ARLINGTON, Va.-As credit union adoption of social media continues to explode, the question of what is appropriate for this medium continues to be a hot topic, and while CUs wait for regulators to weigh in, experts suggest they would be wise to follow existing guidelines for online content and ads.
NAFCU Director of Regulatory Compliance Anthony Demangone explained that social media, from a regulatory perspective, is essentially an advertisement and should be treated as such. "Because it is nothing special, it has to comply with all of the existing advertising requirements," he said. "If, for example, loan terms or rates are mentioned obviously that qualifies as an advertisement under lending regulations. The real risk is that the person who is in charge of the Twitter account or the Facebook account doesn't realize all of the compliance issues involved."
For its part, NCUA is keeping an open mind on what CUs can and cannot say in social media. Spokesperson John McKechnie confirmed that all advertisements must abide by the usual lending and insurance disclosures when applicable, but added that the regulator "has not determined whether statements in social media such as Facebook qualify as advertisements for purposes of regulatory compliance."
Two Schools Of Thought
Two major schools of thought pervade when it comes to social media; some institutions have called for an opening of the gates to allow all employees to use social media during both office and personal time, while others are far more cautious and either eschew the medium entirely or strictly regulate it in-house.
"There is kind of a fight between credit unions that want to limit it and those that want to open it up," consultant Jim Jerving observed.
"Because the compliance regulations have not kept pace with social media, I think CUs owe it to employees to create some kind of policies that provides guidance for social media," added Mickey Goldwasser, SVP of marketing at New Haven, Conn.-based Continuity Engine.
Goldwasser and Jerving agreed CUs need clear internal policies about not only who can use the medium as an official representative, but also what they can say. As an extension of a CU's web presence, any social media communication that advertises products, rates or even job openings are subject to traditional website disclosure regulations. Given the limitations of a tool like Twitter, Goldwasser advised CUs to keep ad regulations in mind when using social media, but shy away from actual advertising messages and instead keep it conversational.
Conversation Vs. Marketing
"People are using Facebook and Twitter to communicate when they might have used email or the phone just a year ago. Social media is conversation, it's not appropriate for marketing messages," Jerving added.
In addition to protecting potential members through disclosures, credit unions must also take care to abide by regulations to protect existing members and the institutions themselves when using social media. Goldwasser stressed the importance of having the "right employees" acting on behalf of the CU, and that all employees use common sense when using social media even in their personal lives. Phishing scams are ever present on these sites and CUs do not have much security control, so the utmost care must be taken to never pass sensitive or personal information through social media channels.
Something as basic as posting photos of members at a credit union event on a Facebook page without first securing permission from those members can lead to trouble. "You don't want to take the fun out of [social media], but the worst thing in the world would be to try and do something creative" and then find out that a regulation was broken, Demangone pointed out.
