Zip your lenders' lips with opt-out notices
Page | 1 | 2 | 3 |

"It's true that some notices were more complicated than they needed to be, in part because a model notice created by legislators was less than clear," says John Byrne, attorney and compliance manager for the American Bankers Association. Nevertheless, Byrne hopes that Congress holds off on making any changes and gives the industry time to figure out what works.

"We want to see if there's anything we can do before regulators officially do something. In our preliminary meetings there wasn't a consensus on how to do that. Should there be a short notice with a longer notice behind that saying, 'If you want to know more, click here?'"

"You can't simplify everything. Everybody in society seems to want bullet points for life, and it doesn't work that way. Does a short notice written at fifth or sixth grade level serve us, or do we need a hybrid approach? No one has come up with the best way to approach this."

States taking stricter action
Banks and legislators are keeping an eye on states that are enacting privacy laws that are stricter than the federal standards.

New Mexico has "opt-in" rules for the sharing of information with unaffiliated third parties or with companies that have a joint marketing arrangement. Opt-in means customers don't have to do anything if they don't want their information shared with those groups. If they do want their information shared, they'd have to let the company know.

Vermont also has an opt-in standard for the sharing of information with unaffiliated third parties.

But California, if legislative proposals become law, would have the strictest privacy policy in the nation. It would allow customers to opt out of the sharing with affiliated companies -- something no other state allows. The sharing of information with joint marketing companies and unaffiliated third parties would be on an opt-in basis.

Property debate is going strong
Financial information privacy is important to American consumers. That's been shown in many polls, says Tena Friery.

"Many people feel they have a zone of privacy . . . if they give information to the bank, that information should be used for their car loan or mortgage or credit card. They feel that the information is theirs.

"The property issue is a real debate. Who does this information belong to -- the consumer or the institution -- once the consumer hands it over? Most consumers feel they have more rights than they actually have. People have a level of confidence about their personal information that really doesn't exist any more."

If financial privacy is a concern, be sure to review all the material that's sent to you from banks, brokerages, insurance companies and the like. If you have any questions about a privacy notice, call the institution.

Dani Arthur contributed to this story.