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News Now

Washington
Annual disclosures burden consumers FIs CUNA
WASHINGTON (2/22/12)--Sending an annual privacy notice to every consumer with whom a financial institution has a continuing relationship is confusing to the consumer and costly and burdensome to the financial institution, the Credit Union National Association CUNA) told the Consumer Financial Protection Bureau (CFPB).

Commenting on a CFPB interim final rule on Regulation P, which requires the annual disclosures, CUNA wrote that when credit union members or bank customers receive the same, unchanged information from their institution on an annual basis, they may forego reading an actual notice of change when it arrives in the mail.  They could be lulled into an assumption that the change notice is just another routine disclosure.

CUNA asked the CFPB to remove the annual requirement from Reg P, instead replacing it with a requirement that a new notice be sent only when there is a change in the institution's privacy policy. This would not affect a financial institution's existing responsibility to provide a privacy notice at the time the member/customer relationship is commenced.

An equally important reason to remove the requirement, CUNA underscored in its letter, is to "help to relieve the regulatory burden on financial institutions."

CUNA stated, "This is particularly true for small institutions for which mailing an annual privacy notice is often costly, posing a significant regulatory burden."

CUNA encouraged the CFPB to seek, if needed, statutory authority to remove the annual disclosure requirement.


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