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Inactive Financial Institution Letters

Affiliate Marketing Opt Out Regulations

July 15, 2004

TO: CHIEF EXECUTIVE OFFICER (also of interest to Compliance Officer)
SUBJECT: Notice of Proposed Rulemaking Regarding Affiliate Marketing Opt Outs (Part 334 of the FDIC's Rules and Regulations)
Summary: The FDIC and other financial institution regulatory agencies are soliciting comment on proposed rules that implement section 214 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act). The proposal would prohibit an institution from using certain information about a consumer it receives from an affiliate to make a solicitation to the consumer unless the consumer has been given notice and an opportunity to opt out of the solicitation. An institution that has a pre-existing business relationship with the consumer would not be subject to this marketing limitation. Nothing in the new affiliate marketing opt out supercedes or replaces the provisions in section 603 of the Fair Credit Reporting Act (FCRA) concerning the right to opt out of the sharing of information among affiliates, although there is some overlap between the two opt out requirements.

The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the National Credit Union Administration are seeking comment on the attached proposed rules that implement section 214 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act). Comments are due by August 16, 2004.

The FACT Act was signed into law on December 4, 2003. In general, the FACT Act amends the Fair Credit Reporting Act (FCRA) to enhance the ability of consumers to combat identity theft, increase the accuracy of consumer reports, and allow consumers to exercise greater control regarding the type and number of marketing solicitations they receive. To promote increasingly efficient national credit markets, the FACT Act establishes uniform national standards in key areas of regulation regarding consumer report information. The FACT Act authorizes a number of regulations on a variety of measures covered in the Act. The attached notice of proposed rulemaking (NPR) is authorized by section 214 of the Act.

The NPR contains the statutory requirement for financial institutions to provide an opportunity for consumers to opt out of marketing solicitations that are based on certain information received from an affiliate. The proposal assigns responsibility for providing this opt out to the financial institution that communicates the information about the consumer to its affiliates. An opt out is not required when an affiliated entity that will market to the consumer:

  • Has a pre-existing business relationship with the consumer;
  • Already provides benefits to the consumer under an employee benefit plan;
  • Responds to a communication initiated by the consumer; or
  • Responds to an affirmative authorization or request by the consumer.
The proposed rules contain examples of these exceptions.

The statute requires a consumer's election to opt out to be applicable for five years. Some financial institutions may wish to simply make the consumer's opt out election effective permanently. The NPR allows institutions to choose the method that is most efficient and least burdensome to their operations. The NPR contains the technical requirements for the content of opt out notices, as well as model forms for institutions.

Written comments may be sent to Robert E. Feldman, Executive Secretary, Attention: Comments/Executive Secretary Section, Federal Deposit Insurance Corporation, 550 17th Street, NW, Washington, DC 20429. Comments may also be mailed electronically to Comments may be hand-delivered to the guard station at the rear of the 17th Street building (located on F Street) on business days between 7 a.m. and 5 p.m. Comments also may be faxed to (202) 898-3838. For more information, please contact April Breslaw, Section Chief, Division of Supervision and Consumer Protection (DSC), at (202) 898-6609; David Lafleur, Policy Analyst, DSC, at (202) 898-6569; or Robert Patrick at (202) 898-3757 or Richard Schwartz at (202) 898-7424, Counsels in the Legal Division.

For you 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 03/06/2008

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