[Congressional Record Volume 159, Number 35 (Tuesday, March 12, 2013)]
[House]
[Pages H1337-H1339]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 ELIMINATE PRIVACY NOTICE CONFUSION ACT

  Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 749) to amend the Gramm-Leach-Bliley Act to provide an 
exception to the annual privacy notice requirement.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 749

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Eliminate Privacy Notice 
     Confusion Act''.

     SEC. 2. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIREMENT UNDER 
                   THE GRAMM-LEACH-BLILEY ACT.

       Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) 
     is amended by adding at the end the following:
       ``(f) Exception to Annual Notice Requirement.--A financial 
     institution that--
       ``(1) provides nonpublic personal information only in 
     accordance with the provisions of subsection (b)(2) or (e) of 
     section 502 or regulations prescribed under section 504(b), 
     and
       ``(2) has not changed its policies and practices with 
     regard to disclosing nonpublic personal information from the 
     policies and practices that were disclosed in the most recent 
     disclosure sent to consumers in accordance with this section,
     shall not be required to provide an annual disclosure under 
     this section until such time as the financial institution 
     fails to comply with any criteria described in paragraph (1) 
     or (2).''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Luetkemeyer) and the gentleman from California (Mr. 
Sherman) each will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days within which to revise and extend their 
remarks and submit extraneous materials for the Record on H.R. 749.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. LUETKEMEYER. Mr. Speaker, I yield myself as much time as I may 
consume.
  I rise today in strong support of H.R. 749, the Eliminate Privacy 
Notice Confusion Act.

[[Page H1338]]

  Businesses in America are drowning in a sea of red tape, and the 
never-ending regulatory onslaught threatens financial institutions' 
ability to lend to consumers. One banker that testified before the 
Financial Services Committee last year said that, as a senior 
executive, he currently spends as much as 80 percent of his time 
working on compliance-related issues, compared to approximately 20 
percent as little as 3 years ago. As he said in that hearing:

       Every dollar spent on compliance is a dollar less that we 
     have to lend and invest in the communities we serve. Every 
     hour I spend on compliance is an hour I could be spending 
     with customers and potential customers, acquiring new 
     deposits and making new loans.

  In the Financial Services Committee, we have heard from countless 
bankers and credit unions that the costs associated with complying with 
rules and regulations are ballooning rapidly and diminishing financial 
institutions' ability to lend, forcing them to raise the fees they 
charge their customers for basic services. The costs stemming from red 
tape vary, from managerial expenses for monitoring employees' 
compliance, to printing and postage expenses to provide written 
disclosures to customers.
  This bipartisan bill will help reduce compliance burdens and 
confusion among consumers. Federal law currently requires financial 
institutions to issue disclosure notices to consumers that detail the 
institution's privacy policies if it shares customers' nonpublic 
personal information, as well as the customer's right to opt out of 
sharing this information. These disclosures must be issued when a 
customer relationship is first established and annually in paper form, 
even if no policy changes have occurred. My bill would require 
institutions to provide these notices only if they have changed a 
policy or practice related to the privacy of the consumer.
  This may seem like a simple change, but its impact on financial 
institutions is significant. Requiring these institutions to send 
annual notices even when no changes have been made is redundant, 
unnecessary, and costly.
  Mr. Speaker, this bill would permit financial institutions to 
redirect these resources towards lending, staffing, and lowering the 
cost of financial services. For consumers, these mailings typically 
serve to clog up mailboxes and confuse even the best of us. In fact, a 
recent voter survey conducted by Voter/Consumer Research indicated that 
fewer than one-quarter of consumers read the privacy notifications they 
receive, and over three-quarters of consumers would be more likely to 
read them if they were only sent when a financial institution changed 
its policies.
  This bill will make the mailings more significant to the consumer 
because they would only come after a change in policy. Let me 
reiterate: This legislation will only remove the annual privacy notice 
requirement if an institution has not, in any way, changed its privacy 
policies or procedures. This legislation does not exempt any 
institution from an initial privacy notice, nor does it allow a 
loophole for an institution to avoid using an updated notice.
  This language is not controversial; it does not jeopardize consumer 
privacy; and it does not exempt any institution from having to produce 
an initial or amended privacy notice. This legislation does eliminate 
millions of costly and confusing mailings.
  H.R. 749 enjoys broad support within the financial services industry, 
from credit unions and community services to money center banks; and 
here in Congress, this bill is one of the few that both Republicans and 
Democrats can agree on. In fact, previous versions of this bill passed 
on voice vote in both the 111th and 112th Congresses, with the most 
recent vote occurring just before this past Christmas.
  I want to thank the gentleman from California (Mr. Sherman) for his 
work on this bill. He has been tireless; he has been relentless; he has 
been a huge supporter, and it is a big issue to him and his 
constituents as well. I also want to thank Chairman Hensarling and 
Ranking Member Waters for helping to ensure swift passage of this 
legislation.
  I urge my colleagues to again voice their support in favor of this 
bill. H.R. 749 may be short and simple, but it will have a meaningful 
impact on financial institutions by increasing their resources so they 
can do what they do best--lend.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  I thank the gentleman from Missouri for his tireless work on this.
  We passed this bill in this exact form in the 111th Congress, the 
112th Congress, and I think the third time will be the charm. We passed 
it by voice vote once; we passed it again; and this time we're sending 
it to the Senate with 22 months left to go, so they have little excuse 
for not somehow dealing with the bill. And by that, I mean passing the 
bill.
  The bill is now narrowly tailored and is very straightforward. It 
simply revises disclosure requirements originally passed under the 
Gramm-Leach-Bliley Act to eliminate a costly and duplicative 
requirement that all financial institutions mail their customers a copy 
of their privacy notice each year, even if there has been no change in 
the policy. Under the bill, the only documents that won't have to be 
mailed are identical to what has been mailed to the same person at some 
previous time.
  There may have been a time in our country, even a decade ago, where 
the natural thing was, Let's rummage around and try to find that 
privacy policy. Now everybody I know is going to go to the Web and look 
at it on the day they want to look at it rather than wait for the 
annual time in which it is mailed to them.
  Under the bill, the customer would receive a printed copy of the 
privacy policy when they become a customer of the financial institution 
and every time that policy changes. In addition, the privacy policy 
would be available on the institution's Web site for any customer to 
look at 24/7, 365.
  Mr. Speaker, this is a very minor component of disclosure policy, but 
every year banks, credit unions, and other financial institutions have 
to spend millions of dollars to print and send to the same people what 
they have printed and sent to those people a year before. At best, this 
is an enormous waste of time, money, and paper. At worst, it causes 
customers to think there is something new when they are just getting 
what they got a year ago. It distracts consumers from reading those 
notices where there has been a change of policy and focuses their 
attention on something that is duplicative.

