Several financial services trade groups urged the CFPB on Monday to consider an alternate approach to simplifying the annual privacy notice requirement under the Gramm-Leach Bliley Act.
A letter signed by the American Bankers Association, Consumer Bankers Association, Financial Services Roundtable, Independent Community Bankers of America and the Securities Industry and Financial Markets Association said that the CFPB’s current proposal would fail to accomplish its goal.
The CFPB has proposed to require financial institutions to provide an annual disclosure of privacy policies to consumers, but the groups said some customers have complained about being confused when they receive numerous privacy notices each year.
“For our members, mailing notices every year under these circumstances is a costly and unnecessary burden,” the groups said.
The CFPB does propose an alternative method for delivering the annual privacy notice, but the groups said financial institutions must meet certain requirements, such as having made no changes to information-sharing practices, in order to use the alternative method.
“While the associations strongly believe streamlining the current privacy notice requirements would provide great benefit to consumers and financial institutions, the proposal, as written, does little to minimize the overall, unnecessary regulatory burden currently in place,” the groups said.
The associations said the CFPB’s proposal “unnecessarily complicates what should be a straight-forward regulatory regime.”
“In order to move toward a more cost-effective and efficient notice for consumers and the industry, we recommend [the CFPB] eliminate the annual privacy notice when institutions only share information within established restrictions, have not changed their information-sharing practices since the last privacy notice was delivered and make the privacy disclosures readily available online,” the letter said.