Interagency Guidance Issued on Unfair or Deceptive Acts or Practices by State-Chartered Banks
March 12, 2004
Circular No. 11583

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

In a press release, the Federal Reserve Board and the Federal Deposit Insurance Corporation today issued guidance outlining standards they will apply to determine when acts or practices by state-chartered banks are unfair or deceptive. Such practices are illegal under section five of the Federal Trade Commission (FTC) Act.

The statement also provides guidance on steps that state-chartered banks can take to avoid engaging in unfair or deceptive acts or practices. The approach outlined in the statement is based on long-established standards used by the FTC to enforce section five of the FTC Act against non-bank entities.

Although the majority of insured banks adhere to a high level of professional conduct, banks must remain vigilant against possible unfair or deceptive acts or practices both to protect consumers and to minimize their own risks.

Press release OFFSITE
Interagency guidance OFFSITE PDF

Maryann Campbell
Supervising Examiner
Legal and Compliance Risk Department