Okay everyone, here is your chance to sound off on the GLB.

How many people work for banks that have benefited from GLB? If so, what is the size of your institution, and how have you benefited?

How many banks have found GLB to be all cost/burden and no benefit? If so, what (short answers please!) are your costs, burdens, and what products have you decided to curtail or cancel because of GLB?

I'll start - Privacy Policy and Notices - a LOT of time and busy work for me and we don't share information except under 14 & 15 exceptions to service the customer's account or to compy with the law.

We are cancelling our checking account Discount Club program because we don't want to deal with the insurance disclosures for the $10,000 Accidental Death policy.

We will also probably discontinue our private label consumer credit card program because the compliance burden now costs more than the interest income.

Although I have already spoke my mind in other threads, here it is again. I am about as mad as ----. In all my years in banking I have not seen anything cause the burden that this has brought on. Benefits? Not that I know of! First the requirement to sent privacy notices to ALL consumer customers each and every year is expense and RIDICULOUS. Second, this mess on requiring BOTH written and verbal disclosures is UNHEARD OF! Just how much protection can the consumer afford? I don't have exact cost, however, we are a small bank, I have no one to help me with compliance and I find that important ongoing compliance tasks are not getting done because I spend ALL my time on this mess.
My time alone has cost the company thousands. The annual privacy notices and mailing runs about $2500 annually plus $1000 upfront for programming not to count the salary of our IT people.And we are just a little guy!

If you ask me, many of the new rules we are seeing are being put in place by people that don't have a clue what they are talking about just trying to justify our tax dollars they are squandering. Sorry--but this is how I feel.

The individuals that thought this regulation would be beneficial to the customer are out of their mind. I have not received one telephone call from our customers saying, THANK YOU, this disclosure cleared up everything! GIVE ME A BREAK! And the media. The View, 20/20, local news, no one can get the facts straight then our customers call and act as though the above mentioned people know more about the law and its requirements than the bank.

The expense increases on a daily basis and it doesn't look as though it is finished yet.

Thanks for letting me vent.

Amen, bwest! I need a hatrack for all the hats I wear around here, so I have NO time to waste. As far as I am concerned, that's all GLB has been - a waste. No protection from the industries that sell the dickens out of people's NPPI, additional hurdles for good, long-time customers to hurdle to get their own account info. In a rural area like ours, that doesn't fly! Insurance sales? How about less insurance sold because of discontinued products to avoid disclosure burdens? For this and all other over-disclosures, don't the regulators understand that our customers get overwhelmed by the paper volume, and pay less attention than they would if they got disclosures only for REALLY important stuff? How is this providing the customer with more protection (as opposed to simply more paper)? Like I said in another post, I can't fling open my window to yell "I'm mad as h---, and I not going to take it anymore!" because the minimum security standards require that the windows be locked.

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Mary and Lucy -
I hope more people chime in on this topic. We need to take this and send it to the regulators and the Banking Committee. I would venture a guess that the Banks that have been HURT by GLB are the smaller, community based banks that are now falling even further behind the giant inter-state behemoths that will try to offer everything from overdraft checking to rental insurance.

Meanwhile, the smaller institutions, the ones that pay attention to their customers' needs are being squeezed again.

How can we say - Thanks but No Thanks?

There's a Chinese proverb "Never use a cannon to kill a fly." Unfortunately, Congress has often done exactly that -- by addressing small problems in ways that are major overkill.

It's mosquitos in Borneo all over again.

"In the 1960s, the World Health Organization (WHO) applied DDT in Borneo to control mosquitos. The DDT killed not only the mosquitos, but also predatory wasps. With the removal of the wasps, came an outbreak of
caterpillars. The huge numbers of caterpillars fed on the thatched roofs of
houses, leading to their collapse. The WHO then applied more DDT to kill houseflies, but the DDT was taken up by geckos who ate the flies. The geckos got sick and were caught and eaten by cats. The cats began to die,
and the rat population, carrying bubonic plague, began to grow and compete with the local population for food. The government of Borneo was desperate for a solution, and finally decided that the only way to control
the rats was to parachute cats into the region." from Remarks to the Society of Environmental Toxicology and Chemistry by D. James Baker, November 17, 1996

A prime example of the "mosquitos in Borneo" approach in bank regulation is Truth in Savings. No one would object to the prohibition against false or misleading deposit-related advertisements. Clarifying what constitutes a "free" account was probably a smart thing to do. Requiring information to be given out upon request that states the yield as the APY and uses a uniform formula is probably fine, too. But the Sierra Club ought to have a spot in its hall of shame for the deforestation caused by financial institutions being forced to generate TISA disclosures that customers don't want, don't read, and don't keep.

