Overview:

The Federal Financial Institutions Examination Council (FFIEC) has released final guidance about social media for banks, savings associations, and credit unions related to consumer protection and compliance laws and regulations.

The guidance doesn’t include new requirements, but just helps financial institutions identify and understand their supervisory responsibilities related to compliance, legal, reputation and operational risks associated with social media.

Expectations for risk management of social media use include:

• A risk management program that allows the organization to identify, measure, monitor and control the risks related to social media. The size and complexity of the program should be appropriate for the breadth of social media use within the financial institution. (Rely heavily on social media = more detailed program).
• The program should be designed with participation from specialists in compliance, technology, information security, legal, human resources, and marketing.
• Financial institutions should provide ongoing guidance and training for employee use of social media.

Other components of a risk management program should include:

• A governance structure with clear roles and responsibilities, with controls and ongoing assessment of social media activities risk in place.
• Policies and procedures regarding the use and monitoring of social media and compliance with all applicable consumer protection laws and regulations.
• A process for selecting and managing third-party relationships in connection with social media use.
• A process for monitoring social media use by the financial institution or a contracted third-party.
• Audit and compliance functions that ensure ongoing compliance with internal policies, plus applicable laws and regulations.
• Parameters for providing reporting to the financial institution’s board of directors or senior management, to enable periodic evaluation of social media use and social media use policies.

Link to the announcement: http://www.ffiec.gov/press/pr121113.htm.