On May 6, 2014, the Consumer Financial Protection Bureau (the “CFPB”) proposed an amendment to Regulation P (the “Proposed Amendment”) that would allow financial institutions that do not engage in certain types of information-sharing to largely cease mailing the annual consumer privacy notices required by the Gramm-Leach Bliley Act (“GLB”) if they post their privacy notices on their websites and meet certain other conditions. Under the Proposed Amendment, the online notice option would only be available to institutions that do not share data with unaffiliated third parties in a manner that triggers customers’ rights to opt out of such sharing. Financial institutions eligible for the online notice option would still be required to mail annual GLB privacy notices to customers who request them by phone, to ensure availability of such notices to customers with limited or no Internet access.
According to a statement issued by the CFPB, benefits of the Proposed Amendment include the following: (a) consumers would have constant access to their financial institutions’ privacy policies posted online; (b) financial institutions subject to the CFPB’s authority pursuant to GLB would be incentivized to limit their data sharing practices; (c) consumers who are concerned about their personal information would be better able to compare different institutions’ privacy policies, because the Proposed Amendment would require financial institutions electing to post their privacy notices online to use the model disclosure form designed by federal regulators; and (d) the Proposed Amendment would potentially reduce financial institutions’ cost of providing annual privacy notices pursuant to GLB.
The CFPB, which was created pursuant to the Dodd-Frank Act, has rulemaking authority over certain financial institutions with respect to the privacy provisions of GLB, while the Securities and Exchange Commission, the Commodity Futures Trading Commission, and state insurance departments retain GLB rulemaking authority over financial institutions subject to their jurisdiction, and the Federal Trade Commission also retains limited jurisdiction with respect to GLB.
The CFPB will accept comments on the Proposed Amendment for 30 days after its publication in the Federal Register. To view the Proposed Amendment, click here.