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UDAAP and New England State Counterparts: A Primer for Marketing Professionals in Banking

Posted By By Matthew P. Coletti, Esq. MBA, Friday, December 20, 2013
Updated: Thursday, January 30, 2014

Is obtaining a competitive advantage or meeting revenue goals an achievement if done at your consumers’ expense through utilizing questionable practices?Most banking institutions are not intentionally unscrupulous, but rather unaware of the extent of their exposure to UDAAP risk through seemingly benign channels. This may be true because business units do not communicate, standards are too subjective, or consumer behavior is too unpredictable. Regardless, Marketing professionals, together with Compliance and Legal professionals, can effectively mitigate risk by monitoring industry trends, setting standards by which to measure internal processes and practices, then building compliance programs to control for conduct and monitor compliance.

To effectively capture UDAAP risk, a marketing compliance program should include controls for preventing, identifying and remedying perceived or actual "abusive” practices as set forth within the Dodd Frank Act (See 12 USC § 5531(d)(1) and (2) and 5536). "Abusive” practices are those which, in sum: (1) materially interfere with a consumer’s ability to understand a product or service’s terms or conditions, or (2) take unreasonable advantage of a lack of understanding of the consumer, an inability of the consumer to protect his or her interests, or a consumer’s reasonable reliance on another acting in their interest. The subjectivity of this standard presents as a challenge, particularly in light of minimal administrative guidance. For this reason, oversight is essential.

"Think in terms of protecting the least sophisticated consumer from the perspective of the most sophisticated plaintiffs’ consumer protection attorney."

In marketing campaigns, emphasis should be placed on clarity, transparency, and consumer interest while eschewing small print and inconspicuous language. Word choice and physical arrangement is critical to achieve accurate representation of product specifications. Avoid overly suggestive or vague trigger words, such as "free,” "no cost” or "rates as low as.” Heightened scrutiny should also extend to: (1) those vulnerable classes of persons, such as the elderly or military borrowers; (2) fee or income generating products or services, particularly overdraft programs and supplemental credit card products; and (3) third party vendor conduct. Before publishing or distributing any campaign materials, have them reviewed by Compliance or Legal professionals against a checklist for UDAAP and other related regulations. Be sure to retain documentation of any reviews conducted. Further, the complexity of this analysis is amplified when marketing materials are introduced into the interactive communication environment of social media.

Moreover, when reviewing items internally under UDAAP analysis,think in terms of protecting the least sophisticated consumer from the perspective of the most sophisticated plaintiffs’ consumer protection attorney. This is especially important where nearly all state UDAAP-type statutes permit a private cause of action as a consumer remedy, unlike the federal UDAAP models. Often, state statutes are more encompassing than UDAAP which compounds the need for hyper-vigilance. Otherwise, remedies under UDAAP are more likely to come in the form of civil money penalties or restitution to consumers. Locally, Maine, Vermont and New Hampshire have relatively stringent monetary penalties under statute whereas Rhode Island is the only state to have none.

Finally, some other sources of authority to build awareness include: Section 5 of the FTC Act; Regulation AA; MAP Rule, state statutes and regulations, such as Conn. Gen. Stat. 42-110a et seq., Mass. Gen. Laws c. 93A and 209 CMR 32.00 et seq., and current case law relating to each. Most recently, the FFIEC issued valuable guidance relating to social media usage. Ultimately, those institutions with a culture of awareness emphasizing positive customer experience will achieve a competitive advantage.

Tags:  compliance  UDAAP 

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Just who (or what) is Simon Pearce?

Posted By NEFMA, Wednesday, December 18, 2013

Simon Pearce is a highly talented entrepreneur and master craftsman of glassblowing and pottery. An Irish-American, he learned his craft in Kilkenny Ireland and opened his first US factory in Quechee, Vermont in 1981. The facility, powered by hydroelectricity on the Ottauquechee River, also includes a showroom, fabulous restaurant and glass-blowing demonstrations.

Simon Pearce glass is highly collectible and coveted among those who appreciate fine craftsmanship. His works have been gifted to foreign dignitaries and presenters of the Academy Awards.

Lucky for us he chose New England to start his business and our Winter Conference is being held right around the corner–how convenient!

Take a tour at Simon Pearce on Thursday, January 23 from 1:00 to 2:00 p.m. and join us later in the evening to hear our guest speaker, Clay Adams, CEO of Simon Pearce.

Want to learn a little more? Check out this video by Vermont Spotlight.

