Marketers Using Google Adwords Should Take Note of Recent Policy Changes

In 2015 alone, Google disabled more than 780 million ads in an effort to keep unsavory advertising off its leading search site. And that number may continue to grow with a recent policy change aimed at keeping away ads for predatory payday loans.

According a blog post detailing the announcement, the policy will address concerns about companies that have long-used “slick advertising and aggressive marketing to trap consumers into outrageously high interest loans—often those least able to afford it,” said Wade Henderson, President and CEO of the Leadership Conference on Civil and Human Rights.

What does the change mean for credit unions? At first glance, not much, as credit unions aren’t known to lean on personal loans as much as home or auto loans. However, those that do are cautioned to pay attention—and particularly if their marketing teams use Google Adwords to reach members and potential members. Failure to comply means an ad or campaign could be rejected or removed by Google.

“I would advise any credit union unsure about their compliance to review the new terms before placing any new Google Adwords campaigns, as well as reviewing any currently-running ads,” said Katie Clark, CUCE, BSACS, Regulatory and Compliance Analyst for NWCUA. “The disclosures aren’t new to credit unions, but they are normally only required if a specific trigger term under the applicable regulation is referenced.”

Google is defining “personal loans” as lending money from one individual, organization, or entity to an individual consumer on a nonrecurring basis, not for the purpose of financing purchase of a fixed asset or education. What will the loans need to include to pass approval?

  • Minimum and maximum period for repayment;

  • Maximum Annual Percentage Rate (APR), which includes the interest rate plus fees and other costs for a year;

  • Representative example of the total cost of the loan, including all applicable fees.

In addition, the loans will be banned if the following items are promoted:

  • All personal loans with repayment in full within 60 days will be prohibited;

  • All personal loans with an APR over 36% will be prohibited

Just how long of a runway do financial institutions have to review the terms? The new policy is set to go into effect July 13.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Questions about this story? Contact Eric Horvath: 503.350.2222, ehorvath@nwcua.org.

Posted in Compliance News, Marketing & Communications, NWCUA.