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BUREAU OF BANKING
Department of Professional and Financial Regulation
State of Maine
September 24, 1982

BULLETIN #28 REPURCHASE AGREEMENT PROGRAM

To the Chief Executive Officer Addressed:

Several questions have arisen concerning the offering of repurchase agreement programs by financial institutions. Specifically, the question of adequate disclosure in advertising has arisen. The Bureau of Banking has adopted the following (which includes some concerns expressed by the FDIC) as a guideline when advertising in the media:

1. The warning statement that it is a repurchase agreement and not a deposit must be in the same size type as the title adopted for the repurchase agreement program.
2. If a passbook replica is issued in any visual ad, the cover must contain the legend that it is a repurchase agreement and not a deposit which is insured by a federal insuring agency.
3. The fact that it may be renewed must be indicated. (Repurchase agreement less than $100,000 with maturities of less than 89 days may automatically be renewed.)
4. The rate of interest and the method by which this interest is computed must be fully disclosed.
5. Language generally associated with deposits should be avoided to prevent creating the impression that insured deposits are being offered (deposit, withdrawal, FDIC insurance, etc.).
6. Reference to the underlying U.S. Government and/or agency issues securing the program shall clearly state the fact it is not guaranteed in any way.
7. The minimum amount of money that may be put in or taken out must be indicated along with the minimum balance to be maintained.
8. Any penalty for cashing the certificate prior to withdrawal should be indicated.

/s/ Roy L. Gove

Deputy Superintendent

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