WASHINGTON (7/15/14)--The Credit Union National Association has submitted a comment letter to the Consumer Financial Protection Bureau regarding its proposed amendment to the Annual Privacy Notice Requirement (Regulation P), saying the change would significantly reduce the costs to credit unions of providing the annual notices.
The proposal would allow financial institutions that do not engage in certain types of information sharing to stop mailing an annual disclosure as long as certain alternative delivery requirements are met (News Now May 29).
"At the same time, the proposal would have a minimal impact on consumers who would have access to privacy disclosures through the proposed alternative delivery method," reads CUNA's letter. "As a result, the proposal would add efficiency to financial institutions' process of providing annual privacy notices to consumers without decreasing consumers' access to such disclosures."
The alternative delivery method includes notifying consumers of the availability of the annual privacy notice, then providing consumers with the notice through a website or a toll-free phone number consumers can call to request the mailing of a hard copy of the notice.
CUNA has requested several changes to the alternative delivery method to make it more cost-effective for small financial institutions. Most notably, CUNA questions the need for a dedicated toll-free number.
"If a financial institution has a toll-free number in place, then it should be able to use the existing number to meet the alternative delivery requirement," the letter reads. "We also suggest that the agency look at alternatives to the toll-free number for small institutions that do not already have a toll-free number. Many small credit unions operate in geographically restricted areas. These credit unions often do not have toll-free numbers due to the expense involved in procuring one, and because the credit union's members are contained in such a small area."
While CUNA supports the intent of the proposal, the comment letter suggests several changes, most notably that the CFPB allow for all privacy notices to be delivered via the alternate delivery methods for all financial institutions that use the Regulation P model form.
According to a recent CUNA survey of credit union members regarding the receipt of privacy notices, of the 79% of people who recall receiving an annual privacy notice, 10% disposed of the notice without opening it, 15% opened it without reading, 53% skimmed it quickly and only 22% reported reading the notice in its entirety.