Eight federal regulatory agencies today released a final model privacy notice form that will make it easier for consumers to understand how financial institutions collect and share information about consumers.
Under the Gramm-Leach-Bliley Act (GLB Act), institutions must notify consumers of their information-sharing practices and inform consumers of their right to opt out of certain sharing practices. The model form issued today can be used by financial institutions to comply with these requirements.
In a previous Appraisal Scoop article, I asked:
- What does G-L-B have to do with ME?
- Hasn't that been around for a long time?
- Why is it a HOT topic now?
The Financial Services Regulatory Relief Act of 2006 amended the GLB Act to require the agencies to propose a succinct and comprehensible model form that allows consumers to easily compare the privacy practices of different financial institutions, and has an easy-to-read font.
The agencies conducted extensive consumer research and testing in developing the model form issued today. Then they solicited public comments and considered those comments in developing a model form that is easier for consumers to understand and use.
The final rule provides that a financial institution that chooses to use the model form obtains a "safe harbor" and will satisfy the disclosure requirements for notices. The rule also removes, after a transition period, the sample clauses now included in the appendices of the agencies' privacy rules.
The final model privacy form was developed jointly by the Board of Governors of the Federal Reserve System, Commodity Futures Trading Commission, Federal Deposit Insurance Corporation, Federal Trade Commission, National Credit Union Administration, Office of the Comptroller of the Currency, Office of Thrift Supervision, and Securities and Exchange Commission.
A copy of the form and rule are attached.