Tags:  conference 

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Bank & Credit Union Marketing Budgets

Posted By NEFMA, Monday, November 25, 2013

From The Financial Brand

What budgetary challenges do your institution face heading into 2014? The Financial Brand shares the findings from an early September budgeting survey of 80 financial institutions. The results reveal concerns about reaching growth goals, measuring ROI and the problems with how yearly budgets are set. Also included is a simple guideline to help determine the appropriate marketing investment based on an institution’s asset size.

Click here to find out more

Tags:  budgeting 

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Tips for Making the Most of Your Media Sales Meetings

Posted By Debbie Auger, Sean Tracey Associates, Sunday, September 15, 2013
Updated: Tuesday, November 19, 2013

Don’t Let Who Takes You to Lunch, Take You To the Cleaners:

Are you sometimes lured in by Über-friendly sales reps offering lunch meetings at your favorite spot? Like most you’re probably thinking, what’s the harm? You probably should go and listen to hear if what they’re offering makes sense for your bank or credit union. However, before the dessert list is presented, you’ve found yourself committing to a buy before you’ve had a chance to weigh it against your overall marketing goals or objectives. You may not realize it until it’s too late.

Most media sales reps are in the business for one reason – to get you to buy what they’re selling. They show you ratings, research and packages that validate why their station, magazine, etc. is the absolute best way to get your phone ringing off the hook. The bottom line is that their goal is not to sell your products and services, but to sell theirs to you.

The intricate collaborative partnership between client and media partners must begin with an articulated set of objectives and goals. Whether you plan your own media, or use an agency, offering insight and guidance is essential to making the most of your media dollars.

7 Important Things to Share with your Media Planner/Sales Reps:

  • Market Conditions-Why are you doing it? Research and evaluate insights about the designated market area, competition, sources of business, etc.
  • Target Audience-Who is the primary prospect you are speaking to? (by the way, Adults 18+ isn’t an answer)
  • Campaign Goals/Desired Response- What action do you want the consumer/prospect to take? What are realistic and measurable goals?
  • Key Benefits-What is the one incentive that will create your desired response? Consumers will always be thinking, ‘What’s in it for me?’
  • Support of Benefits -Prove it. What are ideas and facts that fulfill the incentives you have promised?
  • Creative Concept-Telling your story creatively will allow your media partners to properly place your messages where and when they will have the most impact.
  • Timeline-Identifying specific dates is critical to precision execution of strategy. Current events relevant to the designated market area, plays an important role in discovering the right media sources and staying within budget constraints. Political campaigns, wildly exciting sporting events, the holidays impact rates and inventory.

If you’re disorganized, or unable to clearly outline goals and budget then you’re more vulnerable to making poor media investments. After compiling and sharing this critical information, request that media partners do their own research: visit your client’s website, Facebook page, and even pop into a branch. Have them familiarize themselves with your financial institution’s mission statements, products and services and the what your organization is doing in the community. By getting to know the brand, they can make the best possible recommendations for media opportunities that are in alignment.

Leisurely lunches and free theater tickets are great perks, but shouldn’t be part of your media strategy. They may make you feel beholden to these media partners even if they don’t speak to your target audience.

So go ahead, take the lunch meetings, but if your rep shows up and doesn’t know how to pronounce the name of your bank or credit union, there’s a good chance that whatever their selling isn’t for you. It’s okay to lunch and learn, but remember- dine, don’t sign.

Tags:  media  media buying 

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NEFMA Member Spotlight: Ross Silva

Posted By NEFMA, Saturday, September 14, 2013
Updated: Wednesday, November 20, 2013

Name: Ross Silva

Title:Marketing Manager

Financial Institution/Company:Navigant Credit Union

What I like best about my job:Working in the community. Type A personality constantly stuck behind a desk would not work out too well.

First job out of school:Marketing Coordinator at Credit Union Central Falls (now Navigant Credit Union).

The biggest challenge my company is facing in the coming year: Continuing the Credit Union’s core conversion. The project will take place throughout 2013 and it takes up a lot of resources.

If I had an unlimited budget this is how I would spend it: More TV advertising!

Marketing campaign I wish I had done:The Credit Union’s tagline is "Enjoy Life’s Journey.” I really wanted to give away a Dodge Journey lease in conjunction with a new branch opening. It wasn’t approved.

Why I joined NEFMA:I was looking for an alternative to other national organizations I had been uninvolved in.

Number of years as NEFMA member:4

What I like best about NEFMA:The locality and relevancy of the conferences and of course all the great people I’ve come to know.

When I'm not at work you can find me:Doing the daddy thing or golfing.

My favorite book I have read in the past year:I am more of a beach and magazine guy.

Tags:  spotlight 

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