Financial Privacy Rule

Citation

Financial Privacy Rule (Subtitle A: Disclosure of Nonpublic Personal Information), codified at 15 U.S.C. §6801-09).

Overview

The "Financial Privacy Rule" requires financial institutions to provide each consumer with a privacy notice at the time the consumer relationship is established and annually thereafter. The privacy notice must explain the information collected about the consumer, where that information is shared, how that information is used, and how that information is protected. The notice must also identify the consumer's right to opt-out of the information being shared with unaffiliated parties per the Fair Credit Reporting Act.

Should the privacy policy change at any point in time, the consumer must be notified again for acceptance. Each time the privacy notice is reestablished, the consumer has the right to opt-out again. The unaffiliated parties receiving the nonpublic information are held to the acceptance terms of the consumer under the original relationship agreement.

In summary, the financial privacy rule provides for a privacy policy agreement between the company and the consumer pertaining to the protection of the consumer's personal nonpublic information.