The Federal Financial Institutions Examination Council (FFIEC), an interagency body of regulators, issued a notice seeking input about lumping the way banks use social media into other consumer protections.
The suggested guidelines, called “Social Media: Consumer Compliance Risk Management Guidance,” are intended to help mitigate risk in a number of areas surrounding the use of Twitter, Facebook, Google Plus, LinkedIn and Yelp.
Covered financial institutions include banks, savings institutions, credit unions and non-bank entities (such as payday lenders) that are supervised by the Consumer Financial Protection Bureau (CFPB).
The comment period for input ends in less than 30 days, on March 25. So far, the proposal has received 38 comments, mostly from small community banks and lenders who are highly critical of the measures.
As cyber security and hacking become a larger issue for Internet users, the purpose of the guidance is to protect the companies as well – who may be subject to “phishing,” or the fraudulent use of a financial institution’s brand to scam consumers.
The 31-page proposal outlines several considerations for the industry, including making them responsible and accountable to “regularly” monitor social media sites for users who post sensitive information – such as personal account numbers – even if their sites are run by a third party.
The FFIEC is composed of the Office of the Comptroller of the Currency; the Federal Reserve, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the CFPB and the State Liaison Committee (SLC).
The SLC would be tasked with encouraging individual states to adopt the guidelines to improve customer and industry safety.