Compliance Alliance Question of the Week
(CAN-SPAM): When sending unsolicited
emails to non-customers, for purposes of CAN-SPAM Act, can the “from” line
contain a loan officers name, instead of the entity sending the email; or must
the “from” line disclose both the sender individually and the organization?
The FTC guidance addressing CAN-SPAM Act requires
that the "From" portion of an email should be accurate and identify
the person(s) or business(es) who initiated the message. It does not
specifically require that the bank's name be in the from line if the person who
initiated the message, in this case, the loan officer, is clearly identified.
However, it would be a good practice and you are certainly not prohibited from
including the bank's name in the from line.
Reference: "Don’t use false or
misleading header information. Your “From,” “To,” “Reply-To,” and routing
information – including the originating domain name and email address – must be
accurate and identify the person or business who initiated the message." https://www.ftc.gov/tips-advice/business-center/guidance/can-spam-act-compliance-guide-business
If we send out an email to customers who use Interactive Teller
Machines (ITMs), letting them know the ITMs will be discontinued, would that
message be considered mixed or transactional?
The CAN-SPAM Act governs email communications. For the purposes of
the Act, conservatively, we would agree that your email would be considered a
mixed message. The language informing the discontinuance of the product could
be construed as a transaction itself, but the email also contains content
promoting existing services such as online banking and the mobile application.
That can be considered commercial content as it is promoting a product or
service. The Federal Trade Commission (FTC) provides the following guidance in
making the primary purpose determination under the Act.
What matters is the “primary purpose” of the message. To determine
the primary purpose, remember that an email can contain three different types
Commercial content – which advertises or promotes a commercial
product or service, including content on a website operated for a commercial
Transactional or relationship content – which facilitates an
already agreed-upon transaction or updates a customer about an ongoing
Other content – which is neither commercial nor transactional or
What if the message combines commercial content and transactional
or relationship content?
It’s common for email sent by businesses to mix commercial content
and transactional or relationship content. When an email contains both kinds of
content, the primary purpose of the message is the deciding factor. Here’s how
to make that determination: If a recipient reasonably interpreting the subject
line would likely conclude that the message contains an advertisement or
promotion for a commercial product or service or if the message’s transactional
or relationship content does not appear mainly at the beginning of the message,
the primary purpose of the message is commercial. So, when a message contains
both kinds of content – commercial and transactional or relationship – if the subject
line would lead the recipient to think it’s a commercial message, it’s a
commercial message for CAN-SPAM purposes. Similarly, if the bulk of the
transactional or relationship part of the message doesn’t appear at the
beginning, it’s a commercial message under the CAN-SPAM Act. https://www.ftc.gov/tips-advice/business-center/guidance/can-spam-act-compliance-guide-business
A borrower passed away, leaving
the property to her daughter. The borrower’s outstanding debt remains, and the
daughter applied for a loan to pay off the debt. With respect to HMDA
requirements, what type of loan is the daughter applying for?
This is an equity loan for HMDA purposes. HMDA, § 1003.2(j),
defines a “purchase loan,” in part, to mean, credit used, in whole or in part,
to purchase a dwelling. Additionally, § 1003.2(p), further defines a
“refinance” to mean an obligation replacing another obligation by the same borrower.
In this case, the interest in the home passes from the mother to the daughter
immediately upon the mother’s death. Therefore, the daughter cannot purchase
something that she already owns. Further, because the mother was the borrower
on the existing loan, the daughter cannot refinance such loan for HMDA
purposes, since the borrowers would not be the same. By exclusion, the HMDA
loan purpose here would be an equity loan.
A customer deposited a check
into a savings account, the funds from which were made available, and then
transferred the funds into a savings account. The savings account receives
social security benefits. The check is now being returned. Can the bank exercise
the right of setoff against the savings account?
This is a fine-line question
that has several moving parts. First, the bank potentially would be able
to offset against funds in the savings account to the extent those funds are
not protected under 31 CFR 212. This requires the bank to calculate the
“protected amount,” in accordance with that section, with any remainder being
available for setoff.
But when an account receives federally protected funds, like in
this scenario, whether the bank can exercise the right of setoff against those
funds as well has not been clearly established by courts or available
regulatory guidance. While some jurisdictions appear to permit this practice,
the law is not uniform. Therefore, unless the bank confirms the specific stance
on the issue with the bank’s jurisdiction or further clarification is obtained,
C/A advises not setting-off against federally protected funds.