Privacy notice with mortgage affiliate
by Andy Zavoina
Question: Our $70 million bank has started a mortgage company that is a wholly-owned subsidiary of the bank and has a separate physical location from the bank. I am considering altering the bank’s existing privacy notice to include the mortgage company.
Is this okay to do? Also, do you have any tips for what the bank can or cannot share with the mortgage company? Is there a list somewhere of what permissible charges a mortgage company can make? There are no other affiliates, and the bank is owned by a single
bank holding company.
Answer: The mortgage company needs a privacy notice. It can be combined with the bank's notice, so long as both entities are specifically identified and it is clear which provisions apply to which.
In terms of sharing information with the mortgage company, the FCRA provides guidance. You can share information about your transactions and experience with a customer. If you want to share more than that, you must provide an opt out notice to the customer, and you also need to mention the sharing in your privacy notice. Section 216.6(a)(3) 216.6(a)(4 )say you must include in your privacy notice:
(3) The categories of affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information, other than those parties to whom you disclose information under §§ 216.14 and 216.15;
(4) The categories of nonpublic personal information about your former customers that you disclose and the categories of affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information about your former customers, other than those parties to whom you disclose information under §§ 216.14 and 216.15;
Here is sample language you may include in your Privacy notice:
“Other Information – You Have a Choice
We are permitted under the Fair Credit Reporting Act to share information about our experiences or transactions with you or your account (such as your account balance and your payment history with us) with affiliates. We also may share additional information
about you or your account (such as information we receive from you in applications and information from credit reporting agencies) with affiliates. You may direct us not to disclose to our affiliates, information that does not relate solely to our experiences
or transactions with you or your account (such as the application information and credit bureau information) by ‘opting-out,’ as described below.”
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