FTC, Congress trying to make commercial privacy more manageable

In two separate developments this week we see efforts from both the executive and legislative branches intended to make it easier for financial institutions to comply with regulations on privacy practices required under the Gramm-Leach-Bliley Act (GLBA). For its part, today the Federal Trade Commission (FTC) announced the availability of an online form builder to help financial institutions draft the privacy notices that the institutions are required to provide to their customers. By following a simple (one page) set of instructions, users seeking to create privacy notices are directed to one of four PDF templates, each of which is two pages long and has a set of highlighted areas where institutions can insert their own content to explain what they do with customer personal information. The four versions of the template correspond to the possible combinations of two attributes:  whether or not an opt-out provision exists and whether or not affiliate marketing is included. More detailed guidance on content required to be included in each section of the form was published in the Federal Register on December 1, 2009. The provision to create and make available such an optional model form was included in GLBA (15 U.S.C. §6803(e)).

On the legislative side, yesterday the House of Representatives passed the Eliminate Privacy Notice Confusion Act (H.R. 3506), which if enacted into law would amend GLBA (15 U.S.C. §6803) to add an exception to the current requirement that privacy notices be provided annually to customers, if the institution’s information disclosure policies and practices haven’t changed since previous notice was provided, and if the provisions under which the institution discloses non-public personal information fall entirely within the statutory exceptions to prohibited disclosure already in the statute. The bill is notable in another respect tangential to its content:  it was passed as a “stand-alone” bill for a single purpose, rather than as part of some larger, more complex piece of legislation. It is the second such bill sponsored by Rep. Erik Paulsen, a freshman Republican Congressman from Minnesota.