OCC, OTS, FRB, FDIC, FTC: "ANPR to Consider Alternative Forms of Privacy Notices Under the Gramm-Leach-Bliley Act"

ABA Contact: John Byrne
Released: December 23, 2003 Federal Reserve
Published: December 30, 2003 Federal Register
Comments Due: March 29, 2004
Disposition: Filed


Eight federal regulators issued an advance notice of proposed rulemaking (ANPR ) requesting public comment on ways to improve the privacy notices financial institutions provide to consumers under the Gramm-Leach-Bliley Act (GLB Act).

The ANPR describes various approaches that the agencies could pursue to allow or require financial institutions to provide alternative types of privacy notices that would be more readable and useful to consumers. It also seeks comment on whether differences between federal and state laws pose any special issues for developing a short privacy notice.

In the comment letter, ABA offers five (5) recommendations:

Recommendation 1. If the agencies decide to issue formal guidance or a rule regarding how to provide a short version of the notice, it should either be in lieu of the longer form, or at the discretion of the institution.

Recommendation 2. ABA opposes any new federal mandate in this area unless it includes a preemption of state requirements on potentially conflicting privacy notices. It is clear that preemption in this area benefits consumers both by keeping compliance costs down and enabling customers to understand an institution's privacy notice without having to learn 50 state variations.

Recommendation 3. The agencies should consider permitting financial institutions to provide the short form notice via the entity's website.

Recommendation 4. ABA urges the agencies to refrain from issuing a regulatory proposal for short notices until the FACT Act process is completed.

Recommendation 5. If the agencies ultimately decide to issue a short form notice as an option, a regulatory "suggestion" (in the form of a guidance), or as a new mandate, the industry must have a "safe harbor" to ensure that use of the short form constitutes complete compliance with the GLB privacy provisions.

Federal Reserve

Finally, ABA urges the agencies to proceed carefully and deliberately taking into account the benefits to customers, the cost and burdens to the industry and the practicability of alternatives before proceeding with a formal rulemaking process at this time.


2004 Regulations Chart
Federal Register
Comment Letter

Questions? Please contact John Byrne for more information.