Industry officials urged the Federal Deposit Insurance Corp. to drop a 62-year-old requirement that bank advertisements include the phrase "member FDIC."
The policy is unnecessary and causes compliance headaches, bankers and trade group officials wrote in comment letters due Monday at the agency.
Consumers already know that deposits at banks and thrifts are backed by the federal government, wrote Robert R. Davis, director of government relations at America's Community Bankers.
"The original reason for requiring the use of the official advertising statement in various advertisements was to promote recognition of the FDIC as the federal deposit insuring agency," he said. "Today, customers recognize the unique status of banks and savings associations as FDIC- insured depositories."
Making the deposit insurance statement voluntary also would reduce the number of minor compliance violations, wrote Steven F. Rosenbaum, executive vice president of Prospect Federal Savings Bank in Worth, Ill.
"The more FDIC regulation is imposed, no matter how minute, the greater the potential liability exists for banks," Mr. Rosenbaum wrote.
Use of the "member FDIC" banner would not disappear if the policy became voluntary, said Paul A. Smith, senior counsel at the American Bankers Association. It attracts customers and helps identify which products are covered by deposit insurance, he said.
However, making the "member FDIC" statement voluntary was not universally endorsed. Karen Thomas, director of regulatory affairs at the Independent Bankers Association of America, said the public would quickly forget what the FDIC does.
"We think it's important to remind the public what deposit insurance is and what it covers," she said.
If the FDIC decides to retain the rule, some industry officials argued that Internet home pages should be exempted. Marcia Z. Sullivan, government relations director at the Consumer Bankers Association, said including the "member FDIC" statement on home pages is feasible. But she said it would establish a precedent for regulatory micromanagement of home pages that could return to haunt the industry.
"We believe that a general rule making the use of the official statement optional would be consistent with the goal of allowing technology to develop without interference," Ms. Sullivan said.
And Mr. Smith said the FDIC should not adopt specific rules for using its logo on ads for bank-sponsored mutual funds and other uninsured products. A 1994 interagency policy statement already prevents banks from using the "member FDIC" statement when advertising uninsured products, the ABA counsel pointed out.
The FDIC published its proposal in January. Action is expected this summer.
