Download Internal Audit Programs

Marketing Compliance Audit
INTRODUCTION
Before beginning this audit:
•
Obtain and review your bank’s policies, procedures, and marketing plans, including any required
approval for expenses and for new marketing campaigns.
•
Read the minutes to the bank’s marketing committee.
•
Review the budget and expense reports for marketing campaigns.
•
Interview marketing staff and other appropriate bank staff about their understanding of and
adherence to the bank’s marketing policy.
The following checklist should be modified to fit the specifics of your institution.
MARKETING AUDIT PROCEDURES
Yes, No
N/A
1. Have all marketing and advertising programs been
completed within the budget or allowable
variance?
2. Are the fees paid for marketing and advertising
programs and approved by the appropriate level of
management for items such as:
 Postage?
 Printing?
 Promotional items?
 Radio and television airtime?
3. Have all appropriate marketing and bank staff
members that are responsible for providing
customer information about marketing programs
received adequate training?
4. Is there an adequate review system in place for
Work Paper
Reference
Comments
advertisements and marketing campaigns (e.g.,
committee or senior management approval)?
5. Are prospective suppliers required to submit
competitive bids for any marketing or advertising
programs?
6. Are all giveaways or promotional
inventoried and properly secured?
items
7. Do marketing materials and advertisements
comply with applicable regulations? (See Deposit
Advertising Compliance Audit, Loan/Lease
Advertising Compliance Audit, and Branch
Signage and Disclosure Requirements Compliance
Audit.)
8. Do the bank’s advertisements accurately and fairly
represent all of its products and services? (See
Unfair, Deceptive, and Abusive Acts and Practices
(UDAAP) Policy and Procedures; Unfair,
Deceptive, and Abusive Acts and Practices
(UDAAP) Compliance Audit; Overdraft Privilege
Policy and Procedures — FDIC-Regulated Banks
and Thrifts; Overdraft Privilege Compliance Audit
— FDIC-Regulated Banks and Thrifts; Overdraft
Privilege Policy and Procedures — Non-FDICRegulated Banks and Thrifts; and Overdraft
Privilege Compliance Audit — Non-FDICRegulated Banks and Thrifts.)
9.
Does the bank specifically prohibit the following
deceptive or misleading marketing practices for
closed-end home loans (Regulation Z, 12 CFR
1026):
 Stating "fixed" rates or payments for loans
whose rates or payments can vary without
adequately disclosing that the interest rate or
payment amounts are "fixed" only for a
limited period of time, rather than for the full
term of the loan?
 Comparing an actual or hypothetical rate or
payment obligation to the rates or payments
that would apply if the consumer obtains the
advertised product, unless the advertisement
states the rates or payments that will apply
over the full term of the loan?
 Characterizing the products offered as
"government loan programs," "governmentsupported loans," or otherwise endorsed or
sponsored by a federal or state government
entity even though the advertised products are
not government-supported or -sponsored
loans?
 Using advertisements, such as solicitation
letters, that display the name of the consumer's
current mortgage lender, unless the
advertisement also prominently discloses that
the advertisement is from a mortgage lender
not affiliated with the consumer's current
lender?
 Claiming a debt elimination program if the
product advertised would merely replace one
debt obligation with another?
 Creating a false impression that the mortgage
broker or lender is a "counselor" for the
consumer?
 Using a foreign-language advertisement in
which certain information, such as a low
introductory "teaser" rate, is provided in a
foreign language, while other required
disclosures are provided only in English?
Affiliated Marketing Opt-Out Rules (12 CFR 1022,
Subpart C)
1. Does the financial institution receive consumer
eligibility information from an affiliate? If it does
not, do not continue the audit.
2. Does the financial institution use consumer
eligibility information received from an affiliate to
make a solicitation for marketing purposes that is
subject to the notice and opt-out requirements? If
it does not, stop here.
3. Are procedures in place to evaluate the bank's
policies, procedures, practices, and internal
controls to ensure that, where applicable, the
consumer is provided with an appropriate notice, a
reasonable opportunity, and a reasonable and
simple method to opt out of the bank's using
eligibility information to make solicitations for
marketing purposes to the consumer, and that the
bank is honoring the consumer's opt-outs?
4. If compliance risk management weaknesses or
other risks requiring further investigation are
noted, does the bank obtain and review a sample
of notices to ensure technical compliance, and a
sample of opt-out requests from consumers to
determine if the bank is honoring the opt-out
requests?
5. Are the opt-out notices clear, conspicuous, and
concise and contain the required information,
including the name of the affiliate(s) providing the
notice, a general description of the types of
eligibility information that may be used to make
solicitations to the consumer, and the duration of
the opt out?
6. Does the bank review opt-out notices that are
coordinated and consolidated with any other
notice or disclosure that is required under other
provisions of law for compliance with the affiliate
marketing regulation to determine whether the
opt-out notices and renewal notices provide the
consumer a reasonable opportunity to opt out and
a reasonable and simple method to opt out?
7. Are the opt-out notices and renewal notices
provided (by mail, delivery, or electronically) so
that consumers can reasonably be expected to
receive that actual notice?
8. After an opt-out period expires, does the bank
provide a consumer a renewal notice prior to
making solicitations based on eligibility
information received from an affiliate?
Marketing Private Education Loans
9. Does the bank refrain from using the name,
emblem, mascot, or logo of a covered educational
institution, or other words, pictures, or symbols
identified with a covered educational institution
(except in circumstances noted below) in the
marketing of private education loans in a way that
implies that the covered educational institution
endorses the creditor's loans?
10. If the bank mentions the name of a school in its
marketing material for private education loans,
does the bank also include a clear and conspicuous
disclosure that is equally prominent and closely
proximate to the reference to the school that the
school does not endorse the bank's loans and is not
affiliated with the bank?
11. If the bank enters into an arrangement with a
school where they have agreed to endorse the
bank's private education loans, does the bank
include in any marketing material a disclosure that
is equally prominent and close to the reference to
the school that states that the bank's loans are not
offered or made by the school but are made by the
bank?
Marketing Credit Cards to College Students
12. Does the bank refrain from offering college
students any tangible item to induce them to apply
for a credit card if the offer is made:
 On the campus of an institution of higher
education?
 Near (within 1000 ft) the campus of an
institution of higher education?
 At an event sponsored by or related to an
institution of higher education?
Note: Examples of tangible items are T-shirts, mugs,
and gift cards. The bank may offer reward points or
discounts which the regulation defines as "intangible"
items.
13. If, as a card issuer, the bank is party to one or
more college credit card agreements in effect at
any time during the year, does it register with the
Federal Reserve Board (Fed) and send an annual
report? (We must register with the Fed and send
an annual report.)
14. Does the annual report include the following:
 A copy of any college credit card agreement
to which the bank was a party that was in
effect at any time during the period covered
by the report?
 A copy of any memorandum of understanding
in effect at any time during the period covered
by the report between the bank and an
institution of higher education or affiliated
organization that directly or indirectly relates
to the college credit card agreement or that
controls or directs any obligations or
distribution of benefits between any such
entities?
 The total dollar amount of any payments
pursuant to a college credit card agreement
from the bank to an institution of higher
education or affiliated organization during the
period covered by the report, and how such
amounts are determined?
 The number of credit card accounts opened
pursuant to any college credit card agreement
during the period covered by the report?
 The total number of credit card accounts
opened pursuant to any such agreement that
were open at the end of the period covered by
the report?
15. Does the bank have procedures to ensure the
annual report for each calendar year is sent to the
Fed by the first business day on or after March 31
of the following year?