WASHINGTON - The Federal Deposit Insurance Corp. on Monday proposed requiring financial institutions that share certain consumer information with an affiliate to send "opt-out" forms to customers.
Rather than creating a new requirement, the FDIC is clarifying provisions of the Fair Credit Reporting Act, which requires banks to give customers the chance to opt-out.
"Transaction and experience information," which a bank collects on a customer, is not included in these opt-out provisions. The agency's rule did not define what those terms applied to.
The proposal would require the form to detail what information is being released, what kind of companies will have access to it, a description of the customer's right to refuse to share the information, and how a consumer may choose to opt out. Institutions would have the option not to issue the forms, but would then be considered a consumer reporting agency and would be subject to other regulations.
The Gramm-Leach-Bliley Act required banking and thrift regulators to issue rules clarifying the provisions of the fair credit reporting legislation, but did not set a deadline. The other regulatory agencies are expected to approve the release of the proposal by the end of this week. Comments will be due 45 days after it is published in the Federal Register.