includes both the requirements for an official sign and advertising statement. <SU>10</SU> <FTREF/> <FTNT> <SU>9</SU>  71 FR 36719 (2006). The Board notes that the FCU Act grants the NCUA a broad mandate to issue regulations governing both federal and state-chartered credit unions. Section 120 of the FCU Act is a general grant of regulatory authority, and it authorizes the Board to prescribe rules and regulations for the administration of the FCU Act. 12 U.S.C. 1766(a). Section 209 of the FCU Act is a plenary grant of regulatory authority to the NCUA to issue rules and regulations necessary or appropriate to carry out its role as share insurer for all FICUs. 12 U.S.C. 1789. Additionally, Section 204 of the FCU Act authorizes the Board, through its examiners, “to examine any [FICU] . . . to determine the condition of any such credit union for insurance purposes.” 12 U.S.C. 1784. </FTNT> <FTNT> <SU>10</SU>  The NCUA has updated part 740 several times since 2006 but has not discussed the change in statutory authority, and it does not appear commenters have raised concerns either. <E T="03">See,</E> 73 FR 56935 (Oct. 1, 2008); 76 FR 30521 (May 26, 2011), and 83 FR 17910 (Apr. 25, 2018). </FTNT> <HD SOURCE="HD1">II. Proposed Rule</HD> This proposed rule would amend two sections within part 740 and is intended to promote regulatory efficiency and reduce unnecessary burdens on FICUs. This proposed rule would remove § 740.5 related to the official advertising statement and revise § 740.0 to remove references to the official advertising statement. This action is intended to provide FICUs with greater flexibility in their advertising activities while ensuring that members continue to receive clear and accurate information about their share insurance coverage through other required disclosures. Section 740.5 establishes the specific requirements for the official advertising statement. It mandates that FICUs include one of three prescribed official statements or an alternative, namely—“This credit union is federally insured by the National Credit Union Administration,” “Federally insured by NCUA,” “Insured by NCUA,” or a reproduction of the official sign—in all advertisements, unless specifically exempted. The regulation requires the statement to be clearly legible and with a font that is no smaller than the smallest font used for other consumer information in the advertisement. Section 740.5 also details numerous exemptions, specifying that the official statement is not required for certain items such as stationery, checks, signs within a credit union's office, directory listings, radio and television advertisements of 30 seconds or less, promotional items where inclusion is impractical, and advertisements that do not relate to member accounts, such as those for loans or safe deposit box services. The Board is proposing to eliminate § 740.5 because the section imposes an unnecessary and undue compliance burden o ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━