Suze Orman Gets a Sweet Deal
Who doesn’t know Suze Orman? I’m sure you’ve flipped by her show on Saturday nights on CNBC. In case you are wondering, Orman is going to talk about credit card company rules this week.
With her brightly colored jackets and even brighter teeth, Orman is a media celeb. Her game is audience, just like every media play (BankInnovation.net included). You may not realize this, but the Federal Deposit Insurance Corp. is helping Orman gain an even wider audience, and I wonder whether, in these austere times, if the FDIC should be doing so without compensation.
Let me explain. Orman is the spokeswoman for the FDIC’s MyFDICInsurance.gov consumer education initiative. Since last fall she’s been the “face” of the campaign, appearing on the site and in TV ads promoting the FDIC as a safe steward of deposits.
I sent in a Freedom of Information Act request to the FDIC to find out about the relationship between Suze Orman and the agency and found that the FDIC pays her nothing for being its spokeswoman. In fact, there is not even a contract between Orman and the FDIC. Apparently, Orman and the FDIC have a handshake deal.
While this handshake deal is intriguing enough (why the government would not require a contract is odd; more on this later), it raises some additional questions. Why would Suze do this? Wouldn’t she at least want some trademark protections or other rules surrounding her role in the FDIC’s campaign?
To me the answer is obvious: it’s a sweet deal. FDIC touts Orman as the “money expert” at no cost to her. In fact, she gets an explicit endorsement of her expertise by the federal government. At no cost to her.
Of course, there are countless examples of government charging enterprises for promotional services. I was recently driving on the Mass Turnpike and noticed that Citizens Bank has its name and logo prominently displayed at each toll booth on the highway. Citizens pays for this nice branding. Yet, Orman pays nothing for being promoted by none other than the FDIC.
Is there evidence that she has benefitted? Indeed there might be. See the chart below, which shows how the traffic to Orman’s website has doubled this year. Is that traffic increase related to Orman’s role as the FDIC cheerleader? Probably. It certainly hasn’t hurt.
CNBC, which broadcasts Orman’s weekly show, pays to promote her program. Why should the FDIC not ask Orman to pay for the eyeballs it is giving her? It’s not like the FDIC can’t use the money.
As I thought about this whole deal between FDIC and Orman, I realized that while Orman is effectively taking the FDIC for a ride, it is more disconcerting how the FDIC has fallen for it. There is no evidence that the FDIC even tried to bid this out to others or get paid for the exposure it is giving, and this echoes a more general shortcoming of the FDIC: ignorance. The FDIC obviously exhibited profound ignorance during the run-up to the credit crisis, and now shows how it fails to exhibit a degree of shrewdness in dealing with Orman. As a taxpayer, I am dismayed – but not shocked.
