US bank regulators propose guidance on social media

US bank regulators proposed new guidelines on financial activities conducted via social media such as Facebook, Flickr and Twitter, cautioning that the use of such outlets could increase risks to consumers as well as financial institutions.

"Since this form of customer interaction tends to be both informal and dynamic, and occurs in a less secure environment, it presents some unique challenges to financial institutions," the Federal Financial Institutions Examination Council stated.

Once adopted, banks will be expected to use the guidance to "ensure that their risk management practices adequately address the consumer compliance and legal risks, as well as related risks, such as reputation and operational risks, raised by activities conducted via social media ... READ MORE

Released by Fox Business - 22 January 2013