They've taken what they perceive as problems (privacy, confusion about insurance, etc.) and they have created more trouble with their solutions. The regulatory "DDT" they have chosen to use is proving to be toxic in ways they never contemplated.

I'm very interested in GLB perceptions, particularly those related to the new powers. To what extent are your institutions planning to (or already) using them?

I'm with you guys. This has been nothing but a waste of time and a confusion to the persons they want us to "protect". Once I sent our 20,000 private mail notices, I got at least 19,000 calls from the customers. It had about as much effect as when we first started quoting APY first and then rates. The customer being given the opportunity to "shop around".....The only think they wanted to shop for was a clearer explanation.....

Feels good to vent, doesn't it....

Just to add a little fuel to the fire, there is a new study out from the Center for Democracy and Technology that I think everyone will find interesting!

The link is: www.cdt.org/privacy/financial/010829onlinebanking.pdf

They have filed a complaint with the FTC that can be found at www.cdt.org/privacy/financial/010829ftc.shtml

I would really like to see this thread emailed to our Senators Gramm, Leach and Bliley. I noticed Gramm has annouced his retirement this morning. I am mad as ____ that I am not going to get to vote against him next year!

Let's don't forget that other incredibly useful by-product of GLBA in the heat of the moment: namely, CRA Sunshine.

You know, if one looks at all the withdrawn and delayed regulations in the last couple of years--privacy finalized and then delayed 6 months, insurance sales delayed 6 months, e-disclosure regs delayed indefinitely, FCRA regs proposed and disappeared, Tatelbaum I and II, KYC shot down, to name just a few--one gets the sense that the legislative and regulatory process has seriously run off the tracks somehow with respect to our industry. Add to that the endless litigation over yield spread premiums and the turmoil surrounding anything associated with HUD and the picture is not very pretty.

I don't know what the answer is, but I don't think it's helpful to develop a bunker mentality on our part. Somehow we have to reconnect with the other parties in this business and get them to see we're not the bad guys in all this. Just my two cents.

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The opinions expressed are mine and not those of my employer

Bonnie M,

We also have spent a lot of money and time complying with GLB Act. Printing brochures, training employees, attending seminars and securing customer information. We have had no calls from customers on the privacy notices that were mailed.

We are cancelling our realtionship with a 3rd party that offered credit life mortgage insurance to our customers.

We are small and only share information, the same as you, under exceptions 14 and 15.

I wasn't involved in writing the Privacy Policy but I know it was not written over night.

Also, the Information Security piece is taking alot of our time to develop the policy and procedures. We spent thousands on new file cabinets with locks and also purchasing keys for old cabinets that could be re-keyed.

Another example of "fleecing" America.

Pat Field

The trade-off for banks in knocking holes in Glass-Steagall and getting new powers sure seems to be more consumer oriented legislation like TISA, revised CRA, privacy, et al. It indicates what currency legislators on either side of banking issues are willing to spend to get what they want.

But how big a price in excessive consumer protection 'baggage' will the banking industry be willing to pay over time to tear down Glass-Steagall entirely? We've paid a dear price already in the one-step-at-a-time approach, and it looks to cost a whole lot more to finish the job. Would it be better policy for the banking industry to put all the chips on the line and say to Congress it's time to pull G-S down entirely but here are the limits of new consumer 'add-ons' we're willing to accept. Let's debate and deal. The cost long-run may be much less.

Another point, and I say this with all love and affection for fellow compliance professionals, but when will we stand up in the policy debate and be real advocates for less burdensome consumer regulation? I see in this and other compliance forums little interest in true policy debate - - and what interest we do have is limited to filing comment letters on pending regulations. But that's too late - it's not cutting edge input on policy. I hope this is not the case, but at times I get the feeling that compliance people are willing to trade-off more regulation for the personal gain of job security and entrenching power versus what's good for banking in the long-run. Comments?

I would like to add that our eyesight has gone with all the reading we must do to keep up on GLB. It has neither benefited the consumers or the banks but created confusion. That we spend our days on clarifying to the customer and/or our employees.

Only thing I derived from the GLA is this great "discussion thread". Many thanks to all of you as it helps to know others feel the same way on this issue.

The survey from "Center for Democracy & Technology" has caused even MORE problems as our newspapre carried the headline, "Banks violate Online Customers'Privacy. Read it as it is an eye opening experience and will increase the growth in your profanities vocabulary overnite.

