FDIC Federal Register Citations

Cambridge Trust Company

Re: EGRPRA Burden Reduction Comment

October 19, 2004

Dear Sir:

Cambridge Trust Company is a nine-branch, $720MM commercial bank and trust company located in Cambridge, Massachusetts. We appreciate this opportunity to respond to the Agencys’ request for regulatory burden reduction recommendations under the Economic Growth and Regulatory Reduction Act of 1996.

Privacy of Consumer Financial Information [Reg. P]

Subpart A of 12 CFR Part 332 requires a financial institution to provide an initial privacy notice when a consumer establishes a relationship with a financial institution, and to send an annual privacy notice to its customers. Both the initial and annual notice describe the circumstances under which a bank collects and shares confidential customer information and how it safeguards the information. If a bank does not share non-public personal customer information except as authorized under the exceptions in sections 13, 14 or 15 of the regulation, a sample short form notice is provided in Appendix A of the regulation.

Initial Notices and Disclosures:

The Bank considers it a customer service and agrees with the agencies that it is important to explain to customers the terms of their accounts or relationships by providing the initial disclosures required by Reg P and the other consumer regulations, such as Regulations Z, CC, DD or E.

Financial institutions also make these initial disclosures available to customers and the public upon request either in their lobbies, through the mail, or on their websites.

Annual Notices and Disclosures:

In order to protect consumers and afford them the opportunity to question transactions or possible errors on their accounts, regulations such as Z and E require financial institutions to provide annual notices reminding customers about their rights and the actions they should take to inquire about or correct errors relating to transactions in their account. These transaction-related disclosures are important and useful for customers.

The Cambridge Trust Company spent about $24,000 to print and mail its Privacy Notice in 2004. We do not have a record of customer response to the mailing, and therefore we question the value to our customers of an annual mailing when there have been no changes to our policy. Since we do receive customer responses when mailings address information about their accounts, or notices of an actual change in terms or a Bank policy, we feel it would be more appropriate for us to utilize resources notifying customers if we actually change our privacy policy, instead of providing an annual notice to which they may not pay attention. This would be similar to the notices required under the other consumer regulations where a financial institution must provide advance notice when it changes certain terms or its policy regarding a customer’s account.

We urge you to consider eliminating the requirement under section 332.5 to mail an annual privacy notice in favor of the requirement of section 332.8, which would require notice to customers when a financial institution changes it policy regarding sharing of non-public personal information.

Thank you for this opportunity to comment on the regulatory burden reduction proposal.


Sincerely,

Ana M. Foster
Assistant Vice President, Risk Manager and Compliance Officer