The Consumer Financial Protection Bureau has proposed a rule that would streamline the requirements for privacy notices issued by financial institutions, allowing them to be posted online instead of the current practice of delivering them individually to customers.
The Gramm-Leach-Bliley Act requires that banks and other financial institutions send annual privacy notices to customers that describe how nonpublic personal information is shared. If this information is shared with an unaffiliated third party, the institution must notify consumers of their right to opt out of that sharing and inform them of how to do so. The proposed rule would allow these privacy notices to be posted online instead of relying on an annual paper copy provided they satisfy certain conditions, including not sharing data in ways that would trigger opt-out rights. This proposal would apply to both banks and nonbanks within the CFPB’s jurisdiction. Institutions that choose to rely on this new method of delivering privacy notices would be required to use the model disclosure form developed by federal regulatory agencies in 2009.
