ABA Banking Journal - December 2013 - (Page 33)

ABA COMPLIANCE CENTER | inbox Promoting expanded services can still trigger CAN SPAM Q. We are rolling out a new mobile banking service to existing customers. We want to email our mobile banking brochure to any customer for whom we have an email address. Mobile banking is an enhancement to our online banking module, but the customers receiving the email notification may or may not already be enrolled in our online banking service. Would such an email need to comply with CAN SPAM rules? A. Based on our understanding, these proposed e-mails do come under CAN SPAM rules. CAN SPAM (Controlling the Assault of NonSolicited Pornography And Marketing Act) covers all commercial messages. The law defines those as "any electronic mail message the primary purpose of which is the commercial advertisement or promotion of a commercial product or service." The law does not distinguish An emailing to promote mobile banking likely comes under the CAn SPAM Act, even though some recipients already have other business with the bank. between a product enhancement versus a new product altogether. What matters is the "primary purpose" of the message. To determine the primary purpose, remember that an e-mail can contain either commercial content-which advertises or promotes a commercial product or service-or transactional or relationship content-which addresses an already agreed-upon transaction or updates a customer about an ongoing transaction. If you were e-mailing your online banking customers to let them know that transactions would be processed in two days instead of five, that is an email about an already agreed upon transaction. We would argue that your existing customers have not signed up for mobile banking-they have signed up for online banking. Mobile banking is a new product or service-for everyone-particularly for those who have not enrolled in online banking at all. We do not believe you can consider your new mobile banking product as an "already agreed upon transaction." (Response provided October 2013.) Clarifying "mixed-use" in HMDA definitions Q. We have a loan for the purpose of purchasing a commercial property that contains two buildings on one lot-a commercial building and a residence. When reporting for Home Mortgage Disclosure Act purposes, does the mixed-use test apply to: the property as a whole, considering the use of each building within the property? Or to each structure individually? A. The HMDA Commentary specifically applies the term "mixed-use property," so arguably it applies to the entire property and not any particular building. As such, it would not matter whether there was one building or multiple buildings involved. The key to remaining in compliance is to determine the primary use of the property as a whole. (Response provided October 2013.) Must national banks hold stock in the Federal Reserve? Q. We're a national bank. Regulation I, "Federal Reserve Bank Stock Requirements" states: "This part applies to member banks of the Federal Reserve System, to national banks in process of organization, and to state banks applying for membership. National banks and locally-incorporated banks located in United States dependencies and possessions are eligible (with the consent of the Board) but not required to apply for membership under section 19(h) of the Federal Reserve Act, 12 U.S.C. 466. " Does this mean that as a national bank we are not required to hold FRB stock? I understand that we can apply to the Federal Reserve in our district if we would like to be a member bank, but am trying to first confirm whether or not it is a requirement. A.Your bank is required to hold FRB stock. Banks chartered by the federal government (through the Office of the Comptroller of the Currency in the Treasury Department) are national banks; by law, they are members of the Federal Reserve System. Member banks must subscribe to stock in their regional Federal Reserve Bank in an amount equal to 6% of their capital and surplus, half of which must be paid in, while the other half is subject to call by the Board of Governors. The holding of this stock, however, does not carry with it the control and financial interest conveyed to holders of common stock in for-profit organizations. It is merely a legal obligation of Federal Reserve membership, and stock may not be sold nor pledged. Member banks receive a 6% dividend annually on their stock, as specified by law, and vote for the Class A and December 2013 | ABA BANKING JOURNAL | 33

Table of Contents for the Digital Edition of ABA Banking Journal - December 2013

Chairman's View
Editor's Column
Bank Notes
Picture This
Is wealth management a good fit?
Tech Topic
What's Ahead?
New diversity standards cover workplace and suppliers
Compliance Inbox
ABA At Your Service
Legal Issues
First Person

ABA Banking Journal - December 2013

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