Sometimes mortgage lenders don’t advertise specific products and services, and sometimes they do. Name recognition and visibility are good reasons to use ‘generic’ advertising for a mortgage lender.
Your institution may be a commercial bank or a nonbank mortgage lender, so, consider these things that may be applicable to it for a general-purpose advertisement in which no specific product information is provided, including terms, conditions, rates, or other information.
Equal Credit Opportunity or Equal Housing Logotype, Statement, or Slogan – All advertising of residential real estate for sale, rent, or financing should contain an equal housing opportunity logotype, statement, or slogan. Specific terms or conditions of the covered product are not necessary to trigger the disclosure. The choice of logotype, statement, or slogan will depend on the type of media used (visual or auditory) and, in print advertising, on the size of the advertisement. HUD guidance suggests use of the logotype, statement, or slogan and the size of the logotype, statement, and slogan.
The “Person”-a-lities Portrayed – With respect to the actors in an advertisement, HUD guidance on use of human models encourages creditors to ensure they “reasonably represent[ing] majority and minority groups in the metropolitan area, both sexes, and, when appropriate, families with children. Models, if used, should portray persons in an equal social setting and indicate to the general public that the housing is open to all without regard to race, color, religion, sex, handicap, familial status, or national origin, and is not for the exclusive use of one such group.”
Regulation N – Mortgage Acts and Practices – Advertising prohibits certain material representations in any commercial communication about any term of a mortgage credit product, like those described in the Alphabet Soup. If no specific product information or terms/conditions are presented, it is unlikely additional disclosures are required. Review the statements of your “actors” to ensure none of the statements align with the prohibitions of Regulation N.
Regulation Z – Truth in Lending Act, Sections 1026.16 (open-end credit) and 1026.24 (closed-end credit), apply to advertising requirements for loan products. Some terms and conditions, when disclosed in advertisements, trigger additional terms and conditions. Again, if no terms or conditions are disclosed, it is unlikely additional disclosures are needed.
Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) Act – The coverage of UDAAP is broad. Ensure any information contained in advertising would not be considered unfair, deceptive, or abusive, based on the standards of UDAAP, as described in the CFPB Supervision and Examination Manual.
FDIC Statement of Membership – For depository institutions only, the Federal Deposit Insurance Corporation (FDIC) describes the official sign and statement of the FDIC and prescribes its use by insured depository institutions at locations where deposits are taken and in in all advertisements that either promote deposit products and services or promote non-specific banking products and services offered by the institution.
There may also be advertising requirements from a state banking or licensing authority that apply to generic mortgage lender-related promotions. As with all advertising, generic advertising should undergo a business and compliance review before its use.
Around the Industry:
FDIC offers free webinars on regulatory insights.
FFIEC releases final revisions to Uniform Interagency Consumer Compliance Rating System.
CFPB issues report on Servicemember complaints.
On the Horizon:
What will the new Executive Branch Administration mean for mortgage lending?
What regulatory issues are related to co-marketing among real estate professionals? Find out here.