Consumers have become increasingly concerned about the privacy of their personal information. With the rapid growth of electronic commerce, and the increased collection of diverse pieces of consumer personal information over the Internet, the potential for this information to be used in ways unwanted by consumers is a growing risk to financial institutions. In the attached "Online Privacy of Consumer Personal Information," the FDIC addresses online privacy to raise awareness about this issue among financial institutions.
The FDIC considers the privacy of consumers' personal information an important element of public trust and confidence in depository financial institutions. Financial institutions' compliance with existing laws on consumer privacy matters and their demonstrated ability to protect sensitive information have given customers confidence. However, new consumer privacy concerns are emerging due to changes in the industry and technology. The FDIC supports industry self-regulation to address consumer privacy issues, and encourages financial institutions to maintain an awareness of emerging consumer online privacy concerns while taking voluntary, specific actions to address those concerns. Institutions should provide meaningful disclosures of their privacy policies and information practices, and effectively enforce them.
During the course of regular examinations, examiners will continue to review information collection practices and discuss them with bank management. For further information, please contact your FDIC regional office.
Nicholas J. Ketcha Jr.
Director, Division of Compliance and Consumer Affairs
Distribution: FDIC-Supervised Institutions (Commercial and Savings)
NOTE: Paper copies of FDIC financial
institution letters may be obtained through the FDIC's Public
Information Center, 801 17th Street, NW, Room 100, Washington, DC
20434 (800-276-6003 or (703) 562-2200).