The Bureau of Consumer Financial Protection has finalized a change to Reg. P that may provide some relief to credit unions. The rule change implements an amendment to the Gramm Leach Bliley Act passed by Congress in the FAST Act in 2015. Essentially, the changes allow financial institutions to be exempted from sending an annual privacy notices if they meet certain conditions.
The conditions that need to be met are twofold. First, the credit union must not share nonpublic personal information about members (the rule has a few exceptions to this). Second, the institution’s policies and procedures regarding the disclosure of nonpublic personal information must not have changed since the most recent privacy notice was sent.
In the event the credit union changes its policies and procedures and triggers the requirement to send out a revised privacy notice, the credit union must initially send out the revised privacy notice prior to the change in policy taking effect. The credit union then must send out an annual notice by Dec. 31 (if the defined period is a calendar year) of the year following the delivery of the revised privacy notice.
If a credit union simply changes its policies and procedures in a manner than does not trigger a revised privacy notice, it must deliver an annual privacy notice within 100 days of the changes in the policies and procedures.
While most credit unions do not share nonpublic personal information to third parties, for those that do, this change may result in savings from the reduced cost of sending notices to members. You can review the whole of Reg P. here. Note that the new changes aren’t incorporated in this document but are linked above where they will be incorporated.
It’s important to note that these changes do not alter a credit union’s obligations to deliver initial disclosures under GLBA or those under the Fair Credit Reporting Act. The effective date for this rule change is Sept. 17, 2018. Please contact LSCU Director of Regulatory Advocacy, Governmental Affairs Mike Lee if you have any questions on this rule change.