FRB Proposes to Repeal Regulations P and DD and Amend Regulation V

The FRB issued a Notice of Proposed Rulemaking to repeal its regulation implementing the Truth in Savings Act, Regulation DD, and the regulation implementing the provisions of the Gramm-Leach Bliley Act protecting the privacy of consumer financial information, Regulation P. TISA and Regulation DD are intended to assist consumers in comparing deposit accounts offered by depository institutions by requiring disclosure of fees, the annual percentage yield, the interest rate, and other account terms. The relevant provisions of GLBA limit the circumstances in which a financial institution can disclose nonpublic personal information about a consumer to nonaffiliated third parties and require financial institutions to provide certain privacy notices to their customers who are consumers. The Dodd-Frank Act transferred rulemaking authority for Regulation DD and Regulation P from the FRB to the CFPB, and in December 2011, the CFPB issued interim final rules establishing its own Regulation DD and Regulation P that were substantially identical to the FRB’s regulations. Of note, under the Dodd-Frank Act, the FRB retained authority to issue regulations implementing the Truth in Savings Act for certain motor vehicle dealers. However, the FRB “is not aware” of any motor vehicle dealers that engage in activities subject to TISA. Comments to repeal Regulation P must be received by April 15, 2014.

The FRB also issued a Notice of Proposed Rulemaking to amend its Identity Theft Red Flags Rule, which implements the provisions of the Fair Credit Reporting Act that require, among other things, each financial institution and creditor that holds any consumer account or other account for which there is a reasonably foreseeable risk of identity theft, to develop and implement an identity theft prevention program in connection with new and existing accounts. The proposed rulemaking follows the enactment of the Red Flag Program Clarification Act of 2010, which added the definition of “creditor” that was specific to the Identity Theft Red Flags Rule. The Act narrowed the definition of “creditor” and excluded from the definition, creditors that advance funds on behalf of a person for expenses incidental to a service provided by the creditor to that person. The proposed rule would provide that “creditor” has the same meaning as in the Act.

IRS Circular 230 Disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this informational piece (including any attachments) is not intended or written to be used, and may not be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Topics:  Federal Reserve, Gramm-Leach-Blilely Act, Regulation DD, Regulation P, Regulation V, Truth in Savings Act

Published In: Consumer Protection Updates, Finance & Banking Updates, Privacy Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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