Quick Overview of Social Media Regulations for Banks

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On January 22, 2013, the Federal Financial Institutions Examination Council (FFIEC) released a proposed Social Media: Consumer Compliance Risk Management Guidance (see http://www.ffiec.gov/press/pr012213.htm for details) for banks, savings associations, non-banks, and credit unions. Upon approval, financial institutions who have adopted social media and those who have not will be expected to use the guidance to mitigate risks posed by social media activities.

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Quick Overview of Social Media Regulations for Banks

  1. 1. Quick Overview of Social Media Regulations for BanksProposed Guidance Summary of Federal Financial Institution Economic Council(FFIEC) Social Media Compliance Risk Management ProgramStrategy & Governance A governance structure with clear roles and responsibilities whereby the board ofdirectors and/or senior management communicate how usage of social mediacontributes to the strategic goals of the institution, while also deciding on internalcontrols and how ongoing social media risks will be assessed.Policies & Procedures Implement policies regarding the use and monitoring of social media, and compliancewith all applicable consumer protection laws. Social media policies should incorporateprocedures addressing risks from online postings, edits and replies.Vendor Management Manage third-party social media vendors within defined parameters to ensurecompliance with all regulations, customer privacy, and security of their financial data.Training Establish an employee training program that incorporates the institution’s policies andprocedures for official, work-related use of social media, and potentially for other usesof social media, including defining impermissible activities.Monitoring Establish an oversight process for monitoring information posted to social media sitesadministered by the financial institution or a contracted third party.Compliance Audit and compliance functions to ensure ongoing compliance with internal policiesand all applicable laws, regulations, and guidance.Reporting Generate regular reports to the financial institution’s board of directors and/or seniormanagement, “enabling a periodic evaluation of the effectiveness of the social mediaprogram and whether the program is achieving its stated objectives.”COPYRIGHT © 2013 - CHAMELEON CONSULTING, LLC - WWW.CHAMELEONCONSULTINGLLC.COM - ALL RIGHT RESERVED

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