The Federal Trade Commission on Friday issued a final Rule implementing the provisions of the Gramm-Leach-Bliley Act governing the privacy of consumers' financial information. The Rule applies to a wide range of entities that come within the Act's definition of "financial institution" and over which the Commission has enforcement jurisdiction under the Act.
The Rule imposes on financial institutions three main requirements established by the Act. First, a financial institution must provide to its customers a notice about its privacy policies and practices. That notice must be clear, conspicuous and accurate and must describe the conditions under which a financial institution may disclose nonpublic personal information to nonaffiliated third parties and affiliates. Second, a financial institution must provide its customers with annual notices of its privacy policies and practices. Like the initial notice, the annual notice must be clear, conspicuous and accurate. Third, a financial institution must provide consumers with a reasonable opportunity to "opt out" of disclosures of their nonpublic personal information to nonaffiliated third parties and a reasonable means by which to opt out. Consumers may exercise their right to opt out at any time.
The Rule limits the disclosure by those financial institutions of "nonpublic personal information" about individuals to whom they provide financial products or services for personal, family or household purposes. Subject to certain exceptions allowed by law, the Rule covers information sharing between financial institutions and nonaffiliated third parties.
The Rule becomes effective November 13, 2000, but in order to provide sufficient time for financial institutions to establish policies and procedures and put in place systems to implement its requirements, the time for full compliance has been extended until July 1, 2001.
The Commission vote to issue the Rule was 5-0.
Copies of the Rule are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-FTC-HELP (202-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.
(FTC File No. 0023054)