The Gramm-Leach-Bliley Act (“GLBA”) requires covered institutions to notify consumers of their information-sharing practices and inform them of their right to opt out of certain sharing practices. For years, people have been complaining that the notices sent to consumers were dense and confusing. Indeed, the Financial Services Regulatory Relief Act of 2006 amended GLBA to required that the financial regulatory agencies propose a succinct, comprehensible model form that would allow consumers to compare easily the privacy practices of different financial institutions, and one that would be easy to read.
Yesterday, after a lengthy drafting process, eight federal regulatory agencies (the Board of Governors of the Federal Reserve System; thr Commodity Futures Trading Commission; the Federal Deposit Insurance Corporation; the Federal Trade Commission; the National Credit Union Administration; the Office of the Comptroller of the Currency; the Office of Thrift Supervision; and Securities and Exchange Commission) released a final model privacy notice form designed to make it easier for consumers to understand how financial institutions collect and share information about consumers. The model form provides standardized language in easy-to-read form.
According to the FTC press release, “the agencies conducted extensive consumer research and testing in developing the model form issued today. Then they solicited public comments and considered those comments in developing a model form that is easier for consumers to understand and use.”
The final rule provides that a financial institution that chooses to use the model form obtains a “safe harbor” and will satisfy the disclosure requirements for notices. Here is a link to the FTC announcement of the model form, which contains links to the form and the rule adopting it.