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House OKs fewer privacy notices

By Marcie Geffner · Bankrate.com
Monday, December 17, 2012
Posted: 3 pm ET

The U.S. House of Representatives has passed a bill that could reduce the number of annual privacy policy disclosure notices consumers receive from banks, credit unions and other financial services companies.

The Eliminate Privacy Notice Confusion Act would allow financial companies to skip these annual reminders if they haven't made any changes to their privacy practices during the past year.

The bill's sponsor, Rep. Blaine Leutkemeyer, R-Mo., said in a statement that the bill would "eliminate unnecessary, costly, confusing and often ignored mailings that clog up people's mailboxes" and "make it more likely that people will pay closer attention to important mailings they receive from their financial institutions."

Rep. Edward Markey, D-Mass., an advocate for consumer privacy protection, spoke out against the bill during the debate in the House.

"People should get the information that their privacy could be compromised by these now huge megabanks. This bill is saying you don't have to notify people of that each year. You don't have to tell them. If you didn't figure that out when the bank first signed you up as a company, they never have to tell you again because they notified you once at the beginning," Markey said. "People don't understand the consequences."

Bank and credit union groups have supported the bill, saying it would eliminate an unnecessary regulatory burden for financial institutions.

The Senate has not yet considered the bill.

Currently, financial companies must send a privacy policy disclosure notice to customers every year, even if the policies haven't changed. These notices tell customers what kinds of information are collected, what types of affiliates might receive or purchase the information and how the confidentiality of the information is protected.

Financial companies can give their own customers' information to other companies that are their affiliates or have signed joint marketing agreements with them. Customers can't opt out of this practice but can restrict whether the company also can give their information to other nonaffiliated companies.

Do you find these mailings helpful or a burden? Would you like them to continue or stop?

Follow me on Twitter: @marciegeff

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