FDIC ISSUES GUIDANCE ON UNFAIROR DECEPTIVE ACTS OR PRACTICES
The Federal Deposit Insurance Corporation recently confirmed its intention to cite state nonmember banks and their institution‑affiliated parties for violations of Section 5 of the Federal Trade Commission Act (declaring unfair or deceptive trade practices illegal) and to take appropriate action under Section 8 of the Federal Deposit Insurance Act upon discovery of unfair or deceptive trade practices. Additionally, the FDIC will coordinate with the FTC to address enforcement actions for such practices against nonbank entities.
In a related development, Chairman Alan Greenspan responded by letter dated May 30, 2002, to a request that the Federal Reserve Board consider issuing a rule to address the application to the banking industry of the FTCA’s prohibition against unfair or deceptive practices. Mr. Greenspan indicated that because the FRB believes that the FTCA’s general prohibition against such practices applies to banks as a matter of law, it is not necessary to issue a rule stating that conclusion. Additionally, the FRB believes that unfair or deceptive acts or practices are best determined based upon the specific facts of a particular circumstance, rather than upon a generalized rule.
If you would like a copy of the documents mentioned above or assistance in reviewing programs to ensure compliance with Section 5 of the FTCA, please contact Margaret Stolar at (614) 628‑1616 or [email protected].