[Federal Register Volume 76, Number 245 (Wednesday, December 21, 2011)]
[Rules and Regulations]
[Pages 79025-79050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-31729]



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 Rules and Regulations
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  Federal Register / Vol. 76, No. 245 / Wednesday, December 21, 2011 / 
Rules and Regulations  

[[Page 79025]]



BUREAU OF CONSUMER FINANCIAL PROTECTION

12 CFR Part 1016

[Docket No. CFPB-2011-0028]
RIN 3170-AA06


Privacy of Consumer Financial Information (Regulation P)

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Interim final rule with request for public comment.

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SUMMARY: Title X of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act (Dodd-Frank Act) transferred rulemaking authority for a 
number of consumer financial protection laws from seven Federal 
agencies to the Bureau of Consumer Financial Protection (Bureau) as of 
July 21, 2011, including most provisions of Subtitle A of Title V of 
the Gramm-Leach-Bliley Act (GLB Act), with respect to financial 
institutions described in section 504 of the GLB Act. The Bureau is in 
the process of republishing the regulations implementing those laws 
with technical and conforming changes to reflect the transfer of 
authority and certain other changes made by the Dodd-Frank Act. In 
light of the transfer of rulemaking authority for the privacy 
provisions of the GLB Act to the Bureau, the Bureau is publishing for 
public comment an interim final rule establishing a new Regulation P 
(Privacy of Consumer Financial Information). This interim final rule 
does not impose any new substantive obligations on regulated entities.

DATES: This interim final rule is effective December 30, 2011. Comments 
must be received on or before February 21, 2012.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2011-
0028 or RIN 3170-AA06, by any of the following methods:
     Electronic: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail: Monica Jackson, Office of the Executive Secretary, 
Bureau of Consumer Financial Protection, 1500 Pennsylvania Avenue NW., 
(Attn: 1801 L Street), Washington, DC 20220.
     Hand Delivery/Courier in Lieu of Mail: Monica Jackson, 
Office of the Executive Secretary, Bureau of Consumer Financial 
Protection, 1700 G Street NW., Washington, DC 20006.
    All submissions must include the agency name and docket number or 
Regulatory Information Number (RIN) for this rulemaking. In general, 
all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public 
inspection and copying at 1700 G Street NW., Washington, DC 20006, on 
official business days between the hours of 10 a.m. and 5 p.m. Eastern 
Time. You can make an appointment to inspect the documents by 
telephoning (202) 435-7275.
    All comments, including attachments and other supporting materials, 
will become part of the public record and subject to public disclosure. 
Sensitive personal information, such as account numbers or Social 
Security numbers, should not be included. Comments will not be edited 
to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Courtney Jean or Priscilla Walton-
Fein, Office of Regulations, at (202) 435-7700.

SUPPLEMENTARY INFORMATION:

I. Background

    Subtitle A of Title V of the GLB Act,\1\ captioned ``Disclosure of 
Nonpublic Personal Information,'' limits the instances in which a 
financial institution may disclose nonpublic personal information about 
a consumer to nonaffiliated third parties and requires financial 
institutions to provide certain privacy notices to their consumers and 
customers.\2\ Prior to July 21, 2011, rulemaking authority for the 
privacy provisions of the GLB Act was shared by eight Federal agencies: 
the Board of Governors of the Federal Reserve System (Board), the 
Federal Deposit Insurance Corporation (FDIC), the Federal Trade 
Commission (FTC), the National Credit Union Association (NCUA), the 
Office of the Comptroller of the Currency (OCC), the Office of Thrift 
Supervision (OTS), the Securities Exchange Commission (SEC), and the 
Commodity Futures Trading Commission (CFTC). Each of the agencies 
issued rules (which were consistent and comparable) to implement the 
GLB Act's privacy provisions.\3\
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    \1\ Codified at 15 U.S.C. 6801-6809. Section 728 of the 
Financial Services Regulatory Relief Act of 2006 (Pub. L. 109-351, 
120 Stat. 1966 (2006)) amended the GLB Act to require the 
development of a model privacy form that financial institutions may 
rely on as a safe harbor to provide privacy notices.
    \2\ 15 U.S.C. 6802-6803(a).
    \3\ 12 CFR 216 (Board); 12 CFR 332 (FDIC); 16 CFR 313 (FTC); 12 
CFR 716 and 741.220 (NCUA); 12 CFR 40 (OCC); 12 CFR 573 (OTS); 17 
CFR 248 (SEC); 17 CFR 160 (CFTC).
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    The Dodd-Frank Wall Street Reform and Consumer Protection Act 
(Dodd-Frank Act)\4\ amended a number of consumer financial protection 
laws, including the GLB Act. Among other changes, the Dodd-Frank Act 
transferred rulemaking authority for most of Subtitle A of Title V of 
the GLB Act, with respect to financial institutions described in 
section 504(a)(1)(A) of that Act, from the Board, FDIC, FTC, NCUA, OCC, 
and OTS (collectively, the transferor agencies) to the Bureau, 
effective July 21, 2011. Pursuant to the GLB Act, the FTC retains 
rulemaking authority over any financial institution that is a person 
described in 12 U.S.C. 5519.\5\ The SEC and the CFTC, which are not 
transferor agencies, also retain rulemaking authority over certain 
institutions described in sections 504(a)(1)(A)-(B) of the GLB Act.\6\ 
See sections 1061 and 1093 of the Dodd-Frank Act. Pursuant to the Dodd-
Frank Act and the GLB Act, as amended, the

[[Page 79026]]

Bureau is publishing for public comment an interim final rule 
establishing a new Regulation P (Privacy of Consumer Financial 
Information), 12 CFR part 1016, implementing those privacy provisions 
of the GLB Act for which the Bureau has rulemaking authority.
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    \4\ Public Law 111-203, 124 Stat. 1376 (2010).
    \5\ 15 U.S.C. 6804(a)(1)(A), (C). With certain statutory 
exceptions, the FTC generally retains rulemaking authority for motor 
vehicle dealers predominantly engaged in the sale and servicing of 
motor vehicles, the leasing and servicing of motor vehicles, or 
both. Id.; 12 U.S.C. 5519(a)-(b).
    \6\ 15 U.S.C. 6804(a)(1)(A)-(B). The SEC has rulemaking 
authority over securities brokers and dealers, investment companies, 
and investment advisers registered with the SEC under the Investment 
Advisers Act of 1940. Id. at 6804(a)(1)(A), 6805(a)(3)-(5). The CFTC 
has rulemaking authority over futures commission merchants, 
commodity trading advisors, commodity pool operators, and 
introducing brokers subject to the CFTC's jurisdiction under the 
Commodity Exchange Act with respect to any financial activity. 15 
U.S.C. 6804(a)(1)(B); 7 U.S.C. 7b-2(a).
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II. Summary of the Interim Final Rule

A. General

    The interim final rule combines the transferor agencies' existing 
rules, with the exception of the FTC's existing rule as it relates to 
entities described in section 504(a)(1)(C) of the GLB Act \7\ as the 
Bureau's new Regulation P, 12 CFR part 1016. The Bureau's new 
Regulation P makes only certain non-substantive, technical, formatting, 
and stylistic changes. To minimize any potential confusion, the Bureau 
is substantially preserving the numbering of the Board's Regulation P, 
other than the new part number. While this interim final rule generally 
incorporates the transferor agencies' existing regulatory text and 
appendices (including model forms), the rule has been edited as 
necessary to reflect nomenclature and other technical amendments 
required by the Dodd-Frank Act. Notably, this interim final rule does 
not impose any new substantive obligations on regulated entities.
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    \7\ 15 U.S.C. 6804(a)(1)(C). With certain statutory exceptions, 
those entities are motor vehicle dealers predominantly engaged in 
the sale and servicing of motor vehicles, the leasing and servicing 
of motor vehicles, or both. See 12 U.S.C. 5519(a)-(b).
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B. Specific Changes

    References to the transferor agencies and their administrative 
structure have been replaced with appropriate references to the Bureau. 
Conforming edits have been made to internal cross-references and to 
reflect the scope of the Bureau's authority pursuant to the GLB Act, as 
amended by the Dodd-Frank Act. Historical references that are no longer 
applicable, and references to effective dates that have passed, have 
been removed as appropriate. Appendix B, which listed sample clauses 
for privacy notices and provided a safe harbor for privacy notices 
issued with those sample clauses before January 1, 2011, has also been 
removed, as have any internal cross-references to it. Appendix B was 
scheduled to be eliminated from each of the transferor agencies' 
privacy regulations on January 1, 2012.\8\ Financial institutions that 
delivered annual notices to consumers on or before December 31, 2010 
were entitled to rely on the safe harbor for one additional year until 
their next annual notice was due.\9\ The removal of Appendix B by this 
interim final rule as of December 30, 2011 does not nullify the 
validity of privacy notices issued before January 1, 2011 using 
Appendix B's sample clauses, including during the intervening two days 
of December 30 and 31, 2011.
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    \8\  See 76 FR 62890 (Dec. 1, 2009).
    \9\ See id. at *62909 & n. 225.
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    Certain changes have been made to preserve substantive differences 
in the transferor agencies' rules. To the extent the transferor 
agencies' rules substantively differed from one another, the interim 
final rule contains separate provisions for the financial institutions 
previously subject to the respective transferor agencies' rulemaking 
authority. For example, special rules related to joint relationships 
and loans were applicable to credit unions under the NCUA's privacy 
regulation. To preserve those special rules applicable to credit 
unions, the interim final rule contains separate sections for ``joint 
relationships in the case of credit unions'' and ``special rule for 
loans in the case of credit unions.'' Similarly, the FTC's privacy 
regulation defined ``financial institution'' more narrowly than the 
other transferor agencies' privacy regulations. The interim final rule 
therefore contains a separate definition of ``financial institution'' 
for entities subject to the FTC's enforcement jurisdiction. The interim 
final rule also incorporates specific examples from the NCUA and FTC's 
privacy rules.

III. Legal Authority

A. Rulemaking Authority

    The Bureau is issuing this interim final rule pursuant to its 
authority under the GLB Act and the Dodd-Frank Act. Effective July 21, 
2011, section 1061 of the Dodd-Frank Act transferred to the Bureau the 
``consumer financial protection functions'' previously vested in 
certain other Federal agencies. The term ``consumer financial 
protection function'' is defined to include ``all authority to 
prescribe rules or issue orders or guidelines pursuant to any Federal 
consumer financial law, including performing appropriate functions to 
promulgate and review such rules, orders, and guidelines.''\10\ 
Sections 502 through 509 of the GLB Act, except for section 505 as it 
applies to section 501(b) (i.e., enforcement of the GLB Act's 
requirements concerning data privacy safeguards), are a Federal 
consumer financial law.\11\
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    \10\ Public Law 111-203, section 1061(a)(1). Effective on the 
designated transfer date, July 21, 2011, the Bureau was also granted 
``all powers and duties'' vested in each of the Federal agencies, 
relating to the consumer financial protection functions, on the day 
before the designated transfer date. Until this and other interim 
final rules take effect, existing regulations for which rulemaking 
authority transferred to the Bureau continue to govern persons 
covered by this rule. See 76 FR 43569 (July 21, 2011).
    \11\ Public Law 111-203, section 1002(14) (defining ``Federal 
consumer financial law'' to include the ``enumerated consumer 
laws''); id. Section 1002(12) (defining ``enumerated consumer laws'' 
to include sections 502 through 509 of the GLB Act, except for 
section 505 as it applies to section 501(b)).
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    Accordingly, effective July 21, 2011, the transferor agencies' 
authority to issue regulations pursuant to those sections of the GLB 
Act transferred to the Bureau, with the exception of the FTC's 
authority to issue regulations for certain motor vehicle dealers, as 
described in section 504(a)(1)(C) of the GLB Act.\12\
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    \12\ 15 U.S.C. 6804(a)(1)(C); 12 U.S.C. 5519(a)-(b). Section 
1066 of the Dodd-Frank Act grants the Secretary of the Treasury 
interim authority to perform certain functions of the Bureau. 
Pursuant to that authority, Treasury is publishing this interim 
final rule on behalf of the Bureau.
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    The GLB Act, as amended, authorizes the Bureau to ``prescribe such 
regulations as may be necessary to carry out the purposes of [Subtitle 
A of Title V of the GLB Act],'' with respect to institutions subject to 
the Bureau's enforcement jurisdiction under section 505 of the GLB Act 
(and notwithstanding Subtitle B of Title X of the Dodd-Frank Act).\13\ 
As already noted, the GLB Act excludes from the Bureau's rulemaking 
authority certain motor vehicle dealers described in 12 U.S.C. 5519 and 
provides the FTC rulemaking authority for those entities. The SEC and 
CFTC, which are not transferor agencies, also retain rulemaking 
authority over certain institutions described in sections 504(a)(1)(A)-
(B) of the GLB Act.
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    \13\ 15 U.S.C. 6804(a)(1)(A).
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B. Authority To Issue an Interim Final Rule Without Prior Notice and 
Comment

    The Administrative Procedure Act (APA) \14\ generally requires 
public notice and an opportunity to comment before promulgation of 
regulations.\15\ The APA provides exceptions to notice-and-comment 
procedures, however, where an agency for good cause finds that such 
procedures are impracticable, unnecessary, or contrary to the public 
interest or when a rulemaking relates to agency organization, 
procedure, and practice.\16\ The Bureau finds that there is good cause 
to conclude that providing notice and opportunity for comment would be 
unnecessary and contrary to

[[Page 79027]]

the public interest under these circumstances. In addition, 
substantially all changes made by this interim final rule, which were 
necessitated by the Dodd-Frank Act's transfer of rulemaking authority 
for Subtitle A of Title V of the GLB Act from the transferor agencies 
to the Bureau, relate to agency organization, procedure, and practice 
and are thus exempt from the APA's notice-and-comment requirements.
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    \14\ 5 U.S.C. 551 et seq.
    \15\ 5 U.S.C. 553(b), (c).
    \16\ 5 U.S.C. 553(b)(3)(A), (B).
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    The Bureau's good cause findings are based on the following 
considerations. As an initial matter, the transferor agencies' existing 
regulations were the result of notice-and-comment rulemaking to the 
extent required. Moreover, the interim final rule published today does 
not impose any new, substantive obligations on regulated entities. 
Rather, the interim final rule makes only non-substantive, technical 
changes to the existing text of those regulations, such as renumbering, 
changing internal cross-references, and replacing appropriate 
nomenclature to reflect the transfer of authority to the Bureau. Given 
the technical nature of these changes, and the fact that the interim 
final rule does not impose any additional substantive requirements on 
covered entities, an opportunity for prior public comment is 
unnecessary. In addition, recodifying the transferor agencies' 
regulations to reflect the transfer of authority to the Bureau will 
help facilitate compliance with Subtitle A of Title V of the GLB Act 
and its implementing regulations, and the new regulation will help 
reduce uncertainty regarding the applicable regulatory framework. Using 
notice-and-comment procedures would delay this process and thus be 
contrary to the public interest.
    The APA generally requires that rules be published not less than 30 
days before their effective dates. See 5 U.S.C. 553(d). As with the 
notice and comment requirement, however, the APA allows an exception 
when ``otherwise provided by the agency for good cause found and 
published with the rule.'' 5 U.S.C. 553(d)(3). The Bureau finds that 
there is good cause for providing less than 30 days notice here. A 
delayed effective date would harm consumers and regulated entities by 
needlessly perpetuating discrepancies between the amended statutory 
text and the implementing regulations, thereby hindering compliance and 
prolonging uncertainty regarding the applicable regulatory 
framework.\17\
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    \17\ This interim final rule is one of 14 companion rulemakings 
that together restate and recodify the implementing regulations 
under 14 existing consumer financial laws (part III.C, below, lists 
the 14 laws involved). In the interest of proper coordination of 
this overall regulatory framework, which includes numerous cross-
references among some of the regulations, the Bureau is establishing 
the same effective date of December 30, 2011 for those rules 
published on or before that date and making those published 
thereafter (if any) effective immediately.
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    In addition, delaying the effective date of the interim final rule 
for 30 days would provide no practical benefit to regulated entities in 
this context and in fact could operate to their detriment. As discussed 
above, the interim final rule published today does not impose any new, 
substantive obligations on regulated entities. Instead, the rule makes 
only non-substantive, technical changes to the existing text of the 
regulation. Thus, regulated entities that are already in compliance 
with the existing rules will not need to modify business practices as a 
result of this rule.

