CU Privacy Notices Already Clear and Concise, Trades Say

WASHINGTON – In comment letters sent to NCUA, CUNA and NAFCU wrote that credit unions’ privacy notices are already brief and easily understood and argued for no mandatory changes at this time for credit unions. Their official comment letters were sent in response to a joint agency request for comments on a proposal concerning the issue. CUNA Assistant General Counsel Jeff Bloch said the trade association does not support a recent proposal by NCUA and the other federal financial regulators to alter the language and format of privacy notices at this time. The letter read, “Although credit unions recognize that the current privacy notices issued by certain types of financial institutions have been criticized as overly complex and have not proven useful for consumers, we believe such criticisms do not apply to the privacy notices issued by credit unions. However, credit unions are always willing to review specific proposals that will help their members better understand how their information is shared.” The letter added that the proposed changes would not meet the objectives of simpler, more meaningful disclosures. If changes are made, CUNA suggested that ample time be provided to implement the regulations and they should be made with consideration of the Fair and Accurate Credit Transactions Act in mind. CUNA did suggest that the requirement for annual notices is unnecessary, particularly for those credit unions that are not required to provide their members the right to opt-out of information sharing. “Whatever the modifications, flexibility should be built in,” NAFCU President and CEO Fred Becker wrote. NAFCU supports developing a shorter privacy notice so long as it is optional, he said. “NAFCU believes credit unions should not be required to incur additional expenses and administrative burden to replace notices that are already clear and conspicuous and in compliance with [the Gramm-Leach-Bliley Act],” the letter read. If a shorter notice is created, it should be a substitute, not a supplement, for a longer one. Maintaining and distributing two notices could be costly, NAFCU pointed out. The short notice should include all of the required elements applicable to their institution. Generally, NAFCU supported standardized language and format for use as guidance and any approach should not be mandatory. In its comment letter to NCUA, NASCUS also recommended NCUA defer revising the Privacy notification rule. NASCUS President/CEO Mary Martha Fortney called it “premature” to revise the requirements now. “NCUA should wait for the new disclosure requirements to be promulgated and then review the various notices to determine if a possibility for streamlining notices exists,” wrote Fortney. [email protected]