Annual Privacy Disclosure Notices

Privacy disclosure notices are required to be sent annually to members from credit unions and a wide variety of other businesses. The following legislation related to privacy disclosure notices was introduced in past Congresses:

  • Privacy Notice Modernization Act (S. 635): On March 21, 2013, Senators Sherrod Brown (D-OH) and Jerry Moran (R-KS) introduced the Privacy Notice Modernization Act (S. 635), a substantially similar version of the House bill (H.R. 749). The bill currently has over 60 bipartisan cosponsors including Senate Banking Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID). NAFCU lobbyists are working to gain momentum on the legislation.
  • Eliminate Privacy Notice Confusion Act (H.R. 749): This bill was re-introduced in the House at the beginning of the 113th Congress by Reps. Blaine Luetkemeyer (R-MO) and Brad Sherman (D-CA). On March 12, 2013, the House passed H.R. 749 by voice vote. The same day, NAFCU sent a letter to the Senate urging immediate action and is lobbying to make sure that the legislation is addressed as soon as possible.
  • H.R. 5817: At the end of the 112th Congress, the House passed legislation (H.R. 5817) by unanimous consent that would have eliminated the unnecessary, redundant and costly annual privacy policy notice requirement for an institutions that:
    1. Do not share information with non-affiliated third parties; and
    2. Do not change its privacy policy from the last time it was disclosed.

NAFCU is working hard to gain momentum in the 114th to get similar legislation introduced and passed.

    NAFCU's Position on Privacy Disclosure Notices

    In May 2014, the Consumer Financial Protection Bureau (CFPB) proposed a rule containing many of the same elements NAFCU has sought on the legislative front. The CFPB proposal would allow financial institutions to post their annual privacy notices online instead of delivering them individually if they meet a series of conditions including not sharing the customer's nonpublic personal information with nonaffiliated third parties. While this is certainly a positive development, NAFCU will continue to push for statutory changes to the law.

    Ensuring credit unions don't need to send redundant privacy notice disclosures in one aspect of NAFCU's five-point plan for regulatory relief. NAFCU will continue to monitor this issue.

    Issue Background Information

    The Gramm-Leach-Bliley Act (P.L. 106-102), enacted in 1999, requires financial institutions and a wide variety of other businesses to issue privacy disclosure notices to consumers that detail the institution's privacy policies if it shares customers' non-public personal information with affiliates or third parties.

    Some additional requirements of the law include:

    • Existing and potential customers must be told of their right to opt out of sharing non-public personal information with third parties.
    • Such disclosures must take place when a customer relationship is first established and annually in paper form as long as the relationship continues even if no changes have occurred.

    This Gramm-Leach-Bliley Act would help eliminate the confusion by exempting institutions whose policies have not changed from this outdated requirement.

    The privacy notice, for most institutions, is readily available for view online, as well as available at branch locations for consumers to acquire if they so wish. The exception will allow credit unions to focus their resources on providing low-cost financial services to their members without disturbing consumer privacy policy availability. The staff resources and money wasted to send the required notice to millions of credit union members every year are resources that could better serve members elsewhere.

    As many institutions and consumers are earnestly attempting to "go green" the current requirement stands in stark contrast. The exception would save credit unions valuable staff resources, lower the cost of financial services, and reverse the negative environmental impact caused by such a requirement, while not harming consumers.

    Recent Policy Letters

    Read recent letters from NAFCU to members of Congress on key annual privacy disclosure notices issues that affect credit unions and their members.

    10-29-2013 NAFCU letter urging action on S. 635

    03-12-2013 NAFCU urging action on H.R. 749

    12-12-12 NAFCU letter to Senate urging action on H.R. 5817

    12-3-12 Boehner-Pelosi letter in support of H.R. 5817

    View all NAFCU Policy Letters

    Updated January 2015