Banks going on-line can avoid regulatory trouble if they require compliance officers to review materials before they are posted on the World Wide Web, industry officials said.
Compliance experts said Internet listings are subject to all disclosure regulations, including Truth-in-Lending, Truth-in-Savings, and the Equal Credit Opportunity Act.
"You have to make sure that the compliance officer reviews all the text to make sure that everything is there that has to be there," said W. Kathleen Weise, executive director of compliance at Barnett Banks Inc., Jacksonville, Fla.
Despite the plethora of rules that governs bank Internet sites, most banks leave their compliance employees out of the planning process. That's a big mistake, bankers said.
"It's a critical issue," said C.R. Carder 4th, vice president in charge of compliance at Citizens Savings Bank, Gaithersburg, Md. "You can delegate the process of creating the page, but ultimately the bank retains the liability for all of the compliance issues."
Compliance officers must review all promotional material before it is sent to the consultant hired to create the home page, Ms. Weise said.
They also should review the consultant's work before it becomes available to the public, according to Richard Insley, compliance officer at Signet Bank, Richmond, Va. Home page experts often know little about banking and are apt to omit a key disclosure, he said.
The compliance experts note that this is becoming an industrywide concern. Nearly 550 banks operate home pages, and another 1,500 are expected to be on-line by yearend.
Regulators have released no rules specifically for Web pages. But broadcast and print advertising rules generally are thought to apply, according to Paul Terry, a lawyer in the Washington firm of Winthrop, Stimson, Putnam & Roberts.
For example, if a bank is offering securities, it must give the three required disclosures - that the securities are not federally insured, not guaranteed by the bank, and may result in a loss of principal - within the Web site.
Signet's Mr. Insley said a tour of Web pages finds mistakes or missing items are fairly common. "It's easy to see who didn't think to invite the compliance officer to the meetings," he said.