Ken,
I don't know about anyone else, but I have about as much job security as I can stand. The main reason I don't get more involved in more meaningful debates is - I have a job to do. My employer doesn't pay for me to lobby congress and public interest groups to educate them on what is a meaningful disclosure. This little forum is about all the time I can spare for this kind of stuff.

I think most Compliance professionals, at least those that work for depository institutions aren't looking for more regulations to ensure they have a job. There are some compliance consultants that love to sell the "Sky is falling" news about the latest compliance snafuus (present website excluded), but for the most part, I think we would all like to do a job that makes sense to all involved.

We are also a small community bank that only shares information under exceptions 14 & 15. I understand the need to inform our customers of bank policy and to safeguard their personal information. I DO NOT understand why we must redisclose the same policy, year after year. I mean sure, if your policy changes, by all means, tell your customers. But the time and expense for the reg in its current form is asinine. How can this possibly be justified, and what can we do about it besides vent to each other?

My institution has not benifited from the expanded opportunities contained in GLB. However, we have incurred the additional expense of Privacy disclosures and information management. We have been successfully processing customer information for more than 50 years, with no prior complaints. Now, almost over night, a big problem exists that requires a redirection of resources. While there certainly are benifits from formalizing internal controls, there appears little advantage to publicly restating corporate policies. Such disclosures are usually just so much junk mail. Why cann't we put GLB back in the bottle and put a cork in it.

Ken, compliance officers tell me often that they are so preoccupied with "what IS", that they have little time to spend studying "what might be", or in offering their opinion to legislators and regulators on proposed legislation or regulations. I can certainly understand, but you all should never lose sight of the fact that your view from the trenches is much different from the view from the hallowed halls of Congress and the beltway offices of the regulatory agencies. Your insight into the practical implications of proposals can be invaluable in halting ill-conceived, but well-meaning, requirements.

Every time I teach a seminar, I learn from the practical experiences related to me by attendees. Congress and the regulators can learn as well, and we all benefit from your timely, insightful comments.

It's not too late to make a difference.

I share much of the frustration expressed earlier by Ken Holmes. Too often we are told how to address our comment letters in such a polite way so as to be "effective". Well, it wasn't all those polite comment letters that stopped KYC, it was the public out cry (from those that did not get the "be polite" instructions) that told the regulators that KYC did not make sense. Just one time I would like a trade group or lobbyist to say, without equivocation, "Mr Regulator, what you propose is really stupid". No, it is not the Compliance professionals that seek job security by more and more regulations, but it certainly seems that the bureaucrats operate that way.
With limited time, resources and authority I can not comment on each regulation proposal. Mary Beth, I really am glad that you are listening to the trenches, because sometimes those of us in the trenches feel like some one is shoveling to covered us up!
Thank you, also, Pat Field, Kathy Lafleur, and elena for speaking on areas of GLB that frustrate me too.

I think anyone who has been actively involved in the implementation process of GLBA and FCRA shares the same frustration level-particularly if they work for a community bank with limited resources (especially TIME).

Although as a banker I am frustrated; as a consumer I do appreciate some of the efforts behind the bill. I don't want companies--any company--selling my personal information to anyone else. And I am exercising my right to say no. I want to actually sit down and eat dinner without being interrupted by a telemarketer--just once! (And, actually, I think the calls and preapproved offers are slacking off since I opted out at the credit bureaus.) And I do want companies to protect my information.

But that being said, I think surely there could have been a better way. Better for the financial providers and better for the consumers. I doubt most consumers are getting the protection they deserve simply because they didn't understand the notices they received. I agree that, once again, American consumers have been short-changed.

Where are you in your privacy project? Now that we've written and mailed notices, written privacy policies and data protection policies, trained personnel, met with the Board and been yelled at by consumers who thought we were selling their information (even though the disclosure clearly says "we do not sell..."), we're still at the tip of this iceberg. The fun has only just begun, guys.

Now we get to pull every contract in the bank to see who has a privacy agreement. And we get to go out and get agreements where we don't have one. But from who...the telephone company, software vendor, janitors, appraisers, termite companies, closing attorneys...WHO? And who executed that contract yesterday? Why doesn't it have a confidentiality agreement? We're out of compliance already!!

Then comes final FCRA rules and rewriting, and remailing, and our regulatory exam.

I think I'll start honing new skills for my next life..Would you like fries with that?

