Customers of some banks may be receiving one less communication by mail following the Consumer Financial Protection Bureau’s finalization of a rule to promote more effective privacy disclosures. Translation: some banks can post their privacy notices online rather than slapping a stamp on them.
The rule [PDF], which was first proposed in May, allows financial institutions that limit their consumer data-sharing and meet other requirements –– such as not sharing data in ways that would trigger consumers’ opt-out rights –– to post their annual privacy notices prominently online.
Banks and nonbanks that are within the CFPB’s jurisdiction under the Gramm-Leach-Billet Act are eligible to use the new privacy notification method.
If an institution chooses to use the new method they must employ the model disclosure form [PDF] developed by federal regulatory agencies in 2009.
The company would also be required to inform consumers annually about the availability of the online disclosures. However, instead of sending a separate notice the institution could include an insert in regular consumer correspondence such as a monthly bill. Consumers would have the ability to request a paper notice by calling a toll-free number.
Currently, banking institutions are required under the GLBA to mail annual privacy notices describing whether or how the institution shares consumers’ nonpublic personal information. Institutions that share consumers’ nonpublic information must notify customers of their right to opt-out of the sharing and how to do so.
Officials with the CFPB say the new rule provides consumers with constant access to privacy policies, limits data sharing and provides additional education for consumers.
The rule will become effective immediately upon publication in the Federal Register.
Consumer Financial Protection Bureau Finalizes Rule To Promote More Effective Privacy Disclosures [CFPB]
by Ashlee Kieler via Consumerist
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