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#2052740 - 12/07/15 02:34 PM New Bill Passed - Annual Privacy Notice Eliminated
peony Offline
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peony
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I received an email from the local banking association with the below information:

President Obama on Friday signed a long-term highway bill that included several regulatory relief provisions. These measures, now signed into law after passing the House and Senate last week, will:
• Reduce the burden of unnecessary privacy notice paperwork. (Privacy notices will ONLY need to be sent out when an account is opened or when the privacy notice is changed).
• Expand the number of banks eligible for the 18-month exam cycle.
• Equalize the SEC registration and de-registration thresholds for savings and loan holding companies.
• Expand Trups CDO relief for smaller bank holding companies.
• Establish a process for designating an area rural for purposes of Consumer Financial Protection Bureau exemptions.


Regarding to the annual privacy notices, I can't seem to find anything about when this will be in effect. We are in the process of getting the privacy notice on our statements and sending out the notices to the ones that wouldn't get a statement but we were wondering since President signed the bill on Friday, are we ok to scrap the mailing since it's no longer required??

We are unable to find any specific information regarding to this bill anywhere. Would love to hear your thoughts and opinions! Thanks!

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#2052742 - 12/07/15 02:38 PM Re: New Bill passed peony
John Burnett Offline
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I would not change plans yet. There still needs to be a reg change from the Bureau.
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#2052757 - 12/07/15 03:03 PM Re: New Bill passed peony
rlcarey Offline
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Sounds to me that the law was effective on the date it was signed by the President, regardless of what current regulations might say.

Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) is amended by adding at the end the following:
‘‘(f) EXCEPTION TO ANNUAL NOTICE REQUIREMENT.—A financial institution that—
‘‘(1) provides nonpublic personal information only in accordance with the provisions of subsection (b)(2) or (e) of section 502 or regulations prescribed under section 504(b), and ‘‘(2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with this section, shall not be required to provide an annual disclosure under this section until such time as the financial institution fails to comply with any criteria described in paragraph (1) or (2).’’.
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#2052808 - 12/07/15 04:33 PM Re: New Bill passed rlcarey
Reads Regs Offline
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Originally Posted By rlcarey
Sounds to me that the law was effective on the date it was signed by the President, regardless of what current regulations might say.


Thanks, Randy. I found the language you cited in section 75001 of HR 22 (FAST Act) but did not see any specific language about when this provision takes effect. I searched the entire law for the word "effective" but could not find anything specifically addressing this section.
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#2052831 - 12/07/15 05:33 PM New Bill Passed - Annual Privacy Notice Eliminated Reads Regs
Elwood P. Dowd Offline
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The regulation will need to be amended to comport with the statute. However, as the language in the regulation is now in direct conflict with the language in the statute, the language in the statute controls.

Regulation CC is still awaiting the modification that will indicate that the next day availability amount is the $200 stated in the statute, not the $100 stated in the regulation. (The statute was amended in 2011.)

"Manana" is the byword for the federal bureaucracies.
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#2053203 - 12/09/15 12:25 AM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
Bibliofiend Offline
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I got this from a friend on 12/7/15:
President Obama on Friday signed a long-term highway bill that included several regulatory relief provisions long advocated by ABA. These measures, now signed into law, will:
• Expand the number of banks eligible for the 18-month exam cycle.
• Equalize the SEC registration and de-registration thresholds for savings and loan holding companies.
• Reduce the burden of unnecessary privacy notice paperwork.

The last bullet apparently refers to the privacy notice and this is the link to the new law. https://www.congress.gov/bill/114th-congress/house-bill/22/text

Has anyone else noticed this? From chatter with some colleagues, it seems that this is good new for those who don't share info, other than permitted by law. That is, if you don't have to offer customers an opt-out option.
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#2053208 - 12/09/15 01:36 AM Re: New Bill Passed - Annual Privacy Notice Eliminated Bibliofiend
Elwood P. Dowd Offline
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I think peony noticed it in post 2052740 above.
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#2053217 - 12/09/15 01:21 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
Noah Wiseman Offline
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I've reviewed the language of the Surface Transportation Reauthorization and Reform Act of 2015 concerning the Exception to the Annual Privacy Notice Requirement Under the Gramm-Leach-Bliley Act and looked at the sections referenced in the added language in an effort to try to determine if my bank falls under this exception based on our sharing.

