Introduction
On December 1, 2009, the Federal Trade Commission (“Commission”), together with seven other federal agencies, published in the Federal Register amendments to the rules implementing certain privacy provisions of the Gramm-Leach-Bliley Act (“GLB Act”) and adopting a model privacy form.
The GLB Act and the Commission’s Privacy Rule, 16 CFR Part 313, require certain “financial institutions” to provide initial and annual privacy notices to their customers. These financial institutions include, but are not limited to, mortgage lenders, finance companies, mortgage brokers, auto dealers, check cashers, “pay day” lenders, wire transferors, collection agencies, credit counselors and other financial advisers, tax preparers, and providers of real estate settlement services (“FTC regulated entities”).
These notices must describe the entities’ information collection and sharing practices and inform customers of their right to opt out of certain of these practices. The model privacy form is designed to make it easier for consumers to understand how financial institutions collect and share their personal financial information and to compare different institutions’ information practices.
FTC regulated entities may rely on the model privacy form as a safe harbor to comply with these disclosure requirements.
The Commission also is eliminating the safe harbor associated with the use of notices that incorporate the sample clauses in the Privacy Rule.
The amendments were effective December 31, 2009, except for the amendments eliminating the sample clauses and associated safe harbor; those become effective for notices sent after December 31, 2010.
