Posted by Anthony Demangone
Yesterday, the Federal Reserve, along with other regulations (including NCUA) announced the availability of an online privacy notice form builder. Financial institutions, including credit unions, can use the form builder to...well, build their privacy notice in a way that complies with the new model privacy form that regulators released not all that long ago. Start building your form here. Here's a form I created for the mythical Anthony Demangone Federal Credit Union. Note: it is short on compliance, but long on sarcasm.) But I built it in 5 minutes, so it should give you an idea of how easy the system is to use. Other things to note:
- You still will need to understand how the privacy regulation works to complete the form properly. The online form builder does link to the 2009 final rule.
- Building the form should be a group effort. Does any one person at your credit union really understand how your credit union shares information? A good blend of different departments should be used to make sure the person who builds the form really understands how you gather and share information.
- You can use the new model form, and you'll enjoy a "safe harbor." What is a "safe harbor?" If you use the model form, you pretty much are bullet-proof when it comes to this issue on exams, as long as you use the form as outlined in the regulation.
- Your current privacy notice likely uses clauses provided by regulators back in 2001. The 2009 privacy rule eliminates the safe harbor permitted for notices based on those old sample clauses for privacy notices provided after December 31, 2010. Again, I'm guessing many of you created privacy notices using those sample clauses. So, your notices will be OK - they will enjoy a safe harbor - through the end of this year. On January 1, 2011, the safe harbor for those sample clauses disappears. Clearly, regulators are hoping that everyone transitions to the model form.
- On January 1, 2012, those old sample clauses will be removed from privacy regulations, including NCUA's. Like they never existed. I wonder if we'll be able to even speak about them?
- You don't have to use the new model form, but you're on your own if you create your own language. In other words, you won't enjoy the safe harbor protection.
It should not be forgotten that the Federal Government gave us this free tool on tax day. I'm not saying this makes us even, but free is good.
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NAFCU members may want to take a look at NAFCU's February Flash Report (log in needed), which highlights the cost of compliance. For example, 83.6 % of respondents believe compliance costs will increase this year. No one thinks the costs are going to decrease.
Great write up, really liked how you filled one out! Made everything a lot more clear. This seems like a great idea to release right now also.
Posted by: Max Silver | April 16, 2010 at 12:24 PM