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Inactive Financial Institution Letters

Privacy of Consumer Financial Information

January 15, 2004

TO: CHIEF EXECUTIVE OFFICER (also of interest to Compliance Officer)
SUBJECT: Advanced Notice of Proposed Rulemaking (ANPR) Regarding Privacy (Part 332 of the FDIC's Rules and Regulations)
Summary: Eight federal regulators are soliciting comment on ways to improve the privacy notices financial institutions provide to consumers under the Gramm-Leach-Bliley Act (the GLB Act). Comments are due by March 29, 2004.

Eight federal regulators including the Federal Deposit Insurance Corporation announced an Advanced Notice of Proposed Rulemaking (ANPR) on December 23, 2003, seeking comment on ways to improve financial institution privacy notices required by the Gramm-Leach-Bliley Act (the GLB Act). The ANPR describes various approaches that the agencies could pursue to allow or require financial institutions to provide alternative types of privacy notices that would be more readable and useful to consumers. It also seeks comment on whether differences between federal and state laws pose any special issues for developing a short privacy notice. A copy of the ANPR, published in the Federal Register on December 30, 2003, is attached. Comments are due by March 29, 2004.

The ANPR was developed jointly by the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the FDIC, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Securities and Exchange Commission.

Section 503 of the GLB Act requires financial institutions to provide a notice to each customer that describes the institution's policies and practices regarding the disclosure to third parties of nonpublic personal information. In 2000, the agencies published consistent final regulations that implement these provisions, including sample clauses that institutions may use in privacy notices. However, the regulations do not prescribe any specific format or standardized wording for privacy notices.

The agencies do not propose the adoption of any specific action at this time to improve privacy notices. Instead, the agencies request input on what approaches would be most useful to consumers while taking into consideration the burden on financial institutions.

The agencies will evaluate the public comments on the ANPR with a view toward developing proposals for appropriate interpretations or amendments to their respective regulations. In the event that the agencies decide to proceed, the agencies expect to do so through proposed rulemaking. The agencies also expect that consumer testing will be a key component in the development of any specific proposal.

For more information, please contact April Breslaw, Chief, Compliance Section, (202) 898-6609; David Lafleur, Policy Analyst, (202) 898-6569, Division of Supervision and Consumer Protection, Ruth Amberg, Senior Counsel, (202) 898-3736, or Robert Patrick, Counsel, Legal Division, (202) 898-3757.

For your reference, FDIC Financial Institution Letters may be accessed on the FDIC's Web site at To learn how to automatically receive FDIC Financial Institution Letters through e-mail, please visit

Michael J. Zamorski
Division of Supervision and Consumer Protection

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Distribution: FDIC-Supervised Banks (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 (1-877-275-3342 or (703) 562-2200).

Last Updated 1/16/2004

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