|For immediate release|
The Federal Reserve Board today voted to request comment on a new regulation implementing the privacy provisions of the Gramm-Leach-Bliley Act.
Regulation P (Privacy of Consumer Financial Information) would apply to institutions regulated by the Board, including bank holding companies, financial holding companies, state-chartered banks that are members of the Federal Reserve System and uninsured state-chartered U.S. offices and branches of foreign banks.
The proposed rule is a result of an interagency effort by the Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration, the Department of the Treasury, the Securities and Exchange Commission and the Federal Trade Commission. The agencies also consulted with the National Association of Insurance Commissioners. The Board believes the other agencies will propose rules substantially similar to the Board's.
The privacy provisions of Gramm-Leach-Bliley enable consumers to prevent a financial institution from disclosing nonpublic personal information to third parties that are not affiliated with the financial institution. The provisions do not restrict the disclosure of nonpublic personal information among affiliated companies or of information about businesses and corporations.
Under Gramm-Leach-Bliley, before a financial institution may disclose nonpublic personal information to a nonaffiliated third party for marketing and certain other purposes, it must provide a description of its privacy policies and an opportunity for consumers to opt out of the disclosure. In addition, a financial institution must provide initial and annual notices of its privacy policies to consumers with whom it establishes a customer relationship.
The Board's proposed regulation implements these requirements by defining "nonpublic personal information," "consumer," and "customer" and by providing guidance on the timing of notices to customers and the means by which consumers can exercise their opt-out rights. The proposed regulation also contains other provisions designed to clarify the requirements of the Act.
A draft of the proposal and a memorandum by Board staff pertaining to it are available on the Board's public Web site at: http://www.federalreserve.gov/boarddocs/meetings/2000/20000203/OpenMemos.htm
A completed version of the Board's proposal will be published in the Federal Register when ready. Comment is requested by March 31, 2000.
2000 Banking and consumer regulatory policy