WASHINGTON - With federal privacy rules scheduled to take effect in about four months, the Federal Deposit Insurance Corp. has issued a handbook to educate industry officials on the new consumer protections.
The handbook summarizes the rules mandated by the Gramm-Leach-Bliley Act that are to take effect July 1 and recommends how to comply. For example, financial companies must give customers annual notices describing how their confidential data will be handled and must offer a chance to block sharing of this information with third parties.
In an accompanying letter to bankers, Stephen M. Cross, director of the FDIC's division of compliance and consumer affairs, stressed the importance of planning before the deadline.
"It is imperative that banks use this interim period to develop a privacy compliance strategy to achieve full compliance by July 1," he said.
The handbook recommends that banks establish a compliance timeline, and it offers tips on how to develop and deliver privacy notices, as well as advising that banks set up a system for answering customers' questions.
The handbook was recently mailed to all FDIC-supervised institutions, and a link to it is available online at www.americanbanker.com.
So far reaction from bankers has been positive, said Ken Baebel, assistant director of compliance policy at the FDIC. "They think it's going to be very helpful in training their employees as well as helping them get their procedures in compliance," he said.
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