July 14, 2014

Adjustments to CFPB privacy notice rule urged

July 15, 2014 – NAFCU supports CFPB's proposal to allow an alternative delivery method for annual privacy notices under Regulation P but urged the bureau Monday to make adjustments to improve the proposal's clarity and enhance the regulatory relief it is meant to provide.

The proposed rule would, under certain conditions, permit a credit union to post its privacy notice online instead of mailing it, helping to advance a key objective of NAFCU's five-point plan for regulatory relief for credit unions. CFPB's proposed conditions include, among others, that the annual notice isn't the only means of satisfying notification requirements of the Fair Credit Reporting Act; and that the credit union doesn't share members' nonpublic personal information in a manner that triggers opt-out rights under the Gramm-Leach-Bliley Act.

NAFCU Regulatory Affairs Counsel Alicia Nealon, in a comment letter, said the association supports the bureau's proposal to allow notices to be made available on credit union websites as well as by mail when requested. However, she suggested the following improvements:

  • clarify that institutions may modify Reg P's model notice;
  • except credit unions that don't already have toll-free phone lines from a requirement to maintain one so consumers can request paper notices; and
  • remove the stipulation that institutions "continuously" post their privacy notices on their websites.

Nealon said a requirement on continuous posting could open a credit union to frivolous claims if, for example, a website is down for any period of time.