C. Section 1022(b)(2) of the Dodd-Frank Act

    In developing the interim final rule, the Bureau has conducted an 
analysis of potential benefits, costs, and impacts.\18\ The Bureau 
believes that the interim final rule will benefit consumers and covered 
persons by updating and recodifying Regulation P to reflect the 
transfer of authority to the Bureau and certain other changes mandated 
by the Dodd-Frank Act. This will help facilitate compliance with the 
GLB Act and its implementing regulations and help reduce any 
uncertainty regarding the applicable regulatory framework. The interim 
final rule will not impose any new substantive obligations on consumers 
or covered persons and is not expected to have any impact on consumers' 
access to consumer financial products and services.
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    \18\ Section 1022(b)(2)(A) of the Dodd-Frank Act addresses the 
consideration of the potential benefits and costs of regulation to 
consumers and covered persons, including the potential reduction of 
access by consumers to consumer financial products or services; the 
impact on depository institutions and credit unions with $10 billion 
or less in total assets as described in section 1026 of the Dodd-
Frank Act; and the impact on consumers in rural areas. Section 
1022(b)(2)(B) requires that the Bureau ``consult with the 
appropriate prudential regulators or other Federal agencies prior to 
proposing a rule and during the comment process regarding 
consistency with prudential, market, or systemic objectives 
administered by such agencies.'' The manner and extent to which 
these provisions apply to interim final rules and to benefits, 
costs, and impacts that are compelled by statutory changes rather 
than discretionary Bureau action is unclear. Nevertheless, to inform 
this rulemaking more fully, the Bureau performed the described 
analyses and consultations.
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    Although not required by the interim final rule, financial 
institutions may incur some costs in updating compliance manuals and 
related materials to reflect the new numbering and other technical 
changes reflected in the new Regulation P. The Bureau has worked to 
reduce any such burden by preserving the existing numbering to the 
extent possible and believes that such costs will likely be minimal. 
These changes could be handled in the short term by providing a short, 
standalone summary alerting users to the changes and in the long term 
could be combined with other updates at the financial institution's 
convenience. The Bureau intends to continue investigating the possible 
costs to affected entities of updating manuals and related materials to 
reflect these changes and solicits comments on this and other issues 
discussed in this section.
    The interim final rule will have no unique impact on depository 
institutions or credit unions with $10 billion or less in assets as 
described in section 1026(a) of the Dodd-Frank Act. Also, the interim 
final rule will have no unique impact on rural consumers.
    In undertaking the process of recodifying Regulation P, as well as 
regulations implementing thirteen other existing consumer financial 
laws,\19\ the Bureau consulted the Federal Deposit Insurance 
Corporation, the Office of the Comptroller of the Currency, the 
National Credit Union Administration, the Board of Governors of the 
Federal Reserve System, the Federal Trade Commission, and the 
Department of Housing and Urban Development, including with respect to 
consistency with any prudential, market, or systemic objectives that 
may be administered by such agencies.\20\ The Bureau also has consulted 
with the Office of Management and Budget for technical assistance. The 
Bureau expects to have further consultations with the appropriate 
Federal agencies during the comment period.
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    \19\ The fourteen laws implemented by this and its companion 
rulemakings are: the Consumer Leasing Act, the Electronic Fund 
Transfer Act (except with respect to section 920 of that Act), the 
Equal Credit Opportunity Act, the Fair Credit Reporting Act (except 
with respect to sections 615(e) and 628 of that act), the Fair Debt 
Collection Practices Act, Subsections (b) through (f) of section 43 
of the Federal Deposit Insurance Act, sections 502 through 509 of 
the Gramm-Leach-Bliley Act (except for section 505 as it applies to 
section 501(b)), the Home Mortgage Disclosure Act, the Real Estate 
Settlement Procedures Act, the S.A.F.E. Mortgage Licensing Act, the 
Truth in Lending Act, the Truth in Savings Act, section 626 of the 
Omnibus Appropriations Act, 2009, and the Interstate Land Sales Full 
Disclosure Act.
    \20\ In light of the technical but voluminous nature of this 
recodification project, the Bureau focused the consultation process 
on a representative sample of the recodified regulations, while 
making information on the other regulations available. The Bureau 
expects to conduct differently its future consultations regarding 
substantive rulemakings.

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[[Page 79028]]

IV. Request for Comment

    Although notice and comment rulemaking procedures are not required, 
the Bureau invites comments on this notice. Commenters are specifically 
encouraged to identify any technical issues raised by the rule. The 
Bureau is also seeking comment in response to a notice published at 76 
FR 75825 (Dec. 5, 2011) concerning its efforts to identify priorities 
for streamlining regulations that it has inherited from other Federal 
agencies to address provisions that are outdated, unduly burdensome, or 
unnecessary.

V. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA), as amended by the Small 
Business Regulatory Enforcement Fairness Act of 1996, requires each 
agency to consider the potential impact of its regulations on small 
entities, including small businesses, small governmental units, and 
small not-for-profit organizations.\21\ The RFA generally requires an 
agency to conduct an initial regulatory flexibility analysis (IRFA) and 
a final regulatory flexibility analysis (FRFA) of any rule subject to 
notice-and-comment rulemaking requirements, unless the agency certifies 
that the rule will not have a significant economic impact on a 
substantial number of small entities.\22\ The Bureau also is subject to 
certain additional procedures under the RFA involving the convening of 
a panel to consult with small business representatives prior to 
proposing a rule for which an IRFA is required.\23\
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    \21\ 5 U.S.C. 601 et seq.
    \22\ 5 U.S.C. 603, 604.
    \23\ 5 U.S.C. 609.
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    The IRFA and FRFA requirements described above apply only where a 
notice of proposed rulemaking is required,\24\ and the panel 
requirement applies only when a rulemaking requires an IRFA.\25\ As 
discussed above in part III, a notice of proposed rulemaking is not 
required for this rulemaking.
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    \24\ 5 U.S.C. 603(a), 604(a); 5 U.S.C. 553(b)(B).
    \25\ 5 U.S.C. 609(b).
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    In addition, as discussed above, this interim final rule has only a 
minor impact on entities subject to Regulation P. The rule imposes no 
new, substantive obligations on covered entities. Accordingly, the 
undersigned certifies that this interim final rule will not have a 
significant economic impact on a substantial number of small entities.

VI. Paperwork Reduction Act

    The Bureau may not conduct or sponsor, and a respondent is not 
required to respond to, an information collection unless it displays a 
currently valid Office of Management and Budget (OMB) control number. 
This rule contains information collection requirements under the 
Paperwork Reduction Act (PRA), which have been previously approved by 
OMB, and the ongoing PRA burden for which is unchanged by this rule. 
There are no new information collection requirements in this interim 
final rule. The Bureau's OMB control number for this information 
collection is: 3170-0010.

List of Subjects in 12 CFR Part 1016

    Banks, banking, Consumer protection, Credit, Credit unions, Foreign 
banking, Holding companies, National banks, Privacy, Reporting and 
recordkeeping requirements, Savings associations, Trade practices.

Authority and Issuance

0
For the reasons set forth above, the Bureau of Consumer Financial 
Protection adds Part 1016 to Chapter X in Title 12 of the Code of 
Federal Regulations to read as follows:

PART 1016--PRIVACY OF CONSUMER FINANCIAL INFORMATION (REGULATION P)

Sec.
1016.1 Purpose and scope.
1016.2 Model privacy form and examples.
1016.3 Definitions.
Subpart A--Privacy and Opt Out Notices
1016.4 Initial privacy notice to consumers required.
1016.5 Annual privacy notice to customers required.
1016.6 Information to be included in privacy notices.
1016.7 Form of opt out notice to consumers; opt out methods.
1016.8 Revised privacy notices.
1016.9 Delivering privacy and opt out notices.
Subpart B--Limits on Disclosures
1016.10 Limits on disclosure of nonpublic personal information to 
nonaffiliated third parties.
1016.11 Limits on redisclosure and reuse of information.
1016.12 Limits on sharing account number information for marketing 
purposes.
Subpart C--Exceptions
1016.13 Exception to opt out requirements for service providers and 
joint marketing.
1016.14 Exceptions to notice and opt out requirements for processing 
and servicing transactions.
1016.15 Other exceptions to notice and opt out requirements.
Subpart D--Relation to Other Laws
1016.16 Protection of Fair Credit Reporting Act.
1016.17 Relation to state laws.
Appendix to Part 1016--Model Privacy Form

    Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 6804.


Sec.  1016.1  Purpose and scope.

    (a) Purpose. This part governs the treatment of nonpublic personal 
information about consumers by the financial institutions listed in 
paragraph (b) of this section. This part:
    (1) Requires a financial institution to provide notice to customers 
about its privacy policies and practices;
    (2) Describes the conditions under which a financial institution 
may disclose nonpublic personal information about consumers to 
nonaffiliated third parties; and
    (3) Provides a method for consumers to prevent a financial 
institution from disclosing that information to most nonaffiliated 
third parties by ``opting out'' of that disclosure, subject to the 
exceptions in Sec. Sec.  1016.13, 1016.14, and 1016.15.
    (b) Scope. (1) This part applies only to nonpublic personal 
information about individuals who obtain financial products or services 
primarily for personal, family, or household purposes from the 
institutions listed below. This part does not apply to information 
about companies or about individuals who obtain financial products or 
services for business, commercial, or agricultural purposes. This part 
applies to those financial institutions and other persons for which the 
Bureau of Consumer Financial Protection (Bureau) has rulemaking 
authority pursuant to section 504(a)(1)(A) of the Gramm-Leach-Bliley 
Act (GLB Act) (12 U.S.C. 6804(a)(1)(A)). Specifically, this part 
applies to any financial institution and other covered person or 
service provider that is subject to Subtitle A of Title V of the GLB 
Act, including third parties that are not financial institutions but 
that receive nonpublic personal information from financial institutions 
with whom they are not affiliated. This part does not apply to certain 
motor vehicle dealers described in 12 U.S.C. 5519 or to entities for 
which the Securities and Exchange Commission or the Commodity Futures 
Trading Commission has rulemaking authority pursuant to sections 
504(a)(1)(A)-(B) of the GLB Act (12 U.S.C. 6804(a)(1)(A)-(B)). Except 
as otherwise specifically provided herein, entities to which this part 
applies are referred to in this part as ``you.''
    (2)(i) Nothing in this part modifies, limits, or supersedes the 
standards governing individually identifiable health information 
promulgated by the Secretary of Health and Human Services

[[Page 79029]]

under the authority of sections 262 and 264 of the Health Insurance 
Portability and Accountability Act of 1996 (42 U.S.C. 1320d-1320d-8).
    (ii) Any institution of higher education that complies with the 
Federal Educational Rights and Privacy Act (FERPA), 20 U.S.C. 1232g, 
and its implementing regulations, 34 CFR part 99, and that is also a 
financial institution described in Sec.  1016.3(l)(3) of this part, 
shall be deemed to be in compliance with this part if it is in 
compliance with FERPA.
    (3) Nothing in this part shall apply to:
    (i) A financial institution that is a person described in section 
1029(a) of the Consumer Financial Protection Act of 2010, Title X of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-
Frank Act), Public Law 111-203, 124 Stat. 1376 (12 U.S.C. 5519(a));
    (ii) A financial institution or other person subject to the 
jurisdiction on the Commodity Futures Trading Commission under 7 U.S.C. 
7b-2;
    (iii) A broker or dealer that is registered under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.);
    (iv) A registered investment adviser, properly registered by or on 
behalf of either the Securities Exchange Commission or any state, with 
respect to its investment advisory activities and its activities 
incidental to those investment advisory activities;
    (v) An investment company that is registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.); or
    (vi) An insurance company, with respect to its insurance activities 
and its activities incidental to those insurance activities, that is 
subject to supervision by a state insurance regulator.


Sec.  1016.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in the 
appendix to this part, consistent with the instructions in the appendix 
constitutes compliance with the notice content requirements of 
Sec. Sec.  1016.6 and 1016.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.


Sec.  1016.3  Definitions.

