Are you developing a social media policy?

April 22, 2013 at 7:36 am Leave a comment

imagesWe’ve all heard about social media and most credit unions have tried to integrate it into their business plans. But what exactly are the regulatory requirements and how does a credit union manage the compliance, legal, operational and regulatory risks unique to technology such as Facebook and Twitter while complying with regulations promulgated long before Al Gore convinced himself that he invented the Internet?

Those are the implicit questions posed by a proposed guidance issued by the FFIEC — the council of the major financial industry regulators including the NCUA — on a proposal establishing baseline requirements for financial institutions relating to the use of social media. In a nutshell, the guidance, if it is formalized in its proposed form, mandates that credit unions have policies and procedures in place regulating the use of social media that are commensurate with the credit union’s size and use of interactive technology such as Facebook and Twitter.

At first blush the guidance is so broad as to be of little utility to credit unions in their day-to-day operations. You don’t have to be a compliance maven to realize that virtually every major fair lending law applies to communications made over the Internet to the same extent as an advertisement placed in your local newspaper. But I slept on this one and by the light of day — albeit an extremely cold day for the late-middle of April — I realize it’s important for credit unions irrespective of their size to start developing ways to systematically evaluate social media policy and its impact on them.

Social media has the potential of impacting virtually every aspect of your credit union’s management ranging from labor issues (can I discipline an employee for what she posted on her Facebook page?) to third party due diligence (the company says it can cheaply provide an up-to-date homepage but has only been around for a year, can a credit union expect it to get the job done?). The answer to these and other questions will, of course, be unique to each credit union and if your regulator starts insisting on a one-size fits all approach to these and other issues, please give me a call. But if the end result of this proposal is a requirement that gets all credit unions to systematically evaluate their social media offerings, then that’s a guidance worth having.

Entry filed under: Compliance, General, Regulatory. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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