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March 12, 2013    

 


Social Media Compliance: Frequently Asked Questions


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Greetings! 

Last month, I discussed some of the salient compliance requirements associated with using Social Media.* Then, a few days later, I offered to you my article, entitled Social Media and Networking Compliance. This month, on March 6th, I was one of three presenters who gave a webinar for American Banker on Social Media, with special reference to the new rules of the Federal Financial Institutions Examination Council (FFIEC). The proposed rule, issued January 23rd, is entitled Social Media: Consumer Compliance Risk Management Guidance.

My webinar topic: Social Media - Employee Manual.

The webinar was very well attended by a diverse cross-section of financial institutions. I found it quite interesting that, when polled during the webinar, by a factor of two to one these companies did not have an Employee Manual, even if about a third of them have policies and procedures relating to Social Media.

I have harped on a certain point regarding policy statements, so here it goes again: policies and procedures are a rather abstract concept to employees; employee manuals, however, for certain rules and regulations, are the most effective means to ensure compliance. Training is an important and an ancillary tool, but employees do not always mentally retain training information. Keep this in mind: an employee manual is a constant reminder of a company's expectations and policies.

One aspect of social media that deserves considerable attention is trolling, using anonymity, and general blogging guidelines. Everybody knows that, for the most part, blogging is electronically available to the public. However, with regard to an individual's employment with a financial institution, what restrictions should be placed on an employee who blogs? From my own research and experience, it would seem that many employees actually have no idea of the implications, requirements, and, in some cases, the potential to easily cross over into violations of federal law or state law.

Here are the risks at stake in social media networking and blogging - though by no means less so for forms of advertising through and use of social media: financial risk, regulatory risk, sales risk, reputation risk, legal risk, strategic risk, and operational risk, such as adverse consequences to business plans, projects, Internet Technology and Information Security protections, and many core departmental functions.

In this article, I will offer a high level FAQs about the use of Social Media (SM), with some additional emphasis on blogging. I will also provide bulleted guidelines to give to employees.

Best wishes!
Jonathan Foxx
President & Managing Director
Lenders Compliance Group
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IN THIS ARTICLE

  • What is Social Media?
  • Do companies use Social Media?
  • Does SM cover micro-blogging?
  • How do some financial institutions use SM?
  • How to manage Social Media risks?
  • What are some laws and rules affecting Social Media?
  • What are some major risk areas?
  • May an employee troll or blog anonymously?
  • Are there restrictions to what may be posted?
  • What are some bulleted guidelines to follow?
  • Should errors be corrected?
  • Should an employee leave comments?
  • How to respond to negative comments?
  • May a professional reference be posted?
  • Can trolling and anonymity be traced?
  • What are bulleted guidelines to give to an employee?
  • Summation 
 
 
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Social Media: Consumer Compliance Risk Management Guidance
 
Notice - Request for Comment,

Federal Register 78/15 (1/23/13)

FFIEC
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