    As used in this part, unless the context requires otherwise:
    (a)(1) Affiliate means any company that controls, is controlled by, 
or is under common control with another company.
    (2) Examples in the case of a credit union. (i) An affiliate of a 
Federal credit union is a credit union service organization (CUSO), as 
provided in 12 CFR part 712, that is controlled by the Federal credit 
union.
    (ii) An affiliate of a federally-insured, state-chartered credit 
union is a company that is controlled by the credit union.
    (b)(1) Clear and conspicuous means that a notice is reasonably 
understandable and designed to call attention to the nature and 
significance of the information in the notice.
    (2) Examples. (i) Reasonably understandable. You make your notice 
reasonably understandable if you:
    (A) Present the information in the notice in clear, concise 
sentences, paragraphs, and sections;
    (B) Use short explanatory sentences or bullet lists whenever 
possible;
    (C) Use definite, concrete, everyday words and active voice 
whenever possible;
    (D) Avoid multiple negatives;
    (E) Avoid legal and highly technical business terminology whenever 
possible; and
    (F) Avoid explanations that are imprecise and readily subject to 
different interpretations.
    (ii) Designed to call attention. You design your notice to call 
attention to the nature and significance of the information in it if 
you:
    (A) Use a plain-language heading to call attention to the notice;
    (B) Use a typeface and type size that are easy to read;
    (C) Provide wide margins and ample line spacing;
    (D) Use boldface or italics for key words; and
    (E) In a form that combines your notice with other information, use 
distinctive type size, style, and graphic devices, such as shading or 
sidebars, when you combine your notice with other information.
    (iii) Notices on Web sites. If you provide a notice on a Web site, 
you design your notice to call attention to the nature and significance 
of the information in it if you use text or visual cues to encourage 
scrolling down the page if necessary to view the entire notice and 
ensure that other elements on the Web site (such as text, graphics, 
hyperlinks, or sound) do not distract attention from the notice, and 
you either:
    (A) Place the notice on a screen that consumers frequently access, 
such as a page on which transactions are conducted; or
    (B) Place a link on a screen that consumers frequently access, such 
as a page on which transactions are conducted, that connects directly 
to the notice and is labeled appropriately to convey the importance, 
nature, and relevance of the notice.
    (c) Collect means to obtain information that you organize or can 
retrieve by the name of an individual or by identifying number, symbol, 
or other identifying particular assigned to the individual, 
irrespective of the source of the underlying information.
    (d) Company means any corporation, limited liability company, 
business trust, general or limited partnership, association, or similar 
organization.
    (e)(1) Consumer means an individual who obtains or has obtained a 
financial product or service from you that is to be used primarily for 
personal, family, or household purposes, or that individual's legal 
representative.
    (2) Examples in the case of a financial institution other than a 
credit union. For purposes of this paragraph (e)(2), ``you'' is limited 
to financial institutions other than credit unions.
    (i) An individual who applies to you for credit for personal, 
family, or household purposes is a consumer of a financial service, 
regardless of whether the credit is extended.
    (ii) An individual who provides nonpublic personal information to 
you in order to obtain a determination about whether he or she may 
qualify for a loan to be used primarily for personal, family, or 
household purposes is a consumer of a financial service, regardless of 
whether the loan is extended.
    (iii) An individual who provides nonpublic personal information to 
you in connection with obtaining or seeking to obtain financial, 
investment, or economic advisory services is a consumer regardless of 
whether you establish a continuing advisory relationship.
    (iv) If you hold ownership or servicing rights to an individual's 
loan that is used primarily for personal, family, or household 
purposes, the individual is your consumer, even if you hold those 
rights in conjunction with one or more other institutions. (The 
individual is also a consumer with respect to the other financial 
institutions involved.) An individual who has a loan in which you have 
ownership or servicing rights is your consumer, even if you, or another 
institution with those rights, hire an agent to collect on the loan.
    (v) An individual who is a consumer of another financial 
institution is not your consumer solely because you act as agent for, 
or provide processing or other services to, that financial institution.

[[Page 79030]]

    (vi) An individual is not your consumer solely because he or she 
has designated you as trustee for a trust.
    (vii) An individual is not your consumer solely because he or she 
is a beneficiary of a trust for which you are a trustee.
    (viii) An individual is not your consumer solely because he or she 
is a participant or a beneficiary of an employee benefit plan that you 
sponsor or for which you act as a trustee or fiduciary.
    (3) Examples in the case of a credit union. For purposes of this 
paragraph (e)(3), ``you'' is limited to credit unions.
    (i) An individual who provides nonpublic personal information to 
you in connection with obtaining or seeking to obtain credit union 
membership is your consumer regardless of whether you establish a 
customer relationship.
    (ii) An individual who provides nonpublic personal information to 
you in connection with using your ATM is your consumer.
    (iii) If you hold ownership or servicing rights to an individual's 
loan, the individual is your consumer, even if you hold those rights in 
conjunction with one or more financial institutions. The individual is 
also a consumer with respect to the other financial institutions 
involved. This applies even if you, or another financial institution 
with those rights, hire an agent to collect on the loan or to provide 
processing or other services.
    (iv) An individual who is a consumer of another financial 
institution is not your consumer solely because you act as agent for, 
or provide processing or other services to, that financial institution.
    (v) An individual is not your consumer solely because he or she is 
a participant or a beneficiary of an employee benefit plan that you 
sponsor or for which you act as a trustee or fiduciary.
    (f) Consumer reporting agency has the same meaning as in section 
603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)).
    (g) Control of a company means:
    (1) Ownership, control, or power to vote 25 percent or more of the 
outstanding shares of any class of voting security of the company, 
directly or indirectly, or acting through one or more other persons;
    (2) Control in any manner over the election of a majority of the 
directors, trustees, or general partners (or individuals exercising 
similar functions) of the company; or
    (3) The power to exercise, directly or indirectly, a controlling 
influence over the management or policies of the company as determined 
by the applicable prudential regulator (as defined in 12 U.S.C. 
5481(24)), if any.
    (4) Example in the case of credit unions. A credit union is 
presumed to have a controlling influence over the management or 
policies of a CUSO, if the CUSO is 67% owned by credit unions.
    (h) Credit union means a Federal or state-chartered credit union 
that the National Credit Union Share Insurance Fund insures.
    (i) Customer means a consumer who has a customer relationship with 
you.
    (j)(1) Customer relationship means a continuing relationship 
between a consumer and you under which you provide one or more 
financial products or services to the consumer that are to be used 
primarily for personal, family, or household purposes. As noted in the 
examples, and for purposes of this part only, in the case of a credit 
union, a customer relationship will exist between a credit union and 
certain consumers that are not the credit union's members.
    (2) Examples in the case of financial institutions other than 
credit unions and covered entities subject to FTC enforcement 
jurisdiction. For purposes of this paragraph (j)(2), ``you'' is limited 
to financial institutions other than credit unions and financial 
institutions described in paragraph (l)(3) of this section.
    (i) Continuing relationship. A consumer has a continuing 
relationship with you if the consumer:
    (A) Has a deposit or investment account with you;
    (B) Obtains a loan from you;
    (C) Has a loan for which you own the servicing rights;
    (D) Purchases an insurance product from you;
    (E) Holds an investment product through you, such as when you act 
as a custodian for securities or for assets in an Individual Retirement 
Arrangement;
    (F) Enters into an agreement or understanding with you whereby you 
undertake to arrange or broker a home mortgage loan for the consumer;
    (G) Enters into a lease of personal property with you; or
    (H) Obtains financial, investment, or economic advisory services 
from you for a fee.
    (ii) No continuing relationship. A consumer does not, however, have 
a continuing relationship with you if:
    (A) The consumer obtains a financial product or service only in 
isolated transactions, such as using your ATM to withdraw cash from an 
account at another financial institution or purchasing a cashier's 
check or money order;
    (B) You sell the consumer's loan and do not retain the rights to 
service that loan; or
    (C) You sell the consumer airline tickets, travel insurance, or 
traveler's checks in isolated transactions.
    (3) Examples in the case of covered entities subject to FTC 
enforcement jurisdiction. For purposes of this paragraph (j)(3), 
``you'' is limited to financial institutions described in paragraph 
(l)(3) of this section.
    (i) Continuing relationship. A consumer has a continuing 
relationship with you if the consumer:
    (A) Has a credit or investment account with you;
    (B) Obtains a loan from you;
    (C) Purchases an insurance product from you;
    (D) Holds an investment product through you, such as when you act 
as a custodian for securities or for assets in an Individual Retirement 
Arrangement;
    (E) Enters into an agreement or understanding with you whereby you 
undertake to arrange or broker a home mortgage loan, or credit to 
purchase a vehicle, for the consumer;
    (F) Enters into a lease of personal property on a non-operating 
basis with you;
    (G) Obtains financial, investment, or economic advisory services 
from you for a fee;
    (H) Becomes your client for the purpose of obtaining tax 
preparation or credit counseling services from you;
    (I) Obtains career counseling while seeking employment with a 
financial institution or the finance, accounting, or audit department 
of any company (or while employed by such a financial institution or 
department of any company);
    (J) Is obligated on an account that you purchase from another 
financial institution, regardless of whether the account is in default 
when purchased, unless you do not locate the consumer or attempt to 
collect any amount from the consumer on the account;
    (K) Obtains real estate settlement services from you; or
    (L) Has a loan for which you own the servicing rights.
    (ii) No continuing relationship. A consumer does not, however, have 
a continuing relationship with you if:
    (A) The consumer obtains a financial product or service from you 
only in isolated transactions, such as using your ATM to withdraw cash 
from an account at another financial institution; purchasing a money 
order from you; cashing a check with you; or making a wire transfer 
through you;
    (B) You sell the consumer's loan and do not retain the rights to 
service that loan;

[[Page 79031]]

    (C) You sell the consumer airline tickets, travel insurance, or 
traveler's checks in isolated transactions;
    (D) The consumer obtains one-time personal or real property 
appraisal services from you; or
    (E) The consumer purchases checks for a personal checking account 
from you.
    (4) Examples in the case of a credit union. (i) Continuing 
relationship. A consumer has a continuing relationship with a credit 
union if the consumer:
    (A) Is a member as defined in the credit union's bylaws;
    (B) Is a nonmember who has a share, share draft, or credit card 
account with the credit union jointly with a member;
    (C) Is a nonmember who has a loan that the credit union services;
    (D) Is a nonmember who has an account with a credit union that has 
been designated as a low-income credit union; or
    (E) Is a nonmember who has an account in a federally-insured, 
state-chartered credit union pursuant to state law.
    (ii) No continuing relationship. A consumer does not, however, have 
a continuing relationship with a credit union if the consumer is a 
nonmember and:
    (A) The consumer only obtains a financial product or service in 
isolated transactions, such as using the credit union's ATM to withdraw 
cash from an account maintained at another financial institution or 
purchasing travelers checks; or
    (B) The credit union sells the consumer's loan and does not retain 
the rights to service that loan.
    (k) Federal functional regulator means:
    (1) The Board of Governors of the Federal Reserve System;
    (2) The Office of the Comptroller of the Currency;
    (3) The Board of Directors of the Federal Deposit Insurance 
Corporation;
    (4) The National Credit Union Administration Board; and
    (5) The Securities and Exchange Commission.
    (l)(1) Except for entities described in paragraph (l)(3) of this 
section, financial institution means any institution the business of 
which is engaging in activities that are financial in nature or 
incidental to such financial activities as described in section 4(k) of 
the Bank Holding Company Act of 1956 (12 U.S.C. 1843(k)).
    (2) For purposes of paragraph (l)(1) of this section, financial 
institution does not include:
    (i) Any person or entity with respect to any financial activity 
that is subject to the jurisdiction of the Commodity Futures Trading 
Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.);
    (ii) The Federal Agricultural Mortgage Corporation or any entity 
chartered and operating under the Farm Credit Act of 1971 (12 U.S.C. 
2001 et seq.); or
    (iii) Institutions chartered by Congress specifically to engage in 
securitizations, secondary market sales (including sales of servicing 
rights), or similar transactions related to a transaction of a 
consumer, as long as such institutions do not sell or transfer 
nonpublic personal information to a nonaffiliated third party.
    (3)(i) Special definition for entities subject to the Federal Trade 
Commission's enforcement jurisdiction. In the case of an entity 
described in section 505(a)(7) of the GLB Act (other than such an 
entity described in section 504(a)(1)(C) of that Act), financial 
institution means any institution the business of which is engaging in 
financial activities as described in section 4(k) of the Bank Holding 
Company Act of 1956 (12 U.S.C. 1843(k)). For purposes of this paragraph 
(l)(3), an institution that is significantly engaged in financial 
activities is a financial institution.
    (ii) Examples of financial institution. For purposes of this 
paragraph (l)(3):
    (A) A retailer that extends credit by issuing its own credit card 
directly to consumers is a financial institution because extending 
credit is a financial activity listed in 12 CFR 225.28(b)(1) and 
referenced in section 4(k)(4)(F) of the Bank Holding Company Act and 
issuing that extension of credit through a proprietary credit card 
demonstrates that a retailer is significantly engaged in extending 
credit.
    (B) A personal property or real estate appraiser is a financial 
institution because real and personal property appraisal is a financial 
activity listed in 12 CFR 225.28(b)(2)(i) and referenced in section 
4(k)(4)(F) of the Bank Holding Company Act.
    (C) An automobile dealership that is not described in section 
1029(a) of the Dodd-Frank Act (12 U.S.C. 5519(a)) and that, as a usual 
part of its business, leases automobiles on a nonoperating basis for 
longer than 90 days is a financial institution with respect to its 
leasing business because leasing personal property on a nonoperating 
basis where the initial term of the lease is at least 90 days is a 
financial activity listed in 12 CFR 225.28(b)(3) and referenced in 
section 4(k)(4)(F) of the Bank Holding Company Act.
    (D) A career counselor that specializes in providing career 
counseling services to individuals currently employed by or recently 
displaced from a financial organization, individuals who are seeking 
employment with a financial organization, or individuals who are 
currently employed by or seeking placement with the finance, accounting 
or audit departments of any company is a financial institution because 
such career counseling activities are financial activities listed in 12 
CFR 225.28(b)(9)(iii) and referenced in section 4(k)(4)(F) of the Bank 
Holding Company Act.
    (E) A business that prints and sells checks for consumers, either 
as its sole business or as one of its product lines, is a financial 
institution because printing and selling checks is a financial activity 
that is listed in 12 CFR 225.28(b)(10)(ii) and referenced in section 
4(k)(4)(F) of the Bank Holding Company Act.
    (F) A business that regularly wires money to and from consumers is 
a financial institution because transferring money is a financial 
activity referenced in section 4(k)(4)(A) of the Bank Holding Company 
Act and regularly providing that service demonstrates that the business 
is significantly engaged in that activity.
    (G) A check cashing business is a financial institution because 
cashing a check is exchanging money, which is a financial activity 
listed in section 4(k)(4)(A) of the Bank Holding Company Act.
    (H) An accountant or other tax preparation service that is in the 
business of completing income tax returns is a financial institution 
because tax preparation services is a financial activity listed in 12 
CFR 225.28(b)(6)(vi) and referenced in section 4(k)(4)(G) of the Bank 
Holding Company Act.
    (I) A business that operates a travel agency in connection with 
financial services is a financial institution because operating a 
travel agency in connection with financial services is a financial 
activity listed in 12 CFR 211.5(d)(15) and referenced in section 
4(k)(4)(G) of the Bank Holding Company Act.
    (J) An entity that provides real estate settlement services is a 
financial institution because providing real estate settlement services 
is a financial activity listed in 12 CFR 225.28(b)(2)(viii) and 
referenced in section 4(k)(4)(F) of the Bank Holding Company Act.
    (K) A mortgage broker is a financial institution because brokering 
loans is a financial activity listed in 12 CFR 225.28(b)(1) and 
referenced in section 4(k)(4)(F) of the Bank Holding Company Act.