We only share as allowed by the law, but we include the Affiliate Marketing Notice (1022 Subpart C) information in our Privacy Notice. When a customer opts-out of Affiliate Marketing, we do not require they renew their opt-out every 5 years - we consider it permanent.

I believe that although we do include the Affiliate Marketing Notice which provides for an opt-out in our Privacy Notice we would still fall under the exception but I wanted to see what others thought on the subject as I realize I may have missed something in my reading. Any opinions would be appreciated.

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#2053226 - 12/09/15 02:15 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
rlcarey Offline
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Information sharing with your affiliates is governed under the FCRA and not the GLBA.
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#2053242 - 12/09/15 02:47 PM Re: New Bill Passed - Annual Privacy Notice Eliminated Reads Regs
John Burnett Offline
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Originally Posted By Reads Regs
Originally Posted By rlcarey
Sounds to me that the law was effective on the date it was signed by the President, regardless of what current regulations might say.


Thanks, Randy. I found the language you cited in section 75001 of HR 22 (FAST Act) but did not see any specific language about when this provision takes effect. I searched the entire law for the word "effective" but could not find anything specifically addressing this section.


The effective date of section 75001 was the date of enactment of the FAST Act, December 4. Before you leap into eliminating your annual mailings, think about contacting your regional lead examiner. Although it should be a relatively simple matter for the Bureau to get out an amendment to Regulation P, it may be a while before that happens.
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#2053333 - 12/09/15 05:59 PM Re: New Bill Passed - Annual Privacy Notice Eliminated Elwood P. Dowd
Bibliofiend Offline
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Sorry, didn't notice peony's posting date, so didn't realize it was current. Contacted our regulator - the local contact did not know about this legislative act.
Last edited by Bibliofiend; 12/09/15 06:04 PM.
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#2053542 - 12/10/15 03:56 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
edAudit Offline
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You are here
As part of our IIA 1312 review the auditor wishes to have a list of ALL the regulations that we must follow. When I give him the Highway Bill (FAST Act) that should get him running.
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#2053588 - 12/10/15 06:22 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
SusieSpongehead Offline
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I spoke to our EIC at the FRB Denver Branch regarding this. After consulting a few colleagues he suggested that we wait to see if the CFPB issues something. We do not have to send the annual notice until July 2016 so fingers crossed that we hear something before then.

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#2053589 - 12/10/15 06:23 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
John Burnett Offline
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Probably the safest course of action -- for you and the examiner.
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#2053665 - 12/10/15 09:16 PM Re: New Bill Passed - Annual Privacy Notice Eliminated SusieSpongehead
Bibliofiend Offline
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Alas, we're on a January cycle, so a prompt ruling would be nice!
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#2053673 - 12/10/15 09:36 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
David Dickinson Offline
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I wouldn't hold my breath for a prompt ruling. As Ken pointed out, Reg CC changed years ago, and we still don't have a regulation that matches.

It's law. I'd discuss it with my regulators (just to give them a heads up) and take advantage of it. What's the risk?
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#2053683 - 12/10/15 09:51 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
John Burnett Offline
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Agreed. After looking at it again, I think if you don't share except as permitted without an opt-in, it's a very low risk thing.

With all those annual notices pulled, this is going to guarantee that the USPS will collapse. Oh, that will happen anyhow, right?
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#2053717 - 12/11/15 01:16 PM Re: New Bill Passed - Annual Privacy Notice Eliminated Bibliofiend
Noah Wiseman Offline
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Originally Posted By Bibliofiend
Alas, we're on a January cycle, so a prompt ruling would be nice!

Although you typically send your annual Privacy Notice in a particular month does not mean that is when you must always send it. Regulation P only requires that you provide the notice annually, which is once in any period of 12 consecutive months and you get to define that period but must do so consistently. My bank defines this 12 consecutive month period as a calendar year (January 1 - Dec 31 -- although we do not define it in writing anywhere). This means we could send our annual Privacy Notice in January 2015 and we wouldn't need to send it again until December 2016. See Sec. 1016.5 (a)(1) for the general rule and (a)(2) for the rule example which I believe supports my statements. So it would all depend on what time frame you define as annually (as well as if you prefer to await CFPB regulation rule change before complying with this statute change).

