Privacy gets a makeover

by AffirmX

by. Jane Pannier

More and more financial institution processes are getting a technological makeover, and privacy is no exception. Regulation P currently requires financial institutions to provide initial and annual privacy notices to their customers/members by mail. The Consumer Financial Protection Bureau is proposing to allow an alternate delivery method (like posting it to your website) for the annual privacy notice. This is helpful, as financial institutions have long complained that mailing the annual notices is costly and, in most cases, does not provide the customer/member with new information. This proposal would provide some financial institutions with the ability avoid the hideously costly annual mailing process of a notice that is a contender to take home the honors of the mailer most likely to end up in the consumer’s trash without being opened.

Operational Impact

In order for your financial institution to take advantage of the proposed alternative to the mailing of annual privacy notices, you would need to be sure that none of the following conditions exist:

  • Sharing customer/member information with nonaffiliated third parties in a manner that triggers an opt-out right;
  • Including an opt-out notice on the annual privacy notice that is triggered by the affiliate sharing requirements under section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act;
  • Providing your annual privacy notice, as required by Regulation P, as the sole means of satisfying any notice requirement you may have under section 624 of the Fair Credit Reporting Act, which deals with sharing information with affiliates;
  • The information disclosed since the customer/member last received a privacy notice has changed; or
  • Using a privacy form other than the model form provided in Regulation P.

If none of the above conditions have disqualified you, then instead of providing the annual privacy notice, you could do the following:

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