[[Page 79032]]

    (L) An investment advisory company and a credit counseling service 
are each financial institutions because providing financial and 
investment advisory services are financial activities referenced in 
section 4(k)(4)(C) of the Bank Holding Company Act.
    (iii) For purposes of this paragraph (l)(3), financial institution 
does not include:
    (A) Any person or entity with respect to any financial activity 
that is subject to the jurisdiction of the Commodity Futures Trading 
Commission under the Commodity Exchange Act (7 U.S.C. 1 et seq.);
    (B) The Federal Agricultural Mortgage Corporation or any entity 
chartered and operating under the Farm Credit Act of 1971 (12 U.S.C. 
2001 et seq.); or
    (C) Institutions chartered by Congress specifically to engage in 
securitizations, secondary market sales (including sales of servicing 
rights) or similar transactions related to a transaction of a consumer, 
as long as such institutions do not sell or transfer nonpublic personal 
information to a nonaffiliated third party other than as permitted by 
Sec. Sec.  1016.14 and 1016.15 of this part.
    (D) Entities that engage in financial activities but that are not 
significantly engaged in those financial activities.
    (iv) Examples of entities that are not significantly engaged in 
financial activities. (A) A retailer is not a financial institution if 
its only means of extending credit are occasional ``lay away'' and 
deferred payment plans or accepting payment by means of credit cards 
issued by others.
    (B) A retailer is not a financial institution merely because it 
accepts payment in the form of cash, checks, or credit cards that it 
did not issue.
    (C) A merchant is not a financial institution merely because it 
allows an individual to ``run a tab.''
    (D) A grocery store is not a financial institution merely because 
it allows individuals to whom it sells groceries to cash a check, or 
write a check for a higher amount than the grocery purchase and obtain 
cash in return.
    (m)(1) Financial product or service means any product or service 
that a financial holding company could offer by engaging in an activity 
that is financial in nature or incidental to such a financial activity 
under section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(k)).
    (2) Special definition for entities subject to the Federal Trade 
Commission's enforcement jurisdiction. In the case of an entity 
described in section 505(a)(7) of the GLB Act (other than such an 
entity described in section 504(a)(1)(C) of that Act), financial 
product or service means any product or service that a financial 
holding company could offer by engaging in a financial activity under 
section 4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(k)).
    (3) Financial service includes your evaluation or brokerage of 
information that you collect in connection with a request or an 
application from a consumer for a financial product or service.
    (n) Member means a consumer who is a member of a credit union, as 
defined in the credit union's bylaws.
    (o)(1) Nonaffiliated third party means any person except:
    (i) Your affiliate; or
    (ii) A person employed jointly by you and any company that is not 
your affiliate (but nonaffiliated third party includes the other 
company that jointly employs the person).
    (2) Nonaffiliated third party includes, for financial institutions 
other than credit unions, any company that is an affiliate solely by 
virtue of your or your affiliate's direct or indirect ownership or 
control of the company in conducting merchant banking or investment 
banking activities of the type described in section 4(k)(4)(H) or 
insurance company investment activities of the type described in 
section 4(k)(4)(I) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1843(k)(4)(H) and (I)).
    (p)(1) Nonpublic personal information means:
    (i) Personally identifiable financial information; and
    (ii) Any list, description, or other grouping of consumers (and 
publicly available information pertaining to them) that is derived 
using any personally identifiable financial information that is not 
publicly available.
    (2) Nonpublic personal information does not include:
    (i) Publicly available information, except as included on a list 
described in paragraph (p)(1)(ii) of this section; or
    (ii) Any list, description, or other grouping of consumers (and 
publicly available information pertaining to them) that is derived 
without using any personally identifiable financial information that is 
not publicly available.
    (3) Examples of lists. (i) Nonpublic personal information includes 
any list of individuals' names and street addresses that is derived in 
whole or in part using personally identifiable financial information 
that is not publicly available, such as account numbers.
    (ii) Nonpublic personal information does not include any list of 
individuals' names and addresses that contains only publicly available 
information, is not derived in whole or in part using personally 
identifiable financial information that is not publicly available, and 
is not disclosed in a manner that indicates that any of the individuals 
on the list is a consumer of a financial institution.
    (q)(1) Personally identifiable financial information means any 
information:
    (i) A consumer provides to you to obtain a financial product or 
service from you;
    (ii) About a consumer resulting from any transaction involving a 
financial product or service between you and a consumer; or
    (iii) You otherwise obtain about a consumer in connection with 
providing a financial product or service to that consumer.
    (2) Examples. (i) Information included. Personally identifiable 
financial information includes:
    (A) Information a consumer provides to you on an application to 
obtain a loan, a credit card, a credit union membership, or other 
financial product or service;
    (B) Account balance information, payment history, overdraft 
history, and credit or debit card purchase information;
    (C) The fact that an individual is or has been one of your 
customers or has obtained a financial product or service from you;
    (D) Any information about your consumer if it is disclosed in a 
manner that indicates that the individual is or has been your consumer;
    (E) Any information that a consumer provides to you or that you or 
your agent otherwise obtain in connection with collecting on, or 
servicing, a loan or a credit account;
    (F) Any information you collect through an internet ``cookie'' (an 
information collecting device from a Web server); and
    (G) Information from a consumer report.
    (ii) Information not included. Personally identifiable financial 
information does not include:
    (A) A list of names and addresses of customers of an entity that is 
not a financial institution; and
    (B) Information that does not identify a consumer, such as 
aggregate information or blind data that does not contain personal 
identifiers such as account numbers, names, or addresses.
    (r)(1) Publicly available information means any information that 
you have a reasonable basis to believe is lawfully made available to 
the general public from:

[[Page 79033]]

    (i) Federal, state, or local government records;
    (ii) Widely distributed media; or
    (iii) Disclosures to the general public that are required to be 
made by Federal, state, or local law.
    (2) Reasonable basis. You have a reasonable basis to believe that 
information is lawfully made available to the general public if you 
have taken steps to determine:
    (i) That the information is of the type that is available to the 
general public; and
    (ii) Whether an individual can direct that the information not be 
made available to the general public and, if so, that your consumer has 
not done so.
    (3) Examples. (i) Government records. Publicly available 
information in government records includes information in government 
real estate records and security interest filings.
    (ii) Widely distributed media. Publicly available information from 
widely distributed media includes information from a telephone book, a 
television or radio program, a newspaper, or a Web site that is 
available to the general public on an unrestricted basis. A Web site is 
not restricted merely because an Internet service provider or a site 
operator requires a fee or a password, so long as access is available 
to the general public.
    (iii) Reasonable basis. (A) You have a reasonable basis to believe 
that mortgage information is lawfully made available to the general 
public if you have determined that the information is of the type 
included on the public record in the jurisdiction where the mortgage 
would be recorded.
    (B) You have a reasonable basis to believe that an individual's 
telephone number is lawfully made available to the general public if 
you have located the telephone number in the telephone book or the 
consumer has informed you that the telephone number is not unlisted.
    (s)(1) You means a financial institution or other person for which 
the Bureau has rulemaking authority under section 504(a)(1)(A) of the 
GLB Act (15 U.S.C. 6804(a)(1)(A)).
    (2) You does not include:
    (i) A financial institution that is a person described in section 
1029(a) of the Consumer Financial Protection Act of 2010 (12 U.S.C. 
5519(a));
    (ii) A financial institution or other person subject to the 
jurisdiction on the Commodity Futures Trading Commission under 7 U.S.C. 
7b-2;
    (iii) A broker or dealer that is registered under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.);
    (iv) A registered investment adviser, properly registered by or on 
behalf of either the Securities Exchange Commission or any State, with 
respect to its investment advisory activities and its activities 
incidental to those investment advisory activities;
    (v) An investment company that is registered under the Investment 
Company Act of 1940 (15 U.S.C. 80a-1 et seq.); or
    (vi) An insurance company, with respect to its insurance activities 
and its activities incidental to those insurance activities, that is 
subject to supervision by a State insurance regulator.

Subpart A--Privacy and Opt Out Notices


Sec.  1016.4  Initial privacy notice to consumers required.

    (a) Initial notice requirement. You must provide a clear and 
conspicuous notice that accurately reflects your privacy policies and 
practices to:
    (1) Customer. An individual who becomes your customer, not later 
than when you establish a customer relationship, except as provided in 
paragraph (e) of this section; and
    (2) Consumer. A consumer, before you disclose any nonpublic 
personal information about the consumer to any nonaffiliated third 
party, if you make such a disclosure other than as authorized by 
Sec. Sec.  1016.14 and 1016.15 of this part.
    (b) When initial notice to a consumer is not required. You are not 
required to provide an initial notice to a consumer under paragraph (a) 
of this section if:
    (1) You do not disclose any nonpublic personal information about 
the consumer to any nonaffiliated third party, other than as authorized 
by Sec. Sec.  1016.14 and 1016.15; and
    (2) You do not have a customer relationship with the consumer.
    (c) When you establish a customer relationship. (1) General rule. 
You establish a customer relationship when you and the consumer enter 
into a continuing relationship.
    (2) Special rule for loans. You establish a customer relationship 
with a consumer when you originate or acquire the servicing rights to a 
loan to the consumer for personal, family, or household purposes. If 
you subsequently transfer the servicing rights to that loan to another 
financial institution, the customer relationship transfers with the 
servicing rights.
    (3) Examples. (i) Examples of establishing customer relationship by 
financial institutions other than credit unions and covered entities 
subject to FTC enforcement jurisdiction. For purposes of this paragraph 
(c)(3)(i), ``you'' is limited to financial institutions other than 
credit unions and financial institutions described in Sec.  
1016.3(l)(3). You establish a customer relationship when the consumer:
    (A) Opens a credit card account with you;
    (B) Executes the contract to open a deposit account with you, 
obtains credit from you, or purchases insurance from you;
    (C) Agrees to obtain financial, economic, or investment advisory 
services from you for a fee; or
    (D) Becomes your client for the purpose of your providing credit 
counseling or tax preparation services.
    (ii) Examples of establishing customer relationship by covered 
entities subject to FTC enforcement jurisdiction. For purposes of this 
paragraph (c)(3)(ii), ``you'' is limited to financial institutions 
described in Sec.  1016.3(l)(3) of this part. You establish a customer 
relationship when the consumer:
    (A) Opens a credit card account with you;
    (B) Executes the contract to obtain credit from you or purchases 
insurance from you;
    (C) Agrees to obtain financial, economic, or investment advisory 
services from you for a fee;
    (D) Becomes your client for the purpose of your providing credit 
counseling or tax preparation services or to obtain career counseling 
while seeking employment with a financial institution or the finance, 
accounting, or audit department of any company (or while employed by 
such a company or financial institution);
    (E) Provides any personally identifiable financial information to 
you in an effort to obtain a mortgage loan through you;
    (F) Executes the lease for personal property with you;
    (G) Is an obligor on an account that you purchased from another 
financial institution and whom you have located and begun attempting to 
collect amounts owed on the account; or
    (H) Provides you with the information necessary for you to compile 
and provide access to all of the consumer's online financial accounts 
at your Web site.
    (iii) Examples of establishing customer relationship by credit 
unions. For purposes of this paragraph (c)(3)(iii), ``you'' is limited 
to a credit union. You establish a customer relationship when the 
consumer:
    (A) Becomes your member under your bylaws;
    (B) Is a nonmember and opens a credit card account with you jointly 
with a member under your procedures;

[[Page 79034]]

    (C) Is a nonmember and executes the contract to open a share or 
share draft account with you or obtains credit from you jointly with a 
member, including an individual acting as a guarantor;
    (D) Is a nonmember and opens an account with you and you are a 
credit union designated as a low-income credit union;
    (E) Is a nonmember and opens an account with you pursuant to State 
law and you are a State-chartered credit union.
    (iv) Examples of loan rule. You establish a customer relationship 
with a consumer who obtains a loan for personal, family, or household 
purposes when you:
    (A) Originate the loan to the consumer; or
    (B) Purchase the servicing rights to the consumer's loan.
    (d) Existing customers. When an existing customer obtains a new 
financial product or service from you that is to be used primarily for 
personal, family, or household purposes, you satisfy the initial notice 
requirements of paragraph (a) of this section as follows:
    (1) You may provide a revised privacy notice, under Sec.  1016.8 of 
this part, that covers the customer's new financial product or service; 
or
    (2) If the initial, revised, or annual notice that you most 
recently provided to that customer was accurate with respect to the new 
financial product or service, you do not need to provide a new privacy 
notice under paragraph (a) of this section.
    (e) Exceptions to allow subsequent delivery of notice. (1) You may 
provide the initial notice required by paragraph (a)(1) of this section 
within a reasonable time after you establish a customer relationship 
if:
    (i) Establishing the customer relationship is not at the customer's 
election; or
    (ii) Providing notice not later than when you establish a customer 
relationship would substantially delay the customer's transaction and 
the customer agrees to receive the notice at a later time.
    (2) Examples of exceptions. (i) Not at customer's election. (A) In 
the case of financial institutions other than credit unions and 
financial institutions described in Sec.  1016.3(l)(3), establishing a 
customer relationship is not at the customer's election if you acquire 
a customer's deposit liability or the servicing rights to a customer's 
loan from another financial institution and the customer does not have 
a choice about your acquisition.
    (B) In the case of financial institutions described in Sec.  
1016.3(l)(3), establishing a customer relationship is not at the 
customer's election if you acquire a customer's loan or the servicing 
rights from another financial institution and the customer does not 
have a choice about your acquisition.
    (C) In the case of credit unions, establishing a customer 
relationship is not at the customer's election if you acquire a 
customer's deposit liability from another financial institution and the 
customer does not have a choice about your acquisition.
    (ii) Substantial delay of customer's transaction. Providing notice 
not later than when you establish a customer relationship would 
substantially delay the customer's transaction when:
    (A) You and the individual agree over the telephone to enter into a 
customer relationship involving prompt delivery of the financial 
product or service; or
    (B) You establish a customer relationship with an individual under 
a program authorized by Title IV of the Higher Education Act of 1965 
(20 U.S.C. 1070 et seq.) or similar student loan programs where loan 
proceeds are disbursed promptly without prior communication between you 
and the customer.
    (iii) No substantial delay of customer's transaction. Providing 
notice not later than when you establish a customer relationship would 
not substantially delay the customer's transaction when the 
relationship is initiated in person at your office or through other 
means by which the customer may view the notice, such as on a Web site.
    (f) Delivery. When you are required to deliver an initial privacy 
notice by this section, you must deliver it according to Sec.  1016.9 
of this part. If you use a short-form initial notice for non-customers 
according to Sec.  1016.6(d) of this part, you may deliver your privacy 
notice according to Sec.  1016.6(d)(3).