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#2053725 - 12/11/15 02:04 PM Re: New Bill Passed - Annual Privacy Notice Eliminated SusieSpongehead
Elwood P. Dowd Offline
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Quote:
I spoke to our EIC at the FRB Denver Branch regarding this. After consulting a few colleagues he suggested that we wait to see if the CFPB issues something.


That's disappointing. The issue might not be addressed in "examiner school," but it is addressed in high school and college courses on the U.S. legislative system. A regulation can interpret a statute passed by Congress, but it cannot change it.

When Congress passed the Expedited Funds Availability Act it indicated that "local" or "nonlocal" was determined by the two banks' geographic locations. When the FRB issued the first version of Reg CC it "corrected" the statute to say that "local" vs. "nonlocal" could be determined by referencing the transit and routing numbers on the checks. The NCUA immediately sued to represent the interests of credit unions that used "payable through" banks. They got the ruling they asked for in short order; i.e. the FRB wasn't empowered to change Congressional intent even if it was to improve its logic.

If the regulation and the statute it is supposed to interpret conflict, the language in the statute controls.
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#2053820 - 12/11/15 07:01 PM Re: New Bill Passed - Annual Privacy Notice Eliminated Noah Wiseman
Bibliofiend Offline
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Noah Wiseman, thank you so much for your posting! Reading the cites, I agree with your interpretation. Which will allow me some breathing room.
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#2053829 - 12/11/15 07:27 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
Kathleen O. Blanchard Offline

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Here is the citation on "annual"

Sec. 1016.5 Annual privacy notice to customers required.

(a)(1) General rule. You must provide a clear and conspicuous notice to customers that accurately reflects your privacy policies and practices not less than annually during the continuation of the customer relationship. Annually means at least once in any period of 12 consecutive months during which that relationship exists. You may define the 12-consecutive-month period, but you must apply it to the customer on a consistent basis.

(2) Example. You provide a notice annually if you define the 12-consecutive-month period as a calendar year and provide the annual notice to the customer once in each calendar year following the calendar year in which you provided the initial notice. For example, if a customer opens an account on any day of year 1, you must provide an annual notice to that customer by December 31 of year 2.
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#2053970 - 12/14/15 03:23 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
Bibliofiend Offline
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From today's BankersOnline Daily Compliance Briefing:

Privacy notice mailing requirement changed
Title LXXV of the Fixing America's Surface Transportation (FAST) Act of 2015 (Public Law 114-94), enacted on December 4, amended Section 503 of the Gramm-Leach-Bliley Act (GLBA) to create an exception to the annual privacy notice requirement for financial institutions. Institutions that don't share nonpublic personal information in any way that requires an opt-in under Regulation P, and haven't changed their policies and practices for disclosing nonpublic personal information from those most recently disclosed will no longer be required to provide an annual disclosure.We can expect a Bureau amendment to Regulation P to implement the change in the law, and we will report it when it happens, but the law behind Regulation P no longer requires those annual mailings.
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#2054063 - 12/14/15 07:46 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
rlcarey Offline
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Listen to Ken. It is now the law, there is nothing the the individual regulatory agencies can do about it.
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#2054211 - 12/15/15 04:48 PM Re: New Bill Passed - Annual Privacy Notice Eliminated Noah Wiseman
Ted Dreyer Offline
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I just want to pass along some information from the FAQs issued by the regulators on privacy:

"C.5. After I provide an initial privacy notice to my customer, the Privacy Rule requires me
to deliver privacy notices to that customer not less than annually during the
continuation of the customer relationship. What does “annually” mean?

“Annually” means at least once in any period of 12 consecutive months during which a
customer relationship exists. If you use the calendar year as your notice period, you have
the flexibility to give the first annual notice to a customer at any point in the calendar year
following the year in which the customer relationship is established. Thereafter, you are
expected to provide annual notices on a consistent basis. Any period of more than
12 consecutive months between annual notices should have an appropriate business
justification.

http://www.federalreserve.gov/regulations/cg/faq.pdf

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#2054239 - 12/15/15 06:08 PM Re: New Bill Passed - Annual Privacy Notice Eliminated peony
DeeGail Offline
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Is there a statement notice that must be used to let out customers know they can view it on our website or get a copy by calling us? Or is that not needed either?

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