I too am a compliance officer for a community bank, and I too must admit my frustration as well. Mine stems from a variety of issues. First-Privacy, the time spent on creating our Privacy Policy, creating the Privacy Disclosures,all of the seminars and time spent away from the bank learning about this bill, then PAYING thousands of dollars for the disclosures that noone cared about, then to perform mass training to our employees explaining to them that our policy requires that we do not share NPI - which they all know we have never done - so why meet about it?, on to information security - I am faced with explaining to executive management that we are going to have to spend MORE MONEY to buy a new filing system so that our signature cards which are nowhere NEAR public access can be "SECURED"- ,the fact that we have to obtain confidentiality agreements from service providers that have performed services for our bank for years! And have any of you tried to obtain a SAS 70 from the large Service providers? Thats a joke! Our employees are now paranoid about performing many functions of their jobs for fear of violating a customers privacy rights. I get calls from employees just wanting an affirmation that what they are doing is right....I think that this legistlation hurt the credibility of banks and their ability to protect their customers information. We have been doing it safely, soundly, and efficiently for years...now the public hears about how we need governing on how to do this. If I weren't in the business, I might wonder why too! This is just my opinion!

When adding up GLB's "blessings" to the banking industry, let's not forget the repeal of a bank's blanket exemption from the securities laws definition of "broker-dealer". Under GLB's so called "push-out" rules, we will now be regulated by the SEC with regard to any brokerage activity we may undertake on behalf of a customer regardless whether the particular brokerage activity has been traditionally considered to be exempt from SEC supervision. After May of next year, there will be a limited list of specific exemptions determined by, you guessed it, the SEC. The SEC's initial "interim rules", released in May, were so onerous - especially with respect to bank trust & fiduciary activities - that even our beneficent bank regulators joined in the howl -actually to preserve their own turf, but let's not quibble over minor points. So after Privacy (July 2001) and Consumer Insurance Protections (October 2001), some of us can look forward?? to the SEC joining the party next May. More blessings like GLB, and we can close the doors folks! Does anyone have any Malox?

You know....I have come to the conclusion that maybe our lawmakers do want banks to close their doors. It appears that way at least from actions they have taken to push us out of business.

Internal Audit schedule? What schedule? Oh but, my audit schedule is shot to h---.
You see Mr. Safety and Soundness Examiner, I've been spending my time working with Management on GLB, and Internet compliance. Expensive, you ask? OH YES! Just like Y2K (What a nightmare, and let's not forget the expense), TISA, BSA, CRA, etc., etc., etc.

AND let's not forget training and overburdening supervisors and staff with more and more regulatory nonsense, because it never ends. So, as paranoia sets in, more and more is expected from them. And so community banks strive to compete with larger financial institutions, not only for customers, but for employees because keeping staff is a constant struggle. Why? because everyone wears more than one hat in a small, and so overwhelmed and fraustrated, we lose them to the bigger banks for a few dollars more and possibly less stress.

GLB and other regulatory complince expensive? You better believe it...notices, new locks, storage, new cabinets, training, my valuable time and all involved, etc, etc. etc. You bet, banks definately take it on the bottom line complying with ridiculous regulatory requirements. Not to mention, helping the federal government fight the war against drugs (I feel like we should be deputized); providing consumers with an opportunity to shop for service (why, the average consumer needed Congress' help to shop for service. PLEASE!); disclosures for every this and that; ensuring everything is promptly "documented" to prove to regulators the bank is INDEED following the letter of the law, etc.

I agree ensuring customer confidentiality is good, BUT banks have always been aware of such. OH YES, GLB really, really is annoying and burdensome. Do the customers care? Who knows, we've had no feedback. As for job security, believe me, we, "compliance professionals", could well be spending our valuable experience on other more productive issues. By the way, what we are all feeling about now is almost impossible to say in a few words. So, as I continue to ensure my bank gets right, venting sure makes me feel better already. Thanks for the opportunity.

Reading all of the responses to Bonnie's initial thread sure is rewarding. Now I know that there are others in the world who need a vacation from complying......

I'm with Brenda. Honing in on new skills sounds great. When I grow up, I want to be the greeter at Wal-Marts?

I actually received a phone call from a customer who said I had better read my local newspaper because obviously I didn't understand the regulation. He was mad because he didn't receive anything to sign so he could opt out. WE DON'T SELL INFORMATION!!!!!

In my oh-so-sweetess voice I would say "We went ahead and opted out for you so you don't need to. That's just part of our wonderful customer service. Is there anything else we can help you with?"