Because of the potential for customer confusion as to which products are federally insured, the Board proposed to require a section 20 affiliate to make disclosures to customers similar to those that the Interagency Statement requires of a bank selling nondeposit products on bank premises.
The proposal would also continue to prohibit an affiliated bank from knowingly advising a customer to purchase securities underwritten or dealt in by a section 20 affiliate unless it notifies the customer of its affiliate’s role. The proposal also continues to prohibit a bank and its section 20 affiliate from sharing any nonpublic customer information without the customer’s consent.