Financial Technology

Financial Technology

December 14, 2012

House Bill May Eliminate the Requirement for Banks to Send Annual Privacy Notices

Are you tired of getting notifications from your bank about its privacy policy every year when it hasn't changed?

Well, you may soon be in luck.

The House recently passed a bill, the Eliminate Privacy Notice Confusion Act, which would exempt financial institutions from distributing privacy notices to customers if the policy hasn't changed from the year before.

The bill is intended to reduce costs, especially in this age and day where customers are gravitating toward electronic banking over traditional paper.

"This legislation would eliminate unnecessary, costly, confusing and often ignored mailings that clog up people's mailboxes that end up costing millions of dollars to produce and mail," Rep. Blaine Luetkemeyer, who co-sponsored the legislation with Rep. Brad Sherman, said in a statement."Additionally, many of these costs are ultimately being passed onto customers of banks and credit unions. Not only will this legislation end the redundant mailings, but it also will make it more likely that people will pay closer attention to important mailings they receive from their financial institutions because they are receiving fewer."

Opponents of the bill say the legislation would eventually destroy customer's rights.

"When you start down that slippery slope that you know you don't have to notify privacy protection, the next step is to not even have privacy at all," Rep. Joe Barton said during a floor debate.

Moreover, the claim that the bill would cut costs doesn't fly with Rep. Edward Markey, who says that banks have enough money to send out notices for new products, therefore sending out notifications about privacy policies shouldn't be a problem.

Nonetheless, advocates of the bill stick by the fact that there is no value in mailing customers information that they already know.

"The idea that you're mailed a copy of what you've already been mailed a copy of that hasn't changed, that does little or nothing to provide additional privacy, except we can say, 'Oh, we're for privacy,' " said Sherman.

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Edited by Brooke Neuman

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