Regulation P Proposed Amendment

On July 1, the CFPB released proposed amendments to Regulation P, to align the regulation with the changes to the GLBA that took place last year.  If you remember, in December 2015, the GLBA was amended to provide an exemption to financial institutions from the requirement to provide an annual privacy notice.  If the institution does not allow the customer to opt-out of sharing, and has not changed its privacy notice from the one that was provided to the customer, it does not have to provide an annual notice.  Since then, the GLBA and Regulation P have conflicted.

This proposal carries the exception to Regulation P, establishes deadlines for institutions resuming annual privacy notices if their sharing practices change to require the notice, and removes the alternative delivery method for providing the notice.

The credit union must provide an amended privacy notice before a change in sharing and an annually thereafter, if it no longer meets the exception requirements – if the change involves:

  • Disclosing a new category of nonpublic personal information to any nonaffiliated third party;
  • Disclose nonpublic personal information to a new category of nonaffiliated third party; or
  • Disclose nonpublic personal information about a former customer to a nonaffiliated third party, if that former customer has not had the opportunity to exercise an opt out right regarding that disclosure,

If the credit union changes its sharing practices, other than listed above, it must provide an amended privacy notice within 60 days, if the change would no longer allow the exemption.

If enacted, the amendment should have little impact on the credit union, as most credit unions chose to follow the changes to the GLBA in December.  Credit unions should review the timing requirements for privacy notices when their practices change.

Comments will be accepted for 30 days after publication in the Federal Register (TBD). 

You may submit comments, identified by Docket No. CFPB-2016-0032 or RIN

3170-AA60, by any of the following methods:

  • Electronic: http://www.regulations.gov. Follow the instructions for submitting comments.
  • Mail: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street, NW., Washington, DC 20552.
  • Hand Delivery/Courier: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1275 First Street NE., Washington, DC 20002.

Instructions: All submissions should include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. Because paper mail in the Washington, DC area and at the Bureau is subject to delay, commenters are encouraged to submit comments electronically. In general, all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public inspection and copying at 1275 First Street NE., Washington, DC 20002 on official business days between the hours of 10 a.m. and 5 p.m. Eastern Time. You can make an appointment to inspect the documents by telephoning (202) 435-7275.

All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Sensitive personal information, such as account numbers or Social Security numbers, should not be included. Comments generally will not be edited to remove any identifying or contact information. FOR FURTHER INFORMATION CONTACT: Joseph Devlin and Nora Rigby, Counsels; Office of Regulations, at (202) 435-7700.

Passwords to access the blog posts, and blog posts are only for NWCG owners and retained clients. These should not be shared outside of the credit union. Blog posts generally contain only a summary of any requirements, and do not represent all potential impact on the credit unions. For further details on any blog post, contact NWCG or references cited in the blog post. The information contained on this site is provided for informational purposes only, and should not be construed as legal advice.

 

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