How credit unions can safely leverage social media: A legal perspective
Credit unions face two critical realities when it comes to social media and online marketing. First, maintaining a robust, authentic, and evolving digital strategy is essential to engage members and build brand awareness. Credit unions that hesitate to reach members via social media, email, and online advertising will inevitably lose those opportunities to their competition.
Second, despite their marketing prowess, social media and online marketing are fraught with legal, regulatory, and reputational risks. Without proper oversight and a sound risk management program, credit unions can expose themselves and their members to serious legal pitfalls, data breaches, and irreparable reputation harm.
In this article, we met with social media lawyer for credit unions Ethan Wall, who shares the costly and common areas of legal and regulatory risk that credit unions face, and proactive solutions to maximize your marketing while ensuring your credit union remains both social and safe online.
Advertising and marketing compliance
Credit unions operate in a highly regulated industry subject to strict regulatory guidelines and stringent advertising laws. These regulations extend not only to every social media post, ad, and comment on your channel but also to innovative strategies such as social media sweepstakes, email marketing campaigns, and Google Paid Search Advertising. To make matters worse, intellectual property laws are often violated when content is shared or used without proper permissions.
Sitting on the sidelines in fear of tripping a regulatory wire won’t serve your mission, but neither is taking a “post first, ask question later” approach. Your credit union’s marketing and compliance teams need a practical and agreeable framework to engage members online without the fear of inadvertently violating these serious laws.
Employee and reputational risk
Employees are an integral part of our credit union family and a critical component to achieving a successful social media strategy. Encouraging online engagement with team members and fostering brand advocates who can share our content to their own audience positively impacts building an inclusive online community. However, employees often unknowingly trigger serious legal, privacy, and regulatory violations when they engage online without proper oversight.
In recent years, loan officers have used their personal LinkedIn profiles to highlight financial products or email prospects without proper disclosures or training. Well-intentioned advocates leave positive online reviews without clearly identifying their employment. Occasionally, a disgruntled employee will voice their displeasure on social media, complain about members’ private interactions, or engage in overly spirited social and political commentary that could negatively affect the credit union’s reputation in the community. Without proper guidelines, training, and oversight, well-intentioned employees’ online behavior can do more harm than good.
How credit unions can safely manage social media
Whether your credit union is active on Instagram, running Google Ads, or conducting online giveaways—there are countless pitfalls that can result in legal, regulatory, or reputational risks. Ethan says, “We’ve witnessed numerous social media and online marketing mistakes that could certainly be avoided by having a responsible infrastructure in place. This infrastructure should account for inevitable social media use by marketing and employees, providing sufficient guardrails for legal protection.” But how do you know what risks your credit union faces and whether you have the appropriate guardrails in place?
Start with a social media risk assessment
Think of the assessment as an informal audit of your credit union social media and online activities conducted by an experienced social media lawyer. While in-house lawyers know the credit union inside and out, they may be unfamiliar with the shifting landscape and unique complications that arise on social media. A social media attorney will perform an evaluation of the laws that apply to your specific social media use and online advertising campaigns, analyze your current level of legal risk and internal compliance, and suggest a practical roadmap that gets you back into compliance.
The process begins with a discussion involving all relevant stakeholders at the credit union, including those from human resources, compliance, and marketing, to understand and prioritize all the potential risks the credit union faces online. A legal team will then review your existing social media policies, procedures, and guidelines to assess your level of risk and prepare a social media risk management report and recommendations. This will provide a roadmap for achieving compliance through a social media risk management program that aligns with your marketing priorities while eliminating unacceptable risks.
Develop a social media risk management program
The Federal Financial Institution Examination Council (FFIEC) requires all credit unions that maintain a social media presence to maintain a risk management program that addresses their specific use of online marketing and advertising. According to the FFIEC, every credit union must maintain social media policies, guidelines, and training programs to mitigate legal and compliance risks arising out of official brand channels and employees’ own social media use. Here are a few key components every credit union must have:
- Social media policy: A well-crafted social media policy serves as a cornerstone for preventing social media misuse by employees. The policy should outline acceptable social media use, confidentiality requirements, guidelines for representing the credit union online, and consequences for violations. This senior management-approved policy should apply to all employees and be periodically updated to reflect changes in social media platforms and new regulatory requirements.
- Social media and digital ad guidelines: The most comprehensive part of your social media risk management program is up-to-date guidelines that cover the risks of all the different types of social media and online activities your credit union engages in, such as targeted advertising, online giveaways, Google Search Ads, reviews and testimonials, and advertising disclosures. For example, disclosure checklists with a table of contents for each different financial product will align your marketing and compliance teams on exactly what is required for each type of post.
- Social media training programs: Whether it’s training your employees on the do’s and don’ts of your Social Media Policy or training your marketing and compliance departments about how to comply with financial laws and regulations when sharing content on social media, training programs are required by the FFIEC. Conducting an online training program that can be recorded and viewed on demand will ensure that your credit union is being proactive rather than reactive to avoid potential pitfalls in the future.
Your social media policy, guidelines, and training will serve as the cornerstone for a safe social media presence. But where should you begin? Ethan shares this advice with credit union brand leaders:
“Every credit union faces some type of social media or online risk. The key is to identify your specific areas of risk and how to manage them based on your credit union’s goals and unique infrastructure. The best way to identify those risks and how to manage them is through a social media risk assessment.”
A risk assessment will serve as your credit union’s roadmap for achieving compliance and as the solid first step toward developing a risk management program tailored to your credit union’s needs. With this legal framework in place, your credit union can experience the peace of mind of being social and safe, knowing that online legal risks can be effectively managed.
Thank you to Ethan Wall, for sharing invaluable insights on social media law for credit unions. For more information on how a social media attorney can support your organization, click here.
