WASHINGTON - Bank One Corp. is aiming to spend just $1 to prepare, send, and track each customer privacy notice required under the Gramm-Leach-Bliley Act, a senior vice president said Wednesday.
That still translates into at least $55 million, an estimate that makes the nation's fourth-largest bank holding company one of the first large institutions to reveal the cost of complying with new privacy requirements.
The financial reform law requires banks, insurers, and brokers, among other companies, to send customers annual notices disclosing privacy policies and giving them a chance to block the sharing of personal data with unaffiliated third parties.
"We will have to send 55 million notices to 55 million households that represent 75 million customers," Julia Johnson, Bank One's senior vice president and director of information policy and privacy, told the bipartisan Congressional Forum on Technology and Innovation.
The forum conducts briefings for congressional staff on the effects changes in technology and innovation have on policymaking.
Bank One legislative counsel Carter K. McDowell said the overall costs of sending notices could run into the tens of millions of dollars every year once the cost of infrastructure support is added."
The primary infrastructure costs are new computer systems to track customer data and responses to the notices, along with training Bank One's 85,000 employees to operate under the new privacy regulations.
"This is not just some compliance issue. It's an enormous customer-service challenge," Ms. Johnson said. "Privacy is values-driven. [Customers'] right to be left alone means we need to offer to our customers choices as to how we need to communicate with them."
Industry-wide compliance costs have been estimated at up to $1.25 billion to send some 2.5 billion disclosure statements, according to calculations cited by the American Bankers Association.