CUNA Advises Against Privacy Notice Changes, but Other EGRPRA Items Could Use Some Tinkering

WASHINGTON-In its official comment letter to NCUA, CUNA wrote that changes to the privacy notices are unnecessary at this time, but other items currently being reviewed under the Economic Growth and Regulatory Paperwork Reduction Act could be improved upon. CUNA Assistant General Counsel Jeffrey Bloch did say that if the privacy notices rules were changed, they should simplify them for financial institutions and consumers. Specifically, he recommended that a notice only be sent if the institution is required to offer the consumer an opt-out. The Fair and Accurate Credit Transactions Act regulations that will be coming out throughout the year should be kept in mind if any changes are made. One thing CUNA asked to be updated was the definition of an "electronic address" under Regulation DD (Truth in Savings) for greater flexibility for home banking programs and other Intranet Web sites. "We believe the interim final rules and the current narrow definition of "electronic address" will be burdensome for credit unions that had intended to or would consider using home banking programs or other Intranet systems to communicate with consumers and would prevent members from receiving the benefits of these technologies," Bloch wrote. "This definition would also contradict both the language and intent of the E-Sign Act." He also reasoned, "These electronic disclosure rules also require that a consumer must provide consent, or confirmation of consent, electronically and in a manner that "reasonably demonstrates" that he or she can access the disclosure information." Additionally, he said more guidance is needed regarding the term "reasonably demonstrates." Bloch also suggested that NCUA include examples in its official staff commentary following the rules, similar to the Federal Reserve, which would provide the opportunity for public comment. He wrote that the commentary should include staff interpretations in lieu of NCUA's private opinion letters to eliminate confusion for those who are not familiar with the letters. EGRPRA requires the federal financial institutions regulators to review their regulations every 10 years. This process will take through 2006. However, NCUA on its own has taken to reviewing one-third of its regulations every year. -scooke@cutimes.com