On Dec. 4, 2015 President Obama signed a piece of legislation, Fixing America’s Surface Transportation Act or “Fast Act”, which features an amendment to the Gramm-Leach-Bliley Act (GLBA). The amendment provides an exception to GLBA’s annual privacy policy notice requirement. Section 75001 of the Fast Act states:
“A financial institution that (1) provides nonpublic personal information only in accordance with the provisions of subsection (b)(2) or (e) of section 502 or regulations prescribed under section 504(b), and (2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with this section, shall not be required to provide an annual disclosure under this section.”
Previously, GLBA required all investment advisers to provide an annual privacy policy disclosure to their clients. The road to the elimination of the annual privacy statement was bricked incrementally. In October of 2014, the Consumer Financial Protection Bureau (CFPB) finalized a rule that allows financial institutions to post their annual privacy notices online instead of delivering them individually if they meet certain criteria. In March and April of 2015, several financial groups* pushed to eliminate any annual privacy statement. They argued that the annual privacy policy disclosure confused clients and, “has little value for either customers or financial institutions.”
Please note, the implementation of this amendment does not mean investment advisers and other financial institutions no longer need to disclose their privacy policies to clients. Rather, only certain firms that meet the outlined provisions are no longer required to release the disclosure annually. If you are uncertain if your firm needs to send an annual privacy policy notice and you are a client of RIA Compliance Consultants we encourage you to contact your consultant. If you are not a client of RIA Compliance Consultants and you have questions about a privacy policy notification or if you have other investment advisor compliance questions click here to set up an introductory call with one of our consultants.
*The American Bankers Association, American Financial Services Association, Consumer Bankers Association, Credit Union National Association, Financial Services Roundtable, Independent Community Bankers of America, Midsize Bank Coalition of America, Mortgage Bankers Association, and National Association of Federal Credit Unions
Related Resources
Privacy – Permission to Disclose Personal Info on Behalf of Client
Posted by Bryan Hill
Labels: Privacy, Privacy Policy
