On January 22, 2013, the Federal Financial Institutions Examination Council proposed guidance on the applicability of consumer protection and compliance laws, regulations, and policies to activities conducted via social media by depository institutions. The proposed guidance would not impose additional compliance obligations on institutions. Instead, the guidance is intended to help financial institutions understand potential consumer compliance, legal, reputation, and operational risks associated with the use of social media, along with expectations for managing those risks.
The proposed guidance defines “social media” as “a form of interactive online communication in which users can generate and share content through text, images, audio, and/or video.” The FFIEC warns that social media can impact a depository institution’s risk profile by increasing the risk of harm to consumers, compliance and legal risk, operational risk, and reputational risk.