An employee is jointly employed by a bank and an unaffiliated investment company. This employee will sell both deposit / loan accounts for the bank as well as investment products for the investment company from the bank premises. The Reg P definitions say a "nonaffiliated third party means any person except a person employed jointly by you and any company that is not your affiliate."

This person will have access to bank customer records in order to sell the bank's products. Are there any privacy issues with them having this access since they are also employed by the investment company? There is no joint marketing agreement at this time.

Should we have the employee sign something stating that they understand any information provided to them in their capacity as a bank employee cannot be shared with the investment company or used to solicit business for the investment company?

As a consumer - HECK YEAH!!!

As a banker - I don't know where the law / regs stand on this.

Not the most useful post, but I think sometimes we should go above and beyond the requirements for customer service.

Ok, I'll get off the pulpit now.

We have several dual employees. They are trained to disclose over and over again to customers that they are 'changing hats' as they transition between talking bank products and talking investment products. They also emphasize that the information they are privy to on the bank side is never used by the investment side without their prior permission.

What about having customer information exp ITI on his/her computer. Does this cause any problems. Our Dual Employee uses someone elses computer to look up the information. So what is the difference?? If this sounds weird.. its cause i am sick, but working.

Depending on what the dual employee does besides sell non-deposit investment products, they probably need access to information on their computer. In the past, we've had employees jumping from one desk/office/computer to another, but that's getting less and less efficient and feasible.

I don't think it's a problem, as long as, again, the employee emphasizes to the point of overkill with the customer, the differences.

Hope you're feeling better soon!

Thanks,

The access to and use of cutomer information whether it is on the bank side or on the unaffiliated investment company, I would think should be covered in the third-party marketing agreement and in the dual-service agreement with the employee.

If you don't have these agreements, I would be following up on that first. The content of those agreements likely will hold the answers to your privacy questions. Or at least its a place to start.

Our dual emplyee works for our bank and an ivestment firm. I was informed that she can not have acess to our customer information on her computor... Yes or No

The investment firm.. one of our employees went for traing to help her(the dual employee) out. She came back saying that our dual employee can not have the information. I thought as long as she switched hats it was ok??

We also have employees that work for the bank and as an agent of our unaffiliated investment company. There is no joint marketing agreement because there is no joint marketing. When the employee is taking a loan application, that person is a bank employee. When the same person is selling an annuity, they are functioning as an agent of the investment company. You can't make that employee "un-know" what they know about the customer from the bank side, but there is no "sharing" of information because the customer is giving the information willingly to the bank employee or the investment employee or both.
As far as the computer is concerned, our investment agent would not be using the computer to look anything up about the customer without that customer's consent. As someone mentioned earlier in this post, we disclose, disclose, disclose. The "dual employee" has two business cards and must make it very clear what "hat" they are wearing. If the same desk is used, as it often is, the FDIC sign goes in the drawer and the SIPC sign comes out. As far as Privacy is concerned, and long as the employee isn't self-referring without the client'permission and the client is knowingly giving their non-public personal information to both the investment employee and the bank employee, I see no privacy concerns.
Leslie

Let me refer you to the Interagency Q&As on the Privacy Regulations issued in December 2001 (FDIC FIL-106-2001). Question J.4 reads: Iam a bank. I have a financial advisory center on my premises that is shared by people employed both by me and by an insurance company. The shared employees do not sell bank products. They sell insurance products and services offered by the insurance company pursuant to a third-party agrrangement. We provide the employees with information about our customers so that they may solicit our customers on behalf of the insurance company. Do we have to provide our customers with an opportunity to opt out of these disclosures?
Answer: You must provide a reasonable opportunity for your customers to opt out of any disclosure of their nonpublic personal information to a nonaffiliated third party unless one of the exceptions applies. Although a dual employee himself or herself is not a "nonaffiliated third party," providing customer information to a dual employee for purposes of marketing the insurance company's products and services to your customers is deemed to be providing the information directly to the insurance company. Because the insurance company is a nonaffiliated third party, you must provide your customers a reasonable opportunity to opt out of disclosure of their nonpublic personal information prior to disclosing such information to the dual employees unless the disclosure is covered by an exception.
The exception for a joint marketing arrangement contained in Section 13 specifically permits you to disclose nonpublic personal information about your customer to the nonaffiliated insurance company without providing the customer an opportunity to opt out if the three requirements in the section are met. In addition to those requirements, the prohibition against disclosing a consumer's account number for use in telemarketing, direct mail marketing, or other marketing through electronic mail, as set forth in Section 12, applies to your arrangement with the insurance company.
(Please note that I summarized the requirements for Section 13 for brevity)

Leslie,

I'm trying to understand where the line is. You say that when taking a loan application, the dual employee is working for the bank. When selling an annuity, the dual employee is working for the investment company.

If John Doe walked in off the street, sat down, and said "I've got $50,000 that I would like to invest. What are my options? I don't and won't have an immediate need for the money." Who is that dual employee going to represent?
a) the bank in talking about CDs; or
b) annuities

On your loan example, I think you can make a clear distinction. In other instances, like the example above, I think the line becomes much more difficult to define. It is those types of instances that the joint marketing agreement (that's what we internally refer to it as - at your institution maybe you call the contract with the investment company something else.) can help clarify.

The contract, by whatever name you call it, can define the compensation or commissions that the dual employee receives if they are being compensated by the investment company. If the dual employee is not being compensation by either commission or salary by the investment company, then there surely the bank is receiving something from the investment company.

The contract will also define whether the investment company paying any percentage of overhead, and expenses and if so how much. Or speak to advertising and who is going to pay for what, especially when the advertising talks about such and such product available from the XYZ Investment Representative located at ABC Bank.