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March 22, 2013

FFIEC urged to rethink social media guidance

March 25, 2013 – NAFCU Senior Regulatory Affairs Counsel Tessema Tefferi on Friday told regulators that their proposed guidance on financial institutions' use of social media would be confusing and urged instead that current rules be modified to work more effectively for varied forms of communication with consumers.

"Regulators . . . should recognize that social media differ from other modes of communication."
– NAFCU's Tessema Tefferi in a letter sent Friday to the FFIEC

"NAFCU appreciates the FFIEC's efforts in putting forth the proposed guidance," Tefferi wrote. However, he added, "NAFCU believes that regulators should take social media into account in their regulatory regime and recognize that social media differ from other modes of communication."

Tefferi said credit unions have fared well in safely adopting the use of social media, and they work to ensure their policies and procedures satisfy the need for oversight and controls to address attendant risks. But he said the current proposed guidance represents a one-size-fits-all approach that would make rules less clear, be costly to credit unions and yield no clear benefit.

He said social media should be addressed within the regulatory regime, and that regime needs to address the differences between social media and other modes of communication. Existing rules on advertising, for example, reflect no such distinction.

"We ask that the FFIEC agencies reconsider the issuance of the guidance," he wrote.


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