                              {time}  1710

  This bill makes a simple fix to this problem by requiring the 
financial institution to provide the privacy notice to their customers 
when they open the account and each time a change occurs that affects 
the policy or practice related to the privacy of the customer.
  Institutions are still required to post these notices on their Web 
sites and to provide a toll-free number that customers can call to 
request a copy of that policy at any time. The bill simply says you 
don't have to mail out the same policy document year after year after 
year.
  As a result, customers will know that when they get a privacy notice, 
it's something new and deserves their attention, or at least contains 
some new information. And banks and credit unions and other financial 
institutions that have been spending millions of dollars to mail out 
redundant policies can redirect those savings back to the customers.
  Mr. Speaker, I again want to thank Mr. Luetkemeyer, the 
Representative from Missouri, for his tireless leadership on this 
issue. This is a commonsense fix that both parties can agree on, and I 
hope that we can pass this bill by voice vote and go on to something 
else.
  I see no Democratic speakers; and on that basis, I yield back the 
balance of my time.
  Mr. LUETKEMEYER. Mr. Speaker, I just want to again reiterate my 
thanks to the gentleman from California (Mr. Sherman) for his hard work 
on this issue. I know we had a little bump in the road last fall when 
we were working on this, and it was through his efforts that we were 
able to solve the problem.
  He's been tireless on this, and again today he's brought a lot of 
energy and information to this issue, and we certainly appreciate his 
support.

[[Page H1339]]

  I yield back the balance of my time.
  Ms. JACKSON LEE. Mr. Speaker, I rise today to debate H.R. 749, the 
``Eliminate Privacy Notice Confusion Act,'' which seeks to eliminate 
wasteful and unnecessarily duplicative privacy notification 
requirements for financial institutions.
  More specifically, H.R. 749 would amend the Gramm-Leach-Bliley Act to 
exempt from its annual privacy policy notice requirement any financial 
institution that:
  (1) Provides nonpublic personal information only in accordance with 
specified requirements, and
  (2) Has not changed its policies and practices with regard to 
disclosing nonpublic personal information from those disclosed in the 
most recent disclosure sent to consumers.''
  Under current law, financial institutions are required to give 
notices to customers that delineate their information-sharing 
practices. The Gramm-Leach-Bliley (GLB) Act of 1999 attempted to 
balance the information privacy interests of consumers with the need 
for financial institutions to share information for ordinary business 
purposes.
  To that end, GLB required financial institutions to inform their 
customers, in the form of a privacy notice, about the types of 
information they collect as well as the types of businesses that may be 
provided that information.
  In order to give the customer the choice of determining whether he or 
she is comfortable with the sharing of their information, the privacy 
notice is required to be issued upon the opening of a new account as 
well as once a year.
  Financial institutions collect basic information from customers, such 
as your name, phone number, address, income, and details about your 
assets. Moreover, in determining whether someone qualifies for a 
particular product, such as a loan, a financial institution may collect 
additional details from other sources, such as credit reports from 
credit bureaus. Furthermore, some financial institutions track your use 
of products like credit cards and record information such as how much 
you borrow, how much you buy, where you shop, and whether you pay your 
balance in a timely fashion.
  Some financial institutions share this collected information with 
other entities, including unaffiliated companies like retailers and 
telemarketers. This is why it is particularly important that customers 
know the privacy policies of their financial institutions; customers 
must make a determination as to whether they are comfortable with how 
their bank intends to share their information.
  However, requiring financial institutions to submit annual privacy 
notices to customers when they remain unchanged can be considered 
wasteful. Moreover, because the notices must be issued with regularity, 
it may have the effect of lowering awareness on the part of consumers 
when a change to a privacy policy is in fact made.
  H.R. 749 intends to eliminate this waste and potential for diminished 
customer awareness by removing the annual notification requirement for 
financial institutions, so long as the policy remains unchanged from 
the last notification and the financial institution otherwise complies 
with the requirements for notification.
  For that reason, Members ought to copsider H.R. 749 in contemplation 
of the intent of the notification requirements in Gramm-Leach-Bliley.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the 
rules and pass the bill, H.R. 749.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

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