The WBA filed the following comment letter on behalf of the industry. Below is the text of the comment letter which WBA members are welcome to use for their own letters.


August 8, 2016

VIA EMAIL

Ms. Monica Jackson, Executive Secretary
Bureau of Consumer Financial Protection
1700 G Street NW.,
Washington, DC 20552
Docket Number: CFPB–2016– 0032
www.regulations.gov

Re:    Annual Privacy Notice Requirement Under the Gramm-Leach-Bliley Act (Regulation P); Docket Number: CFPB–2016–0032

Dear Ms. Jackson,

The Wisconsin Bankers Association (WBA) is the largest financial trade association in Wisconsin, representing approximately 270 state and nationally chartered banks, savings and loan associations, and savings banks. WBA appreciates the opportunity to comment on the Bureau of Consumer Financial Protection's (Bureau's) proposal to amend Regulation P.

WBA recognizes that the Bureau's proposed amendment would implement the exemption from the annual privacy notice requirements to the Gramm-Leech-Bliley Act (GLBA) made by the Fixing America's Surface Transportation Act as implemented through Regulation P. WBA appreciates the proposed amendment's clarification of timing requirements when the exemption is lost and the elimination of the alternative method for delivery of the annual privacy notice, as doing so removes any confusion of having both an exemption from the annual privacy notice and an alternative to the delivery requirement. 

While WBA acknowledges the benefit of the proposed amendment, we would also like to take this opportunity to respond to the Bureau's request for comment in two areas. Specifically, WBA appreciates the opportunity to comment regarding disclosures of information to affiliates and potential harm to consumers.

In order to meet the exemption to the annual privacy notice, information provided under 1016.5(e)(1)(ii) may not change. The Bureau seeks comment on whether this information should include the disclosures of information to affiliates required by 1016.6(a)(7) and the Fair Credit Reporting Act (FCRA). The Bureau also asks whether changes to disclosures that are not required to be included in privacy notices by the GLBA or 1016.6 should cause an institution not to satisfy proposed 1016.5(e)(1)(ii). WBA believes such changes should not deem the institution to be non-compliant. When Congress eliminated the requirement for an annual privacy notice for financial institutions that meet the required two conditions the intention was to eliminate unnecessary disclosures. WBA believes that it would be costly and burdensome upon financial institutions to add additional, unnecessary disclosures which in turn would result in additional fees passed on to consumers.

To avoid additional costs and burden, WBA requests that financial institutions be afforded flexibility in choosing to include those disclosures outside of the scope of 1016.5(e)(1)(ii), such as FCRA affiliate notices, in their privacy notices or provide them separately. The privacy notice is intended for consumers to receive disclosures related to bank practices with regard to the disclosure of nonpublic personal information. Financial institutions provide disclosures unrelated to the disclosure of nonpublic personal information as required by separate regulatory requirements, and through customer service. WBA believes that the exemption requirements should remain within the scope of the disclosure of nonpublic personal information in order for financial institutions to benefit from the exemption, rather than face doubled disclosure requirements which may confuse consumers by providing redundant information.

Additionally, the Bureau analyzed potential benefits and costs to consumers and observed that any potential impact would depend on whether a given consumer prefers or would otherwise benefit from receiving an annual privacy notice that does not offer an opt-out and is largely unchanged from previous notices. The Bureau anticipates that many institutions would decide not to provide notices when meeting the exemption included in the proposed amendment. WBA believes that many financial institutions will appreciate and take advantage of the exemption, but it will not create additional costs or harm to consumers. 

Respectfully, we believe that while the Bureau regulates many large institutions, the Bureau may not be familiar with the practices of smaller financial institutions. Our financial institutions and bankers do not operate in a vacuum, and bankers are happy to discuss and answer any question for consumers, including practices related to the disclosure of nonpublic personal information. For consumers who would prefer or otherwise benefit from receiving the annual notices, it would be no more difficult to contact their banker or visit their local branch to obtain such information. The Bureau expresses concern that financial institutions may use less effective methods to convey opt-out rights under section 624 of the FCRA when deciding not to provide annual notices. WBA does not believe that the proposed amendment will result in less effective disclosures required under the FCRA if they are not incorporated into annual privacy notices. For example, if FCRA section 624 notice requirements are not covered by the exception under 1016.5(e), it does not automatically mean financial institutions will fail to follow the disclosure requirements of the FCRA itself or provide relevant information to consumers through customer service.

WBA appreciates the implementation of the GLBA amendment providing an exemption to the annual privacy notice requirement, clarification regarding timing for annual notices when the exemption is lost, and clarification with respect to removal of the alternative delivery posting. We believe that the Bureau's amendment will help financial institutions by relieving them of additional regulatory burden. Furthermore, WBA believes that if adopted, the proposal will provide clarity and save financial institutions time and money. Regarding the Bureau's request for comment with respect to affiliate notice requirements in relation to meeting the exemption to the annual privacy notice, WBA requests that financial institutions be afforded flexibility in providing such notices in order to continue to meet the exemption. Additionally, WBA does not believe that the exemption to the annual privacy notice would negatively impact consumers as bankers are more than willing to discuss questions and concerns with customers as they arise.