Sec.  1016.5  Annual privacy notice to customers required.

    (a)(1) General rule. You must provide a clear and conspicuous 
notice to customers that accurately reflects your privacy policies and 
practices not less than annually during the continuation of the 
customer relationship. Annually means at least once in any period of 12 
consecutive months during which that relationship exists. You may 
define the 12-consecutive-month period, but you must apply it to the 
customer on a consistent basis.
    (2) Example. You provide a notice annually if you define the 12-
consecutive-month period as a calendar year and provide the annual 
notice to the customer once in each calendar year following the 
calendar year in which you provided the initial notice. For example, if 
a customer opens an account on any day of year 1, you must provide an 
annual notice to that customer by December 31 of year 2.
    (b)(1) Termination of customer relationship. You are not required 
to provide an annual notice to a former customer.
    (2) Examples in the case of financial institutions other than 
credit unions and covered entities subject to FTC enforcement 
jurisdiction. For purposes of this paragraph (b)(2), ``you'' is limited 
to financial institutions other than credit unions and financial 
institutions described in Sec.  1016.3(l)(3). Your customer becomes a 
former customer when:
    (i) In the case of a deposit account, the account is inactive under 
your policies;
    (ii) In the case of a closed-end loan, the customer pays the loan 
in full, you charge off the loan, or you sell the loan without 
retaining servicing rights;
    (iii) In the case of a credit card relationship or other open-end 
credit relationship, you no longer provide any statements or notices to 
the customer concerning that relationship or you sell the credit card 
receivables without retaining servicing rights; or
    (iv) You have not communicated with the customer about the 
relationship for a period of 12 consecutive months, other than to 
provide annual privacy notices or promotional material.
    (3) Examples in the case of covered entities subject to FTC 
enforcement jurisdiction. For purposes of this paragraph (b)(3), 
``you'' is limited to financial institutions described in Sec.  
1016.3(l)(3) of this part. Your customer becomes a former customer 
when:
    (i) In the case of a closed-end loan, the customer pays the loan in 
full, you charge off the loan, or you sell the loan without retaining 
servicing rights;
    (ii) In the case of a credit card relationship or other open-end 
credit relationship, you sell the receivables without retaining 
servicing rights;
    (iii) In the case of credit counseling services, the customer has 
failed to make required payments under a debt management plan, has been 
notified that the plan is terminated, and you no longer provide any 
statements or notices to the customer concerning that relationship;
    (iv) In the case of mortgage or vehicle loan brokering services, 
your customer has obtained a loan through you (and you no longer 
provide any statements or notices to the customer concerning that 
relationship), or has ceased using your services for such purposes;

[[Page 79035]]

    (v) In the case of tax preparation services, you have provided and 
received payment for the service and no longer provide any statements 
or notices to the customer concerning that relationship;
    (vi) In the case of providing real estate settlement services, at 
the time the customer completes execution of all documents related to 
the real estate closing, you have received payment, or you have 
completed all of your responsibilities with respect to the settlement, 
including filing documents on the public record, whichever is later; or
    (vii) In cases where there is no definitive time at which the 
customer relationship has terminated, you have not communicated with 
the customer about the relationship for a period of 12 consecutive 
months, other than to provide annual privacy notices or promotional 
material.
    (4) Examples in the case of a credit union. An individual becomes a 
former customer of a credit union when:
    (i) The individual is no longer the credit union's member as 
defined in the credit union's bylaws;
    (ii) In the case of a nonmember's share or share draft account, the 
account is inactive under the credit union's policies;
    (iii) In the case of a nonmember's closed-end loan, the loan is 
paid in full, the credit union charges off the loan, or the credit 
union sells the loan without retaining servicing rights;
    (iii) In the case of a credit card relationship or other open-end 
credit relationship with a nonmember, the credit union no longer 
provides any statements or notices to the nonmember concerning that 
relationship, or the credit union sells the credit card receivables 
without retaining servicing rights; or
    (v) The credit union has not communicated with the nonmember about 
the relationship for a period of 12 consecutive months, other than to 
provide annual privacy notices or promotional material.
    (c) Special rule for loans in the case of a financial institution 
other than a credit union. If a financial institution other than a 
credit union does not have a customer relationship with a consumer 
under the special rule for loans in Sec.  1016.4(c)(2) of this part, 
then it need not provide an annual notice to that consumer under this 
section.
    (d) Delivery. When you are required to deliver an annual privacy 
notice by this section, you must deliver it according to Sec.  1016.9 
of this part.


Sec.  1016.6  Information to be included in privacy notices.

    (a) General rule. The initial, annual, and revised privacy notices 
that you provide under Sec. Sec.  1016.4, 1016.5, and 1016.8 of this 
part must include each of the following items of information, in 
addition to any other information you wish to provide, that applies to 
you and to the consumers to whom you send your privacy notice:
    (1) The categories of nonpublic personal information that you 
collect;
    (2) The categories of nonpublic personal information that you 
disclose;
    (3) The categories of affiliates and nonaffiliated third parties to 
whom you disclose nonpublic personal information, other than those 
parties to whom you disclose information under Sec. Sec.  1016.14 and 
1016.15 of this part;
    (4) The categories of nonpublic personal information about your 
former customers that you disclose and the categories of affiliates and 
nonaffiliated third parties to whom you disclose nonpublic personal 
information about your former customers, other than those parties to 
whom you disclose information under Sec. Sec.  1016.14 and 1016.15;
    (5) If you disclose nonpublic personal information to a 
nonaffiliated third party under Sec.  1016.13 (and no other exception 
in Sec.  1016.14 or Sec.  1016.15 applies to that disclosure), a 
separate statement of the categories of information you disclose and 
the categories of third parties with whom you have contracted;
    (6) An explanation of the consumer's right under Sec.  1016.10(a) 
of this part to opt out of the disclosure of nonpublic personal 
information to nonaffiliated third parties, including the method(s) by 
which the consumer may exercise that right at that time;
    (7) Any disclosures that you make under section 603(d)(2)(A)(iii) 
of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)(iii)) (that 
is, notices regarding the ability to opt out of disclosures of 
information among affiliates);
    (8) Your policies and practices with respect to protecting the 
confidentiality and security of nonpublic personal information; and
    (9) Any disclosure that you make under paragraph (b) of this 
section.
    (b) Description of nonaffiliated third parties subject to 
exceptions. If you disclose nonpublic personal information to third 
parties as authorized under Sec. Sec.  1016.14 and 1016.15, you are not 
required to list those exceptions in the initial or annual privacy 
notices required by Sec. Sec.  1016.4 and 1016.5. When describing the 
categories with respect to those parties, it is sufficient to state 
that you make disclosures to other nonaffiliated companies:
    (1) For your everyday business purposes, such as [include all that 
apply] to process transactions, maintain account(s), respond to court 
orders and legal investigations, or report to credit bureaus; or
    (2) As permitted by law.
    (c) Examples. (1) Categories of nonpublic personal information that 
you collect. You satisfy the requirement to categorize the nonpublic 
personal information that you collect if you list the following 
categories, as applicable:
    (i) Information from the consumer;
    (ii) Information about the consumer's transactions with you or your 
affiliates;
    (iii) Information about the consumer's transactions with 
nonaffiliated third parties; and
    (iv) Information from a consumer reporting agency.
    (2) Categories of nonpublic personal information you disclose. (i) 
You satisfy the requirement to categorize the nonpublic personal 
information that you disclose if you list the categories described in 
paragraph (c)(1) of this section, as applicable, and a few examples to 
illustrate the types of information in each category.
    (ii) If you reserve the right to disclose all of the nonpublic 
personal information about consumers that you collect, you may simply 
state that fact without describing the categories or examples of the 
nonpublic personal information you disclose.
    (3) Categories of affiliates and nonaffiliated third parties to 
whom you disclose. You satisfy the requirement to categorize the 
affiliates and nonaffiliated third parties to whom you disclose 
nonpublic personal information if you list the following categories, as 
applicable, and a few examples to illustrate the types of third parties 
in each category.
    (i) Financial service providers, followed by illustrative examples 
such as mortgage bankers, securities broker-dealers, and insurance 
agents;
    (ii) Non-financial companies, followed by illustrative examples 
such as retailers, magazine publishers, airlines, and direct marketers; 
and
    (iii) Others, followed by examples such as nonprofit organizations.
    (4) Disclosures under exception for service providers and joint 
marketers. If you disclose nonpublic personal information under the 
exception in Sec.  1016.13 of this part to a nonaffiliated third party 
to market products or services that you offer alone or jointly with 
another financial institution, you

[[Page 79036]]

satisfy the disclosure requirement of paragraph (a)(5) of this section 
if you:
    (i) List the categories of nonpublic personal information you 
disclose, using the same categories and examples you used to meet the 
requirements of paragraph (a)(2) of this section, as applicable; and
    (ii) State whether the third party is:
    (A) A service provider that performs marketing services on your 
behalf or on behalf of you and another financial institution; or
    (B) A financial institution with whom you have a joint marketing 
agreement.
    (5) Simplified notices. If you do not disclose, and do not wish to 
reserve the right to disclose, nonpublic personal information about 
customers or former customers to affiliates or nonaffiliated third 
parties except as authorized under Sec. Sec.  1016.14 and 1016.15, you 
may simply state that fact, in addition to the information you must 
provide under paragraphs (a)(1), (a)(8), (a)(9), and (b) of this 
section.
    (6) Confidentiality and security. You describe your policies and 
practices with respect to protecting the confidentiality and security 
of nonpublic personal information if you do both of the following:
    (i) Describe in general terms who is authorized to have access to 
the information; and
    (ii) State whether you have security practices and procedures in 
place to ensure the confidentiality of the information in accordance 
with your policy. You are not required to describe technical 
information about the safeguards you use.
    (d) Short-form initial notice with opt out notice for non-
customers. (1) You may satisfy the initial notice requirements in 
Sec. Sec.  1016.4(a)(2), 1016.7(b), and 1016.7(c) of this part for a 
consumer who is not a customer by providing a short-form initial notice 
at the same time as you deliver an opt out notice as required in Sec.  
1016.7.
    (2) A short-form initial notice must:
    (i) Be clear and conspicuous;
    (ii) State that your privacy notice is available upon request; and
    (iii) Explain a reasonable means by which the consumer may obtain 
that notice.
    (3) You must deliver your short-form initial notice according to 
Sec.  1016.9. You are not required to deliver your privacy notice with 
your short-form initial notice. You instead may simply provide the 
consumer a reasonable means to obtain your privacy notice. If a 
consumer who receives your short-form notice requests your privacy 
notice, you must deliver your privacy notice according to Sec.  1016.9.
    (4) Examples of obtaining privacy notice. You provide a reasonable 
means by which a consumer may obtain a copy of your privacy notice if 
you:
    (i) Provide a toll-free telephone number that the consumer may call 
to request the notice; or
    (ii) For a consumer who conducts business in person at your office, 
maintain copies of the notice on hand that you provide to the consumer 
immediately upon request.
    (e) Future disclosures. Your notice may include:
    (1) Categories of nonpublic personal information that you reserve 
the right to disclose in the future, but do not currently disclose; and
    (2) Categories of affiliates or nonaffiliated third parties to whom 
you reserve the right in the future to disclose, but to whom you do not 
currently disclose, nonpublic personal information.
    (f) Model privacy form. Pursuant to Sec.  1016.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in the appendix to this part.


Sec.  1016.7  Form of opt out notice to consumers; opt out methods.

    (a)(1) Form of opt out notice. If you are required to provide an 
opt out notice under Sec.  1016.10(a), you must provide a clear and 
conspicuous notice to each of your consumers that accurately explains 
the right to opt out under that section. The notice must state:
    (i) That you disclose or reserve the right to disclose nonpublic 
personal information about your consumer to a nonaffiliated third 
party;
    (ii) That the consumer has the right to opt out of that disclosure; 
and
    (iii) A reasonable means by which the consumer may exercise the opt 
out right.
    (2) Examples. (i) Adequate opt out notice. You provide adequate 
notice that the consumer can opt out of the disclosure of nonpublic 
personal information to a nonaffiliated third party if you:
    (A) Identify all of the categories of nonpublic personal 
information that you disclose or reserve the right to disclose, and all 
of the categories of nonaffiliated third parties to which you disclose 
the information, as described in Sec.  1016.6(a)(2) and (3) of this 
part, and state that the consumer can opt out of the disclosure of that 
information; and
    (B) Identify the financial products or services that the consumer 
obtains from you, either singly or jointly, to which the opt out 
direction would apply.
    (ii) Reasonable opt out means. You provide a reasonable means to 
exercise an opt out right if you:
    (A) Designate check-off boxes in a prominent position on the 
relevant forms with the opt out notice;
    (B) Include a reply form together with the opt out notice that, in 
the case of financial institutions described in Sec.  1016.3(l)(3) of 
this part, includes the address to which the form should be mailed;
    (C) Provide an electronic means to opt out, such as a form that can 
be sent via electronic mail or a process at your Web site, if the 
consumer agrees to the electronic delivery of information; or
    (D) Provide a toll-free telephone number that consumers may call to 
opt out.
    (iii) Unreasonable opt out means. You do not provide a reasonable 
means of opting out if:
    (A) The only means of opting out is for the consumer to write his 
or her own letter to exercise that opt out right; or
    (B) The only means of opting out as described in any notice 
subsequent to the initial notice is to use a check-off box that you 
provided with the initial notice but did not include with the 
subsequent notice.
    (iv) Specific opt out means. You may require each consumer to opt 
out through a specific means, as long as that means is reasonable for 
that consumer.
    (b) Same form as initial notice permitted. You may provide the opt 
out notice together with or on the same written or electronic form as 
the initial notice you provide in accordance with Sec.  1016.4.
    (c) Initial notice required when opt out notice delivered 
subsequent to initial notice. If you provide the opt out notice later 
than required for the initial notice in accordance with Sec.  1016.4 of 
this part, you must also include a copy of the initial notice with the 
opt out notice in writing or, if the consumer agrees, electronically.
    (d) Joint relationships in the case of financial institutions other 
than credit unions and covered entities subject to FTC enforcement 
jurisdiction. For purposes of this paragraph (d), ``you'' is limited to 
financial institutions other than credit unions and financial 
institutions described in Sec.  1016.3(l)(3) of this part.
    (1) If two or more consumers jointly obtain a financial product or 
service from you, you may provide a single opt out notice. Your opt out 
notice must explain how you will treat an opt out direction by a joint 
consumer (as explained in paragraph (d)(5) of this section).
    (2) Any of the joint consumers may exercise the right to opt out. 
You may either:

[[Page 79037]]

    (i) Treat an opt out direction by a joint consumer as applying to 
all of the associated joint consumers; or
    (ii) Permit each joint consumer to opt out separately.
    (3) If you permit each joint consumer to opt out separately, you 
must permit one of the joint consumers to opt out on behalf of all of 
the joint consumers.
    (4) You may not require all joint consumers to opt out before you 
implement any opt out direction.
    (5) Example. If John and Mary have a joint checking account with 
you and arrange for you to send statements to John's address, you may 
do any of the following, but you must explain in your opt out notice 
which opt out policy you will follow:
    (i) Send a single opt out notice to John's address, but you must 
accept an opt out direction from either John or Mary.
    (ii) Treat an opt out direction by either John or Mary as applying 
to the entire account. If you do so, and John opts out, you may not 
require Mary to opt out as well before implementing John's opt out 
direction.
    (iii) Permit John and Mary to make different opt out directions. If 
you do so:
    (A) You must permit John and Mary to opt out for each other;
    (B) If both opt out, you must permit both to notify you in a single 
response (such as on a form or through a telephone call); and
    (C) If John opts out and Mary does not, you may only disclose 
nonpublic personal information about Mary, but not about John and not 
about John and Mary jointly.
    (e) Joint relationships in the case of credit unions. (1) If two or 
more consumers jointly obtain a financial product or service, other 
than a loan, from a credit union, the credit union may provide only a 
single opt out notice. The opt out notice must explain how the credit 
union will treat an opt out direction by a joint consumer (as explained 
in the examples in paragraph (e)(5) of this section).
    (2) Any of the joint consumers may exercise the right to opt out. A 
credit union may either:
    (i) Treat an opt out direction by a joint consumer to apply to all 
of the associated joint consumers; or
    (ii) Permit each joint consumer to opt out separately.
    (3) If a credit union permits each joint consumer to opt out 
separately, the credit union must permit one of the joint consumers to 
opt out on behalf of all of the joint consumers.
    (4) A credit union may not require all joint consumers to opt out 
before the credit union implements any opt out direction.
    (5) Example. If John and Mary have a joint share account with a 
credit union and arrange for the credit union to send statements to 
John's address, the credit union may do any of the following, but it 
must explain in its opt out notice which opt out policy it will follow:
    (i) Send a single opt out notice to John's address, but it must 
accept an opt out direction from either John or Mary.
    (ii) Treat an opt out direction by either John or Mary as applying 
to the entire account. If it does so, and John opts out, it may not 
require Mary to opt out as well before implementing John's opt out 
direction.
    (iii) Permit John and Mary to make different opt out directions. If 
it does so, and if John and Mary both opt out, it must permit one or 
both of them to notify it in a single response (such as on a form or 
through a telephone call).
    (6) Special rule for loans. (i) A credit union is required to 
provide an initial opt out notice to a borrower or guarantor on a loan 
if it shares his or her nonpublic personal information with 
nonaffiliated third parties other than for purposes under Sec. Sec.  
1016.13, 1016.14, and 1016.15.
    (ii) A credit union may satisfy its annual opt out notice 
requirement by providing one notice to those borrowers and guarantors 
jointly.
    (f) Joint relationships in the case of covered entities subject to 
FTC enforcement jurisdiction. For purposes of this paragraph (f), 
``you'' is limited to the financial institutions described in Sec.  
1016.3(l)(3).
    (1) If two or more consumers jointly obtain a financial product or 
service from you, you may provide a single opt out notice, unless one 
or more of those consumers requests a separate opt out notice. Your opt 
out notice must explain how you will treat an opt out direction by a 
joint consumer (as explained in paragraph (f)(5) of this section).
    (2) Any of the joint consumers may exercise the right to opt out. 
You may either:
    (i) Treat an opt out direction by a joint consumer as applying to 
all of the associated joint consumers; or
    (ii) Permit each joint consumer to opt out separately.
    (3) If you permit each joint consumer to opt out separately, you 
must permit one of the joint consumers to opt out on behalf of all of 
the joint consumers.
    (4) You may not require all joint consumers to opt out before you 
implement any opt out direction.
    (5) Example. If John and Mary have a joint credit card account with 
you and arrange for you to send statements to John's address, you may 
do any of the following, but you must explain in your opt out notice 
which opt out policy you will follow:
    (i) Send a single opt out notice to John's address, but you must 
accept an opt out direction from either John or Mary.
    (ii) Treat an opt out direction by either John or Mary as applying 
to the entire account. If you do so, and John opts out, you may not 
require Mary to opt out as well before implementing John's opt out 
direction.
    (iii) Permit John and Mary to make different opt out directions. If 
you do so:
    (A) You must permit John and Mary to opt out for each other;
    (B) If both opt out, you must permit both to notify you in a single 
response (such as on a form or through a telephone call); and
    (C) If John opts out and Mary does not, you may only disclose 
nonpublic personal information about Mary, but not about John and not 
about John and Mary jointly.
    (g) Time to comply with opt out. You must comply with a consumer's 
opt out direction as soon as reasonably practicable after you receive 
it.
    (h) Continuing right to opt out. A consumer may exercise the right 
to opt out at any time.
    (i) Duration of consumer's opt out direction. (1) A consumer's 
direction to opt out under this section is effective until the consumer 
revokes it in writing or, if the consumer agrees, electronically.
    (2) When a customer relationship terminates, the customer's opt out 
direction continues to apply to the nonpublic personal information that 
you collected during or related to that relationship. If the individual 
subsequently establishes a new customer relationship with you, the opt 
out direction that applied to the former relationship does not apply to 
the new relationship.
    (j) Delivery. When you are required to deliver an opt out notice by 
this section, you must deliver it according to Sec.  1016.9 of this 
part.
    (k) Model privacy form. Pursuant to Sec.  1016.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in the appendix to this part.


Sec.  1016.8  Revised privacy notices.

    (a) General rule. Except as otherwise authorized in this part, you 
must not, directly or through any affiliate, disclose any nonpublic 
personal information about a consumer to a nonaffiliated third party 
other than as described in the initial notice that you provided to that 
consumer under Sec.  1016.4 of this part, unless:

[[Page 79038]]

    (1) You have provided to the consumer a clear and conspicuous 
revised notice that accurately describes your policies and practices;
    (2) You have provided to the consumer a new opt out notice;
    (3) You have given the consumer a reasonable opportunity, before 
you disclose the information to the nonaffiliated third party, to opt 
out of the disclosure; and
    (4) The consumer does not opt out.
    (b) Examples. (1) Except as otherwise permitted by Sec. Sec.  
1016.13, 1016.14, and 1016.15 of this part, you must provide a revised 
notice before you:
    (i) Disclose a new category of nonpublic personal information to 
any nonaffiliated third party;
    (ii) Disclose nonpublic personal information to a new category of 
nonaffiliated third party; or
    (iii) Disclose nonpublic personal information about a former 
customer to a nonaffiliated third party, if that former customer has 
not had the opportunity to exercise an opt out right regarding that 
disclosure.
    (2) A revised notice is not required if you disclose nonpublic 
personal information to a new nonaffiliated third party that you 
adequately described in your prior notice.
    (c) Delivery. When you are required to deliver a revised privacy 
notice by this section, you must deliver it according to Sec.  1016.9 
of this part.


Sec.  1016.9  Delivering privacy and opt out notices.

    (a) How to provide notices. You must provide any privacy notices 
and opt out notices, including short-form initial notices, that this 
part requires so that each consumer can reasonably be expected to 
receive actual notice in writing or, if the consumer agrees, 
electronically.
    (b)(1) Examples of reasonable expectation of actual notice. You may 
reasonably expect that a consumer will receive actual notice if you:
    (i) Hand-deliver a printed copy of the notice to the consumer;
    (ii) Mail a printed copy of the notice to the last known address of 
the consumer;
    (iii) For the consumer who conducts transactions electronically:
    (A) In the case of financial institutions other than those 
described in Sec.  1016.3(l)(3) of this part, post the notice on the 
electronic site and require the consumer to acknowledge receipt of the 
notice as a necessary step to obtaining a particular financial product 
or service; or
    (B) In the case of financial institutions described in Sec.  
1016.3(l)(3), clearly and conspicuously post the notice on the 
electronic site and require the consumer to acknowledge receipt of the 
notice as a necessary step to obtaining a particular financial product 
or service;
    (iv) For an isolated transaction with the consumer, such as an ATM 
transaction, post the notice on the ATM screen and require the consumer 
to acknowledge receipt of the notice as a necessary step to obtaining 
the particular financial product or service.
    (2) Examples of unreasonable expectation of actual notice. You may 
not, however, reasonably expect that a consumer will receive actual 
notice of your privacy policies and practices if you:
    (i) Only post a sign in your branch or office or generally publish 
advertisements of your privacy policies and practices; or
    (ii) Send the notice via electronic mail to a consumer who does not 
obtain a financial product or service from you electronically.
    (c) Annual notices only. You may reasonably expect that a customer 
will receive actual notice of your annual privacy notice if:
    (1) The customer uses your Web site to access financial products 
and services electronically and agrees to receive notices at the Web 
site, and you post your current privacy notice continuously in a clear 
and conspicuous manner on the Web site; or
    (2) The customer has requested that you refrain from sending any 
information regarding the customer relationship, and your current 
privacy notice remains available to the customer upon request.
    (d) Oral description of notice insufficient. You may not provide 
any notice required by this part solely by orally explaining the 
notice, either in person or over the telephone.
    (e) Retention or accessibility of notices for customers. (1) For 
customers only, you must provide the initial notice required by Sec.  
1016.4(a)(1), the annual notice required by Sec.  1016.5(a), and the 
revised notice required by Sec.  1016.8 so that the customer can retain 
them or obtain them later in writing or, if the customer agrees, 
electronically.
    (2) Examples of retention or accessibility. You provide a privacy 
notice to the customer so that the customer can retain it or obtain it 
later if you:
    (i) Hand-deliver a printed copy of the notice to the customer;
    (ii) Mail a printed copy of the notice to the last known address of 
the customer, or, in the case of credit unions, mail a printed copy of 
the notice to the last known address of the customer upon request of 
the customer; or
    (iii) Make your current privacy notice available on a Web site (or 
a link to another Web site) for the customer who obtains a financial 
product or service electronically and agrees to receive the notice at 
the Web site.
    (f) Joint notice with other financial institutions. You may provide 
a joint notice from you and one or more of your affiliates or other 
financial institutions, as identified in the notice, as long as the 
notice is accurate with respect to you and the other institutions.
    (g) Joint relationships in the case of financial institutions other 
than credit unions and covered entities subject to FTC enforcement 
jurisdiction. For purposes of this paragraph (g), ``you'' is limited to 
financial institutions other than credit unions and the financial 
institutions described in Sec.  1016.3(l)(3). If two or more consumers 
jointly obtain a financial product or service from you, you may satisfy 
the initial, annual, and revised notice requirements of Sec. Sec.  
1016.4(a), 1016.5(a), and 1016.8(a), respectively, by providing one 
notice to those consumers jointly.
    (h) Joint relationships in the case of covered entities subject to 
FTC enforcement jurisdiction. For purposes of this paragraph (h), 
``you'' is limited to the financial institutions described in Sec.  
1016.3(l)(3). If two or more consumers jointly obtain a financial 
product or service from you, you may satisfy the initial, annual, and 
revised notice requirements of Sec. Sec.  1016.4(a), 1016.5(a), and 
1016.8(a) by providing one notice to those consumers jointly, unless 
one or more of those consumers requests separate notices.
    (i) Joint relationships in the case of credit unions. (1) If two or 
more consumers jointly obtain a financial product or service, other 
than a loan, from a credit union, the credit union may satisfy the 
requirements of Sec.  1016.4(a) by providing one initial notice to 
those consumers jointly.
    (2) Special rule for loans in the case of credit unions. (i) A 
credit union is required to provide an initial notice to a borrower or 
guarantor on a loan if the credit union shares his or her nonpublic 
personal information with nonaffiliated third parties other than for 
purposes under Sec. Sec.  1016.13, 1016.14, and 1016.15.
    (ii) A credit union may satisfy the annual notice requirements of 
Sec.  1016.5 by providing one notice to those borrowers and guarantors 
jointly.

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Subpart B--Limits on Disclosures


Sec.  1016.10  Limits on disclosure of nonpublic personal information 
to nonaffiliated third parties.

    (a)(1) Conditions for disclosure. Except as otherwise authorized in 
this part, you may not, directly or through any affiliate, disclose any 
nonpublic personal information about a consumer to a nonaffiliated 
third party unless:
    (i) You have provided to the consumer an initial notice as required 
under Sec.  1016.4 of this part;
    (ii) You have provided to the consumer an opt out notice as 
required in Sec.  1016.7 of this part;
    (iii) You have given the consumer a reasonable opportunity, before 
you disclose the information to the nonaffiliated third party, to opt 
out of the disclosure; and
    (iv) The consumer does not opt out.
    (2) Opt out definition. Opt out means a direction by the consumer 
that you not disclose nonpublic personal information about that 
consumer to a nonaffiliated third party, other than as permitted by 
Sec. Sec.  1016.13, 1016.14, and 1016.15.
    (3) Examples of reasonable opportunity to opt out. You provide a 
consumer with a reasonable opportunity to opt out if:
    (i) By mail. You mail the notices required in paragraph (a)(1) of 
this section to the consumer and allow the consumer to opt out by 
mailing a form, calling a toll-free telephone number, or any other 
reasonable means within 30 days from the date you mailed the notices.
    (ii) By electronic means. A customer opens an online account with 
you and agrees to receive the notices required in paragraph (a)(1) of 
this section electronically, and you allow the customer to opt out by 
any reasonable means within 30 days after the date that the customer 
acknowledges receipt of the notices in conjunction with opening the 
account.
    (iii) Isolated transaction with consumer. For an isolated 
transaction, such as the purchase of a cashier's check by a consumer, 
you provide the consumer with a reasonable opportunity to opt out if 
you provide the notices required in paragraph (a)(1) of this section at 
the time of the transaction and request that the consumer decide, as a 
necessary part of the transaction, whether to opt out before completing 
the transaction.
    (b) Application of opt out to all consumers and all nonpublic 
personal information. (1) You must comply with this section, regardless 
of whether you and the consumer have established a customer 
relationship.
    (2) Unless you comply with this section, you may not, directly or 
through any affiliate, disclose any nonpublic personal information 
about a consumer that you have collected, regardless of whether you 
collected it before or after receiving the direction to opt out from 
the consumer.
    (c) Partial opt out. You may allow a consumer to select certain 
nonpublic personal information or certain nonaffiliated third parties 
with respect to which the consumer wishes to opt out.


