The Consumer Financial Protection Bureau (CFPB) yesterday proposed a rule yesterday to that would allow companies that limit their consumer data-sharing and meet other requirements to post their annual privacy notices online.
Consumers need clear information about how their personal information is being used by financial institutions,” said CFPB Director Richard Cordray. “This proposal would make it easier for consumers to find and access privacy policies, while also making it cheaper for industry to provide disclosures.”
The Gramm-Leach-Bliley Act (GLBA) requires financial institutions send annual privacy notices to customers describing whether and how financial institution shares consumers’ nonpublic personal information. If the institution shares such info with unaffiliated third parties, it must notify consumers of their opt-out rights. The CFPB’s proposal would allow institutions to post privacy notices online, in certain circumstances, instead of distributing an annual paper copy. Banks posting online would be limited to using the GLBA model form found here.
Under the proposal, if an institution qualifies for and wants to rely on the online disclosure method, it would have to meet the requirements set forth on the CFBP’s website found here.
For banks that are willing to meet the prerequisites, the cost savings are material. The Bureau estimates that about $17 million could be saved by the industry annually if institutions were to choose the proposed online disclosure method.