On Monday, the Consumer Financial Protection Bureau (CFPB) finalized a rule which creates an alternative delivery method for annual privacy notices by allowing financial institutions to continuously post their annual privacy notices online in a clear and conspicuous manner instead of delivering paper copies via regular mail. Currently, financial institutions are required to provide annual privacy disclosures to consumer customers as mandated by the Gramm-Leach-Bailey Act (GLBA). The disclosures are meant to provide customers with information regarding the institution’s policies on sharing personal customer information and allow customers the right to opt out of these sharing practices.
The purpose of the new rule is to promote more adequate privacy disclosures that can be accessed at any time by customers while reducing postage costs, paper, and printing fees incurred by financial institutions. However, in an effort to assist customers who may have limited or no internet access, financial institutions must mail annual notices to customers who make that request.
Financial institutions who wish to take advantage of the alternative delivery method must meet the following criteria:
- There are no opt-out rights triggered by the financial institution’s information sharing practices under the GLBA or the Federal Credit Reporting Act (FCRA);
- Any opt-out notices required by the FCRA have previously been provided or the annual privacy notice is not the only notice provided to satisfy those requirements;
- The information included in the privacy notice has not changed since the customer received the previous notice; and
- The financial institution uses the model form provided in Regulation P as its annual notice.
If a financial institution does not meet these criteria, it may not use the alternative delivery method for its annual privacy notices and must use one of the standard delivery methods.
The rule, which was originally proposed in May, will take effect upon publication in the Federal Registrar.
You can read the final rule here.