C/A Commercials

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 of information:

Commercial content – which advertises or promotes a commercial product or service, including content on a website operated for a commercial purpose;

Transactional or relationship content – which facilitates an already agreed-upon transaction or updates a customer about an ongoing transaction; and

Other content – which is neither commercial nor transactional or relationship. https://www.ftc.gov/tips-advice/business-center/guidance/can-spam-act-compliance-guide-business


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.