Sec.  1016.11  Limits on redisclosure and reuse of information.

    (a)(1) Information you receive under an exception. If you receive 
nonpublic personal information from a nonaffiliated financial 
institution under an exception in Sec.  1016.14 or Sec.  1016.15 of 
this part, your disclosure and use of that information is limited as 
follows:
    (i) You may disclose the information to the affiliates of the 
financial institution from which you received the information;
    (ii) You may disclose the information to your affiliates, but your 
affiliates may, in turn, disclose and use the information only to the 
extent that you may disclose and use the information; and
    (iii) You may disclose and use the information pursuant to an 
exception in Sec.  1016.14 or Sec.  1016.15 in the ordinary course of 
business to carry out the activity covered by the exception under which 
you received the information.
    (2) Example. If you receive a customer list from a nonaffiliated 
financial institution in order to provide account processing services 
under the exception in Sec.  1016.14(a), you may disclose that 
information under any exception in Sec.  1016.14 or Sec.  1016.15 in 
the ordinary course of business in order to provide those services. For 
example, you could disclose the information in response to a properly 
authorized subpoena or, in the case of financial institutions other 
than those described in Sec.  1016.3(l)(3), to your attorneys, 
accountants, and auditors. You could not disclose that information to a 
third party for marketing purposes or use that information for your own 
marketing purposes.
    (b)(1) Information you receive outside of an exception. If you 
receive nonpublic personal information from a nonaffiliated financial 
institution other than under an exception in Sec.  1016.14 or Sec.  
1016.15 of this part, you may disclose the information only:
    (i) To the affiliates of the financial institution from which you 
received the information;
    (ii) To your affiliates, but your affiliates may, in turn, disclose 
the information only to the extent that you can disclose the 
information; and
    (iii) To any other person, if the disclosure would be lawful if 
made directly to that person by the financial institution from which 
you received the information.
    (2) Example. If you obtain a customer list from a nonaffiliated 
financial institution outside of the exceptions in Sec. Sec.  1016.14 
and 1016.15:
    (i) You may use that list for your own purposes; and
    (ii) You may disclose that list to another nonaffiliated third 
party only if the financial institution from which you purchased the 
list could have lawfully disclosed the list to that third party. That 
is, you may disclose the list in accordance with the privacy policy of 
the financial institution from which you received the list, as limited 
by the opt out direction of each consumer whose nonpublic personal 
information you intend to disclose, and you may disclose the list in 
accordance with an exception in Sec.  1016.14 or Sec.  1016.15, such as 
to your attorneys or accountants.
    (c) Information you disclose under an exception. If you disclose 
nonpublic personal information to a nonaffiliated third party under an 
exception in Sec.  1016.14 or Sec.  1016.15 of this part, the third 
party may disclose and use that information only as follows:
    (1) The third party may disclose the information to your 
affiliates;
    (2) The third party may disclose the information to its affiliates, 
but its affiliates may, in turn, disclose and use the information only 
to the extent that the third party may disclose and use the 
information; and
    (3) The third party may disclose and use the information pursuant 
to an exception in Sec.  1016.14 or Sec.  1016.15 in the ordinary 
course of business to carry out the activity covered by the exception 
under which it received the information.
    (d) Information you disclose outside of an exception. If you 
disclose nonpublic personal information to a nonaffiliated third party 
other than under an exception in Sec.  1016.14 or Sec.  1016.15 of this 
part, the third party may disclose the information only:
    (1) To your affiliates;
    (2) To its affiliates, but its affiliates, in turn, may disclose 
the information only to the extent the third party can disclose the 
information; and
    (3) To any other person, if the disclosure would be lawful if you 
made it directly to that person.

[[Page 79040]]

Sec.  1016.12  Limits on sharing account number information for 
marketing purposes.

    (a) General prohibition on disclosure of account numbers. You must 
not, directly or through an affiliate, disclose, other than to a 
consumer reporting agency, an account number or similar form of access 
number or access code for a consumer's credit card account, deposit 
account, share account, or transaction account to any nonaffiliated 
third party for use in telemarketing, direct mail marketing, or other 
marketing through electronic mail to the consumer.
    (b) Exceptions. Paragraph (a) of this section does not apply if you 
disclose an account number or similar form of access number or access 
code:
    (1) To your agent or service provider solely in order to perform 
marketing for your own products or services, as long as the agent or 
service provider is not authorized to directly initiate charges to the 
account; or
    (2) To a participant in a private label credit card program or an 
affinity or similar program where the participants in the program are 
identified to the customer when the customer enters into the program.
    (c) Examples. (1) Account number. An account number, or similar 
form of access number or access code, does not include a number or code 
in an encrypted form, as long as you do not provide the recipient with 
a means to decode the number or code.
    (2) Transaction account. A transaction account is an account other 
than a deposit account, a share account, or a credit card account. A 
transaction account does not include an account to which third parties 
cannot initiate charges.

Subpart C--Exceptions


Sec.  1016.13  Exception to opt out requirements for service providers 
and joint marketing.

    (a) General rule. (1) The opt out requirements in Sec. Sec.  1016.7 
and 1016.10 of this part do not apply when you provide nonpublic 
personal information to a nonaffiliated third party to perform services 
for you or functions on your behalf, if you:
    (i) Provide the initial notice in accordance with Sec.  1016.4; and
    (ii) Enter into a contractual agreement with the third party that 
prohibits the third party from disclosing or using the information 
other than to carry out the purposes for which you disclosed the 
information, including use under an exception in Sec.  1016.14 or Sec.  
1016.15 in the ordinary course of business to carry out those purposes.
    (2) Example. If you disclose nonpublic personal information under 
this section to a financial institution with which you perform joint 
marketing, your contractual agreement with that institution meets the 
requirements of paragraph (a)(1)(ii) of this section if it prohibits 
the institution from disclosing or using the nonpublic personal 
information except as necessary to carry out the joint marketing or 
under an exception in Sec.  1016.14 or Sec.  1016.15 in the ordinary 
course of business to carry out that joint marketing.
    (b) Service may include joint marketing. The services a 
nonaffiliated third party performs for you under paragraph (a) of this 
section may include marketing of your own products or services or 
marketing of financial products or services offered pursuant to joint 
agreements between you and one or more financial institutions.
    (c) Definition of joint agreement. For purposes of this section, 
joint agreement means a written contract pursuant to which you and one 
or more financial institutions jointly offer, endorse, or sponsor a 
financial product or service.


Sec.  1016.14  Exceptions to notice and opt out requirements for 
processing and servicing transactions.

    (a) Exceptions for processing transactions at consumer's request. 
The requirements for initial notice in Sec.  1016.4(a)(2), for the opt 
out in Sec. Sec.  1016.7 and 1016.10, and for service providers and 
joint marketing in Sec.  1016.13 do not apply if you disclose nonpublic 
personal information as necessary to effect, administer, or enforce a 
transaction that a consumer requests or authorizes, or in connection 
with:
    (1) Servicing or processing a financial product or service that a 
consumer requests or authorizes;
    (2) Maintaining or servicing the consumer's account with you, or 
with another entity as part of a private label credit card program or 
other extension of credit on behalf of such entity; or
    (3) A proposed or actual securitization, secondary market sale 
(including sales of servicing rights), or similar transaction related 
to a transaction of the consumer.
    (b) Necessary to effect, administer, or enforce a transaction means 
that the disclosure is:
    (1) Required, or is one of the lawful or appropriate methods, to 
enforce your rights or the rights of other persons engaged in carrying 
out the financial transaction or providing the product or service; or
    (2) Required, or is a usual, appropriate or acceptable method:
    (i) To carry out the transaction or the product or service business 
of which the transaction is a part, and record, service, or maintain 
the consumer's account in the ordinary course of providing the 
financial service or financial product;
    (ii) To administer or service benefits or claims relating to the 
transaction or the product or service business of which it is a part;
    (iii) To provide a confirmation, statement, or other record of the 
transaction, or information on the status or value of the financial 
service or financial product to the consumer or the consumer's agent or 
broker;
    (iv) To accrue or recognize incentives or bonuses associated with 
the transaction that are provided by you or any other party;
    (v) To underwrite insurance at the consumer's request or for 
reinsurance purposes, or for any of the following purposes as they 
relate to a consumer's insurance: account administration, reporting, 
investigating, or preventing fraud or material misrepresentation, 
processing premium payments, processing insurance claims, administering 
insurance benefits (including utilization review activities), 
participating in research projects, or as otherwise required or 
specifically permitted by Federal or state law; or
    (vi) In connection with:
    (A) The authorization, settlement, billing, processing, clearing, 
transferring, reconciling or collection of amounts charged, debited, or 
otherwise paid using a debit, credit, or other payment card, check, or 
account number, or by other payment means;
    (B) The transfer of receivables, accounts, or interests therein; or
    (C) The audit of debit, credit, or other payment information.


Sec.  1016.15  Other exceptions to notice and opt out requirements.

    (a) Exceptions to opt out requirements. The requirements for 
initial notice in Sec.  1016.4(a)(2), for the opt out in Sec. Sec.  
1016.7 and 1016.10, and for service providers and joint marketing in 
Sec.  1016.13 do not apply when you disclose nonpublic personal 
information:
    (1) With the consent or at the direction of the consumer, provided 
that the consumer has not revoked the consent or direction;
    (2)(i) To protect the confidentiality or security of your records 
pertaining to the consumer, service, product, or transaction;
    (ii) To protect against or prevent actual or potential fraud, 
unauthorized transactions, claims, or other liability;

[[Page 79041]]

    (iii) For required institutional risk control or for resolving 
consumer disputes or inquiries;
    (iv) To persons holding a legal or beneficial interest relating to 
the consumer; or
    (v) To persons acting in a fiduciary or representative capacity on 
behalf of the consumer;
    (3) To provide information to insurance rate advisory 
organizations, guaranty funds or agencies, agencies that are rating 
you, persons that are assessing your compliance with industry 
standards, and your attorneys, accountants, and auditors;
    (4) To the extent specifically permitted or required under other 
provisions of law and in accordance with the Right to Financial Privacy 
Act of 1978 (12 U.S.C. 3401 et seq.), to law enforcement agencies 
(including the Bureau, a Federal functional regulator, the Secretary of 
the Treasury, with respect to 31 U.S.C. Chapter 53, Subchapter II 
(Records and Reports on Monetary Instruments and Transactions) and 12 
U.S.C. Chapter 21 (Financial Recordkeeping), a state insurance 
authority, with respect to any person domiciled in that insurance 
authority's state that is engaged in providing insurance, and the 
Federal Trade Commission), self-regulatory organizations, or for an 
investigation on a matter related to public safety;
    (5)(i) To a consumer reporting agency in accordance with the Fair 
Credit Reporting Act (15 U.S.C. 1681 et seq.); or
    (ii) From a consumer report reported by a consumer reporting 
agency;
    (6) In connection with a proposed or actual sale, merger, transfer, 
or exchange of all or a portion of a business or operating unit if the 
disclosure of nonpublic personal information concerns solely consumers 
of such business or unit; or
    (7)(i) To comply with Federal, state, or local laws, rules and 
other applicable legal requirements;
    (ii) To comply with a properly authorized civil, criminal, or 
regulatory investigation, or subpoena or summons by Federal, state, or 
local authorities; or
    (iii) To respond to judicial process or government regulatory 
authorities having jurisdiction over you for examination, compliance, 
or other purposes as authorized by law.
    (b) Examples of consent and revocation of consent. (1) A consumer 
may specifically consent to your disclosure to a nonaffiliated 
insurance company of the fact that the consumer has applied to you for 
a mortgage so that the insurance company can offer homeowner's 
insurance to the consumer.
    (2) A consumer may revoke consent by subsequently exercising the 
right to opt out of future disclosures of nonpublic personal 
information as permitted under Sec.  1016.7(h) of this part.

Subpart D--Relation to Other Laws


Sec.  1016.16  Protection of Fair Credit Reporting Act.

    Nothing in this part shall be construed to modify, limit, or 
supersede the operation of the Fair Credit Reporting Act (15 U.S.C. 
1681 et seq.), and no inference shall be drawn on the basis of the 
provisions of this part regarding whether information is transaction or 
experience information under section 603 of that Act.


Sec.  1016.17  Relation to state laws.

    (a) In general. This part shall not be construed as superseding, 
altering, or affecting any statute, regulation, order, or 
interpretation in effect in any state, except to the extent that such 
state statute, regulation, order, or interpretation is inconsistent 
with the provisions of this part, and then only to the extent of the 
inconsistency.
    (b) Greater protection under state law. For purposes of this 
section, a state statute, regulation, order, or interpretation is not 
inconsistent with the provisions of this part if the protection such 
statute, regulation, order, or interpretation affords any consumer is 
greater than the protection provided under this part, as determined by 
the Bureau, on its own motion or upon the petition of any interested 
party, after consultation with the agency or authority with 
jurisdiction under section 505(a) of the GLB Act (15 U.S.C. 6805(a)) 
over either the person that initiated the complaint or that is the 
subject of the complaint.

Appendix to Part 1016--Model Privacy Form

A. The Model Privacy Form

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B. General Instructions

1. How the Model Privacy Form Is Used

    (a) The model form may be used, at the option of a financial 
institution, including a group of financial institutions that use a 
common privacy notice, to meet the content requirements of the 
privacy notice and opt-out notice set forth in Sec. Sec.  1016.6 and 
1016.7 of this part.
    (b) The model form is a standardized form, including page 
layout, content, format, style, pagination, and shading. 
Institutions seeking to obtain the safe harbor through use of the 
model form may modify it only as described in these Instructions.
    (c) Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.
    (d) The word ``customer'' may be replaced by the word ``member'' 
whenever it appears in the model form, as appropriate.

2. The Contents of the Model Privacy Form

    The model form consists of two pages, which may be printed on 
both sides of a single sheet of paper, or may appear on two separate 
pages. Where an institution provides a long list of institutions at 
the end of the model form in accordance with Instruction C.3(a)(1), 
or provides additional information in accordance with Instruction 
C.3(c), and such list or additional information exceeds the space 
available on page two of the model form, such list or additional 
information may extend to a third page.
    (a) Page One. The first page consists of the following 
components:
    (1) Date last revised (upper right-hand corner).
    (2) Title.
    (3) Key frame (Why?, What?, How?).
    (4) Disclosure table (``Reasons we can share your personal 
information'').
    (5) ``To limit our sharing'' box, as needed, for the financial 
institution's opt-out information.
    (6) ``Questions'' box, for customer service contact information.
    (7) Mail-in opt-out form, as needed.
    (b) Page Two. The second page consists of the following 
components:
    (1) Heading (Page 2).
    (2) Frequently Asked Questions (``Who we are'' and ``What we 
do'').
    (3) Definitions.
    (4) ``Other important information'' box, as needed.

