Federal Agencies Issue Model GLBA Privacy Form

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The federal banking agencies and the CFTC, FTC, NCUA and SEC (“Agencies”) have issued a final rule amending their privacy rules under Title V of the Gramm-Leach-Bliley Act (“GLBA”). The purpose of the amendments is to provide a model privacy form that financial institutions may use to describe their privacy policies and to provide consumers with the opportunity to opt out of the sharing of information with nonaffiliated third parties, as required by the GLBA.[1] The model privacy form also addresses relevant opt outs under the Fair Credit Reporting Act (“FCRA”) relating to the sharing of information with affiliates. The model privacy form, which had been under development for several years, is similar to the form proposed by the Agencies on March 29, 2007, with modifications to address comments received on the proposal. The Agencies believe that the model privacy form is easier to understand and use than most forms currently used by financial institutions. While use of the model privacy form is not required, a financial institution that uses the form (consistent with instructions included in the rule) will be deemed in compliance with the GLBA notice content requirements for privacy policies and opt-out notices.

As described below, the final rule provides numerous detailed requirements for how the model privacy form must be presented and what information must be included in the model privacy form. The final rule will become effective on December 31, 2009. In addition, the Agencies have eliminated the safe harbor from the existing sample clauses included in the GLBA privacy rules effective December 31, 2010.

Please see full update below for more information.

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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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