Are Annual Privacy Policy Notices From Banks/Credit Unions Excessive? (H.R. 601)

What is H.R. 601?

(Updated July 21, 2017)

Under current law, financial institutions have to notify their customers every year of the policies for giving the personal information of customers to third parties. This bill would allow banks and credit unions to only send privacy policy notices to customers when their policies change, or if they begin sharing nonpublic personal information with third parties.

Argument in favor

Requiring financial institutions to mail out their privacy policy every year - even if it hasn’t changed - is a ridiculous waste of time and resources. People can access these policies online at their leisure.

Argument opposed

Unfortunately, most people don’t read privacy policies in their entirety. Sending out annual notices of up-to-date privacy policies — even if they’re unchanged — ensures that more people can know how their data is being used.

Impact

People who do their business at banks and credit unions, banks and credit unions, third parties that collect private customer information, and the Bureau of Consumer Financial Protection (CFPB).

Cost of H.R. 601

A CBO cost estimate found that implementing this bill would increase spending, but wouldn't really increase the workload of the Bureau of Consumer Financial Protection (CFPB), making any additional costs insignificant.

Additional Info

In-Depth:

This legislation has been passed in the House three times since 2010 —  failing to receive a vote in the Senate every time.

Of Note:

The National Association of Federal Credit Unions has come out in support of this bill, saying that it would “remove the need for redundant, burdensome notice disclosures.” They also note that most financial institutions have their privacy policies online for customers to access at any time.

Media:

Sponsoring Rep. Blaine Luetkemeyer (R-MO) Press Release

CBO Cost Estimate

National Association of Federal Credit Unions (Context)

National Association of Federal Credit Unions (In Favor)