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. NAFCU supported legislation that would eliminate the disclosure notice has passed the House on multiple occasions over the past few years. Substantially similar legislation has been reintroduced in the 114th Congress.

  • Eliminate Privacy Notice Confusion Act (H.R. 601): This legislation, identical to what passed the House in the 113th, was re-introduced in the House on January 28, 2015 by Reps. Blaine Luetkemeyer (R-MO) and Brad Sherman (D-CA). The bill was agreed to by the House with a voice vote under suspension of the rules on April 13, 2015. The bill would eliminate the unnecessary, redundant and costly nnual privacy notice requirement for an institution that:

    -          Do not share information with non-affiliated third parties; and

    -          Do not change its privacy policy from the last time it was disclosed

    • The Privacy Notice Modernization Act of 2015 (S.423) was introduced in the Senate on February 10, 2015 by Sens. Jerry Moran (R-KS) and Heidi Heitkamp (D-ND). This language was included as part of the Financial Regulatory Improvement Act of 2015 which was marked-up and agreed to in the Senate Committee on Banking, Housing, and Urban Affairs on May 21, 2015. The bill would eliminate the unnecessary, redundant and costly annual privacy policy notice requirement for an institution that:

      -          Does not share information with non-affiliated third parties; and

      -          Does not change its privacy policy from the last time it was disclosed; and

      -          Otherwise provides customers access to such most recent disclosure in electronic or other form permitted by regulation.

    NAFCU’s legislative team is working hard to encourage the Senate  pass the legislation and have it signed into law.

      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 April 2015