Act FAST! Evaluate Your Privacy Policy (Again)—CFPB Finally Issues Final Rule Providing Exception to Annual Notice Requirement

Consumer Finance Blog Aug 29, 2018 Tampa, FL

By: Ashley Elmore Drew, Esq. and Jacob Boehner, Esq.

This has been an exciting year in the world of privacy law! With the European Union breaking new ground with the General Data Protection Regulation, California following close behind with the passage of the California Consumer Privacy Act, and Vermont amending its rules, the compliance officers and lawyers of the world are hard at work parsing the voluminous codes, attempting to ascertain applicability and operationalization. Not to be outdone, the Consumer Financial Protection Bureau (“CFPB”) caught up to its 2015 mandate and finally published the final rule amending Regulation P, which implements the Gramm-Leach-Bliley Act (“GLBA”). Back in 2015, the Fixing America’s Surface Transportation Act (“FAST Act”) amended the GLBA, providing for the exception and requiring the CFPB to promulgate a corresponding rule. The new rule becomes effective September 17, 2018.

Under the CFPB’s new rule, financial institutions do not have to send an annual privacy notice where: (1) the financial institution only shares nonpublic personal information (“NPI”) with nonaffiliated third parties to the extent that it does not trigger consumer opt-out rights under the GLBA; and (2) the financial institution has not changed its policies and procedures related to disclosing NPI from the most recent version of the privacy notice sent to customers. Further, the rule provides timeframes by which financial institutions that no longer qualify for the exception must provide updated notice. Where a formerly-qualified financial institution subsequently amends its privacy policies in such a way that requires it to provide a revised policy to customers and it no longer qualifies for the exception, the revised notice will be treated as an initial notice and the institution may resume providing the annual notice from then on. However, if the formerly-qualified financial institution changes its policies such that it is no longer qualified, but not to the extent that it is required to provide a revised privacy notice, the institution must deliver the annual notice within 100 calendar days of the change in policy.

Because a financial institution that meets the conditions for alternative delivery methods will meet the conditions for the exception in the final rule, the CFPB has removed section 10169(c)(2), eliminating the alternative delivery method for annual notices. In footnote 30 of the final rule, the CFPB states that a financial institution will not jeopardize the availability of the exception by providing a privacy notice to a consumer, such as upon the consumer’s request. This is good news for organizations that look to take a measured approach to change.

It is more important than ever for financial institutions to implement and maintain a consistent change management protocol. With the state privacy laws changing rapidly, financial institutions should closely evaluate the latent consequences of altering their privacy notice procedures.

For more information, please reach out to Ashley Elmore Drew at Ashley.ElmoreDrew@gmlaw.com or Jacob Boehner at Jacob.Boehner@gmlaw.com

*The information in this article is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Greenspoon Marder LLP or the individual author(s), nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.

About Greenspoon Marder

Greenspoon Marder is a national full-service business law firm with over 200 attorneys and offices across the United States. We are ranked among American Lawyer’s Am Law 200, as one of the top law firms in the U.S. since 2015. Our firm was founded with the goal of providing the highest quality legal services at the highest value for our clients. Each of our clients is unique and so are their legal needs. We believe no one size fits all for professional services. Our lawyers offer flexible and creative solutions to meet our clients’ respective needs. Our mission is to understand the challenges our clients face, build collaborative relationships and craft solutions with a focus on strategic goals.

MEDIA CONTACT
Natalie Villanueva, Director of Marketing
954.333.4308 | natalie.villanueva@gmlaw.com

This Greenspoon Marder LLP Client Alert is issued for informational purposes only and is not intended to be construed or used as general legal advice nor a solicitation of any type. Please contact the author(s) or your Greenspoon Marder LLP contact if you have any questions regarding the currency of this information. The hiring of a lawyer is an important decision. Before you decide, ask for written information about the lawyer’s legal qualifications and experience.

Next Previous

Consumer Finance Blog

Act FAST! Evaluate Your Privacy Policy (Again)—CFPB Finally Issues Final Rule Providing Exception to Annual Notice Requirement

Share

Subscribe to our
Consumer Finance Blog

News & Events

News & Events

Consumer Finance Blog

Act FAST! Evaluate Your Privacy Policy (Again)—CFPB Finally Issues Final Rule Providing Exception to Annual Notice Requirement

Share

Subscribe to our Consumer Finance Blog

News & Events

News & Events

Subscribe to our
Consumer Finance Blog