3. The Format of the Model Privacy Form

    The format of the model form may be modified only as described 
below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. While a number 
of factors together produce easily readable type font, institutions 
are required to use a minimum of 10-point font (unless otherwise 
expressly permitted in these Instructions) and sufficient spacing 
between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on paper in portrait orientation, the size of which must 
be sufficient to meet the layout and minimum font size requirements, 
with sufficient white space on the top, bottom, and sides of the 
content.
    (d) Color. The model form must be printed on white or light 
color paper (such as cream) with black or other contrasting ink 
color. Spot color may be used to achieve visual interest, so long as 
the color contrast is distinctive and the color does not detract 
from the readability of the model form. Logos may also be printed in 
color.
    (e) Languages. The model form may be translated into languages 
other than English.

C. Information Required in the Model Privacy Form

    The information in the model form may be modified only as 
described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Insert the name of the financial institution providing the 
notice or a common identity of affiliated institutions jointly 
providing the notice on the form wherever [name of financial 
institution] appears.

2. Page One

    (a) Last revised date. The financial institution must insert in 
the upper right-hand corner the date on which the notice was last 
revised. The information shall appear in minimum 8-point font as 
``rev. [month/year]'' using either the name or number of the month, 
such as ``rev. July 2009'' or ``rev. 7/09''.
    (b) General instructions for the ``What?'' box.
    (1) The bulleted list identifies the types of personal 
information that the institution collects and shares. All 
institutions must use the term ``Social Security number'' in the 
first bullet.
    (2) Institutions must use five (5) of the following terms to 
complete the bulleted list: Income; account balances; payment 
history; transaction history; transaction or loss history; credit 
history; credit scores; assets; investment experience; credit-based 
insurance scores; insurance claim history; medical information; 
overdraft history; purchase history; account transactions; risk 
tolerance; medical-related debts; credit card or other debt; 
mortgage rates and payments; retirement assets; checking account

[[Page 79049]]

information; employment information; wire transfer instructions.
    (c) General instructions for the disclosure table. The left 
column lists reasons for sharing or using personal information. Each 
reason correlates to a specific legal provision described in 
paragraph C.2(d) of this Instruction. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response that 
accurately reflects its information sharing policies and practices 
with respect to the reason listed on the left. In the right column, 
each institution must provide in each box one of the following three 
(3) responses, as applicable, that reflects whether a consumer can 
limit such sharing: ``Yes'' if it is required to or voluntarily 
provides an opt-out; ``No'' if it does not provide an opt-out; or 
``We don't share'' if it answers ``No'' in the middle column. Only 
the sixth row (``For our affiliates to market to you'') may be 
omitted at the option of the institution. See paragraph C.2(d)(6) of 
this Instruction.
    (d) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. This reason incorporates 
sharing information under Sec. Sec.  1016.14 and 1016.15 and with 
service providers pursuant to Sec.  1016.13 of this part other than 
the purposes specified in paragraphs C.2(d)(2) or C.2(d)(3) of these 
Instructions.
    (2) For our marketing purposes. This reason incorporates sharing 
information with service providers by an institution for its own 
marketing pursuant to Sec.  1016.13 of this part. An institution 
that shares for this reason may choose to provide an opt-out.
    (3) For joint marketing with other financial companies. This 
reason incorporates sharing information under joint marketing 
agreements between two or more financial institutions and with any 
service provider used in connection with such agreements pursuant to 
Sec.  1016.13 of this part. An institution that shares for this 
reason may choose to provide an opt-out.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This reason incorporates sharing 
information specified in sections 603(d)(2)(A)(i) and (ii) of the 
FCRA. An institution that shares for this reason may choose to 
provide an opt-out.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This reason incorporates sharing information 
pursuant to section 603(d)(2)(A)(iii) of the FCRA. An institution 
that shares for this reason must provide an opt-out.
    (6) For our affiliates to market to you. This reason 
incorporates sharing information specified in section 624 of the 
FCRA. This reason may be omitted from the disclosure table when: the 
institution does not have affiliates (or does not disclose personal 
information to its affiliates); the institution's affiliates do not 
use personal information in a manner that requires an opt-out; or 
the institution provides the affiliate marketing notice separately. 
Institutions that include this reason must provide an opt-out of 
indefinite duration. An institution that is required to provide an 
affiliate marketing opt-out, but does not include that opt-out in 
the model form under this part, must comply with section 624 of the 
FCRA and 12 CFR part 1022, subpart C, with respect to the initial 
notice and opt-out and any subsequent renewal notice and opt-out. An 
institution not required to provide an opt-out under this 
subparagraph may elect to include this reason in the model form.
    (7) For nonaffiliates to market to you. This reason incorporates 
sharing described in Sec. Sec.  1016.7 and 1016.10(a) of this part. 
An institution that shares personal information for this reason must 
provide an opt-out.
    (e) To limit our sharing: A financial institution must include 
this section of the model form only if it provides an opt-out. The 
word ``choice'' may be written in either the singular or plural, as 
appropriate. Institutions must select one or more of the applicable 
opt-out methods described: Telephone, such as by a toll-free number; 
a Web site; or use of a mail-in opt-out form. Institutions may 
include the words ``toll-free'' before telephone, as appropriate. An 
institution that allows consumers to opt out online must provide 
either a specific Web address that takes consumers directly to the 
opt-out page or a general Web address that provides a clear and 
conspicuous direct link to the opt-out page. The opt-out choices 
made available to the consumer who contacts the institution through 
these methods must correspond accurately to the ``Yes'' responses in 
the third column of the disclosure table. In the part titled 
``Please note,'' institutions may insert a number that is 30 or 
greater in the space marked ``[30].'' Instructions on voluntary or 
state privacy law opt-out information are in paragraph C.2(g)(5) of 
these Instructions.
    (f) Questions box. Customer service contact information must be 
inserted as appropriate, where [phone number] or [Web site] appear. 
Institutions may elect to provide either a phone number, such as a 
toll-free number, or a web address, or both. Institutions may 
include the words ``toll-free'' before the telephone number, as 
appropriate.
    (g) Mail-in opt-out form. Financial institutions must include 
this mail-in form only if they state in the ``To limit our sharing'' 
box that consumers can opt out by mail. The mail-in form must 
provide opt-out options that correspond accurately to the ``Yes'' 
responses in the third column in the disclosure table. Institutions 
that require customers to provide only name and address may omit the 
section identified as ``[account ].'' Institutions that 
require additional or different information, such as a random opt-
out number or a truncated account number, to implement an opt-out 
election should modify the ``[account ]'' reference 
accordingly. This includes institutions that require customers with 
multiple accounts to identify each account to which the opt-out 
should apply. An institution must enter its opt-out mailing address: 
in the far right of this form (see version 3); or below the form 
(see version 4). The reverse side of the mail-in opt-out form must 
not include any content of the model form.
    (1) Joint accountholder. Only institutions that provide their 
joint accountholders the choice to opt out for only one 
accountholder, in accordance with paragraph C.3(a)(5) of these 
Instructions, must include in the far left column of the mail-in 
form the following statement: ``If you have a joint account, your 
choice(s) will apply to everyone on your account unless you mark 
below. [ballot] Apply my choice(s) only to me.'' The word ``choice'' 
may be written in either the singular or plural, as appropriate. 
Financial institutions that provide insurance products or services, 
provide this option, and elect to use the model form may substitute 
the word ``policy'' for ``account'' in this statement. Institutions 
that do not provide this option may eliminate this left column from 
the mail-in form.
    (2) FCRA section 603(d)(2)(A)(iii) opt-out. If the institution 
shares personal information pursuant to section 603(d)(2)(A)(iii) of 
the FCRA, it must include in the mail-in opt-out form the following 
statement: ``[ballot] Do not share information about my 
creditworthiness with your affiliates for their everyday business 
purposes.''
    (3) FCRA section 624 opt-out. If the institution incorporates 
section 624 of the FCRA in accord with paragraph C.2(d)(6) of these 
Instructions, it must include in the mail-in opt-out form the 
following statement: ``[ballot] Do not allow your affiliates to use 
my personal information to market to me.''
    (4) Nonaffiliate opt-out. If the financial institution shares 
personal information pursuant to Sec.  1016.10(a) of this part, it 
must include in the mail-in opt-out form the following statement: 
``[ballot] Do not share my personal information with nonaffiliates 
to market their products and services to me.''
    (5) Additional opt-outs. Financial institutions that use the 
disclosure table to provide opt-out options beyond those required by 
Federal law must provide those opt-outs in this section of the model 
form. A financial institution that chooses to offer an opt-out for 
its own marketing in the mail-in opt-out form must include one of 
the two following statements: ``[ballot] Do not share my personal 
information to market to me.'' or ``[ballot] Do not use my personal 
information to market to me.'' A financial institution that chooses 
to offer an opt-out for joint marketing must include the following 
statement: ``[ballot] Do not share my personal information with 
other financial institutions to jointly market to me.''
    (h) Barcodes. A financial institution may elect to include a 
barcode and/or ``tagline'' (an internal identifier) in 6-point font 
at the bottom of page one, as needed for information internal to the 
institution, so long as these do not interfere with the clarity or 
text of the form.

3. Page Two

    (a) General Instructions for the Questions. Certain of the 
Questions may be customized as follows:
    (1) ``Who is providing this notice?'' This question may be 
omitted where only one financial institution provides the model form 
and that institution is clearly identified in the title on page one. 
Two or more financial institutions that jointly provide the model 
form must use this question to identify themselves as required by 
Sec.  1016.9(f) of this part. Where the list of institutions exceeds 
four (4) lines, the institution must describe in

[[Page 79050]]

the response to this question the general types of institutions 
jointly providing the notice and must separately identify those 
institutions, in minimum 8-point font, directly following the 
``Other important information'' box, or, if that box is not included 
in the institution's form, directly following the ``Definitions.'' 
The list may appear in a multi-column format.
    (2) ``How does [name of financial institution] protect my 
personal information?'' The financial institution may only provide 
additional information pertaining to its safeguards practices 
following the designated response to this question. Such information 
may include information about the institution's use of cookies or 
other measures it uses to safeguard personal information. 
Institutions are limited to a maximum of 30 additional words.
    (3) ``How does [name of financial institution] collect my 
personal information?'' Institutions must use five (5) of the 
following terms to complete the bulleted list for this question: 
Open an account; deposit money; pay your bills; apply for a loan; 
use your credit or debit card; seek financial or tax advice; apply 
for insurance; pay insurance premiums; file an insurance claim; seek 
advice about your investments; buy securities from us; sell 
securities to us; direct us to buy securities; direct us to sell 
your securities; make deposits or withdrawals from your account; 
enter into an investment advisory contract; give us your income 
information; provide employment information; give us your employment 
history; tell us about your investment or retirement portfolio; tell 
us about your investment or retirement earnings; apply for 
financing; apply for a lease; provide account information; give us 
your contact information; pay us by check; give us your wage 
statements; provide your mortgage information; make a wire transfer; 
tell us who receives the money; tell us where to send the money; 
show your government-issued ID; show your driver's license; order a 
commodity futures or option trade. Institutions that collect 
personal information from their affiliates and/or credit bureaus 
must include after the bulleted list the following statement: ``We 
also collect your personal information from others, such as credit 
bureaus, affiliates, or other companies.'' Institutions that do not 
collect personal information from their affiliates or credit bureaus 
but do collect information from other companies must include the 
following statement instead: ``We also collect your personal 
information from other companies.'' Only institutions that do not 
collect any personal information from affiliates, credit bureaus, or 
other companies can omit both statements.
    (4) ``Why can't I limit all sharing?'' Institutions that 
describe state privacy law provisions in the ``Other important 
information'' box must use the bracketed sentence: ``See below for 
more on your rights under state law.'' Other institutions must omit 
this sentence.
    (5) ``What happens when I limit sharing for an account I hold 
jointly with someone else?'' Only financial institutions that 
provide opt-out options must use this question. Other institutions 
must omit this question. Institutions must choose one of the 
following two statements to respond to this question: ``Your choices 
will apply to everyone on your account.'' or ``Your choices will 
apply to everyone on your account--unless you tell us otherwise.'' 
Financial institutions that provide insurance products or services 
and elect to use the model form may substitute the word ``policy'' 
for ``account'' in these statements.
    (b) General Instructions for the Definitions. The financial 
institution must customize the space below the responses to the 
three definitions in this section. This specific information must be 
in italicized lettering to set off the information from the 
standardized definitions.
    (1) Affiliates. As required by Sec.  1016.6(a)(3) of this part, 
where [affiliate information] appears, the financial institution 
must:
    (i) If it has no affiliates, state: ``[name of financial 
institution] has no affiliates'';
    (ii) If it has affiliates but does not share personal 
information, state: ``[name of financial institution] does not share 
with our affiliates''; or
    (iii) If it shares with its affiliates, state, as applicable: 
``Our affiliates include companies with a [common corporate identity 
of financial institution] name; financial companies such as [insert 
illustrative list of companies]; nonfinancial companies, such as 
[insert illustrative list of companies]; and others, such as [insert 
illustrative list].''
    (2) Nonaffiliates. As required by Sec.  1016.6(c)(3) of this 
part, where [nonaffiliate information] appears, the financial 
institution must:
    (i) If it does not share with nonaffiliated third parties, 
state: ``[name of financial institution] does not share with 
nonaffiliates so they can market to you''; or
    (ii) If it shares with nonaffiliated third parties, state, as 
applicable: ``Nonaffiliates we share with can include [list 
categories of companies such as mortgage companies, insurance 
companies, direct marketing companies, and nonprofit 
organizations].''
    (3) Joint Marketing. As required by Sec.  1016.13 of this part, 
where [joint marketing] appears, the financial institution must:
    (i) If it does not engage in joint marketing, state: ``[name of 
financial institution] doesn't jointly market''; or
    (ii) If it shares personal information for joint marketing, 
state, as applicable: ``Our joint marketing partners include [list 
categories of companies such as credit card companies].''
    (c) General instructions for the ``Other important information'' 
box. This box is optional. The space provided for information in 
this box is not limited. Only the following types of information can 
appear in this box.
    (1) State and/or international privacy law information; and/or
    (2) Acknowledgment of receipt form.

    Dated: October 24, 2011.
Alastair M. Fitzpayne,
Deputy Chief of Staff and Executive Secretary, Department of the 
Treasury.

[FR Doc. 2011-31729 Filed 12-20-11; 8:45 am]
BILLING CODE 4810-AM-P