|March 31, 2000
Recently, I received notice from the National Association of College and University Business Officers (NACUBO) that the provisions of the Financial Services Modernization Act (Gramm-Leach-Bliley Act or GLB Act) would cover not only financial institutions, but also colleges and universities making student loans. I am writing to convey my concerns regarding higher educational institutions being regulated as "financial institutions".
While I applaud the efforts to protect consumer's personal information, the spirit of the legislation does not seem to be aimed at the regulation of colleges and universities making loans only to their own students. Rather, it's intent is to regulate commercial lending activity.
The need for further regulation of student privacy is unnecessary. The privacy rights of students and parents are currently protected under the Family Educational Rights and Privacy Act (FERPA) which has been in place, as I recall, since the early 1970's. The need for colleges to comply with an additional set of regulations pertaining to privacy matters is redundant and burdensome. Our compliance with FERPA is audited annually.
We note that in section 527(d) of the GLB Act, exemptions have already been granted to other institutions. We urge you to consider exempt colleges and universities as well.
Seth H. Patton