Gramm-Leach-Bliley Act Compliance: Model Privacy Notice Form
Under the Gramm-Leach-Bliley Act (“GLB”), financial institutions are required to disclose their information-sharing practices to their customers and also to notify them of their right to opt out of certain practices. As amended by the Financial Services Regulatory Relief Act of 2006, GLB also requires that certain regulatory agencies develop a model privacy notice form. This form will assist consumers in comparing the different information and privacy practices of financial institutions by providing an inclusive form that is consistent across all institutions.
On November 17, 2009, the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Securities and Exchange Commission jointly issued a final model privacy notice form under GLB. The final model privacy notice form comes in two versions: (1) a version containing opt-out language in a section titled “To limit our sharing,” and (2) a version without opt-out language.
By using the appropriate final model privacy notice form, financial institutions can comply with the GLB notice and disclosure requirements. Under the final rule promulgated by the regulatory agencies, use of the model form functions as a “safe harbor” such that any financial institution correctly using the appropriate model form will satisfy the notice and disclosure requirements.
While the model form provides a safe harbor, financial institutions can continue to use their own notice form so long as it complies with the final rule. If a financial institution elects to use the model form, that institution must determine whether or not their information-sharing practices necessitate the use of the opt-out model form. Accordingly, financial institutions should seek the advice of privacy personnel and legal counsel to determine if switching to the model form is the right decision for their business and, if so, which version applies.
