December 22, 2015

CFPB responds to Berger on privacy notices

CFPB responded to NAFCU President and CEO Dan Berger's call to swiftly implement statutory changes to privacy notice requirements for credit unions, saying the bureau agrees and that the new law will be effective immediately to avoid confusion with superseded requirements.

"We appreciate CFPB's speed on this matter and its willingness to clarify an area of regulatory confusion for credit unions," said Berger. "Now that CFPB has heeded NAFCU's call to recognize the recent amendments as controlling law on privacy notices, credit unions will have a measure of regulatory relief and be able to avoid the unnecessary costs and labor of annual privacy notices. This is a big win for our members."

In his letter last week, Berger wrote that the bureau should "act swiftly to implement these statutory changes and clarify the controlling law through a formal announcement or the promulgation of an interim final rule."​

Responding to NAFCU, a CFPB spokesperson said, "The CFPB recognizes that the recent statutory change on annual privacy notice requirements became effective upon the transportation bill's enactment. The Bureau has begun working with our fellow regulators to coordinate on a process to discuss further each agency's plans for rulemaking in this area given the statutory changes. In the meantime, the Bureau is conveying to its supervision and enforcement staff that the law is effective immediately so that no financial institution is expected to comply with superseded regulatory requirements."

The NAFCU-backed relief measures on privacy notices were signed into law by President Barack Obama earlier this month as part of a transportation authorization bill. The law will clarify that consumers will receive privacy notices after opening a new account and when their providers' privacy policies change – a change from the previous annual-notice requirement.

NAFCU emphasized in its letter that the changes under the Gramm-Leach-Bliley Act should be considered the controlling law, but urged more clarity from CFPB.