CFPB Relaxes Rules Governing Privacy Disclosures

10/20/2014

The Consumer Financial Protection Bureau (“CFPB”) announced today that it would allow financial institutions to provide their privacy notices to consumers online and would no longer require annual distribution of paper copies, provided that the institutions meet certain requirements. Among other things, companies that rely on this new exemption (1) must not share data in ways that would trigger consumers’ opt-out rights (e.g., by sharing with unaffiliated third parties), (2) must use the model disclosure form developed by the federal regulatory agencies in 2009, and (3) must annually notify customers that their privacy notices are available online. The notification may be included in a regular communication, such as a monthly billing statement. The CFPB stated that it anticipates that this new rule will save regulated entities money and allow consumers constant access to privacy policies. For additional information, please see here.

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