Privacy of Consumer Financial Information (Regulation P)

SUMMARY: Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) transferred rulemaking authority for a number of consumer financial protection laws from seven Federal agencies to the Bureau of Consumer Financial Protection (Bureau) as of July 21, 2011, including most provisions of Subtitle A of Title V of the Gramm-Leach-Bliley Act (GLB Act), with respect to financial institutions described in section 504 of the GLB Act. The Bureau is in the process of republishing the regulations implementing those laws with technical and conforming changes to reflect the transfer of authority and certain other changes made by the Dodd-Frank Act. In light of the transfer of rulemaking authority for the privacy provisions of the GLB Act to the Bureau, the Bureau is publishing for public comment an interim final rule establishing a new Regulation P (Privacy of Consumer Financial Information). This interim final rule does not impose any new substantive obligations on regulated entities.

EFFECTIVE DATE: This interim final rule is effective December 30, 2011. Comments must be received on or before February 21, 2012.

ADDRESSES: You may submit comments, identified by Docket No. CFPB-2011-0028 or RIN 3170-AA06, by any of the following methods:

* Electronic: http://www.regulations.gov. Follow the instructions for submitting comments.

* Mail: Monica Jackson, Office of the Executive Secretary, Bureau of Consumer Financial Protection, 1500 Pennsylvania Avenue NW., (Attn: 1801 L Street), Washington, DC 20220.

* Hand Delivery/Courier in Lieu of Mail: Monica Jackson, Office of the Executive Secretary, Bureau of Consumer Financial Protection, 1700 G Street NW., Washington, DC 20006.

All submissions must include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. In general, all comments received will be posted without change to http://www.regulations.gov. In addition, comments will be available for public inspection and copying at 1700 G Street NW., Washington, DC 20006, on official business days between the hours of 10 a.m. and 5 p.m. Eastern Time. You can make an appointment to inspect the documents by telephoning (202) 435-7275.

All comments, including attachments and other supporting materials, will become part of the public record and subject to public disclosure. Sensitive personal information, such as account numbers or Social Security numbers, should not be included. Comments will not be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: Courtney Jean or Priscilla Walton-Fein, Office of Regulations, at (202) 435-7700.

SUPPLEMENTARY INFORMATION: Subtitle A of Title V of the GLB Act, /1/ captioned "Disclosure of Nonpublic Personal Information," limits the instances in which a financial institution may disclose nonpublic personal information about a consumer to nonaffiliated third parties and requires financial institutions to provide certain privacy notices to their consumers and customers. /2/ Prior to July 21, 2011, rulemaking authority for the privacy provisions of the GLB Act was shared by eight Federal agencies: the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), the Federal Trade Commission (FTC), the National Credit Union Association (NCUA), the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS), the Securities Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC). Each of the agencies issued rules (which were consistent and comparable) to implement the GLB Act's privacy provisions. /3/

FOOTNOTE 1 Codified at 15 U.S.C. 6801-6809. Section 728 of the Financial Services Regulatory Relief Act of 2006 (Pub. L. 109-351, 120 Stat. 1966 (2006)) amended the GLB Act to require the development of a model privacy form that financial institutions may rely on as a safe harbor to provide privacy notices. END FOOTNOTE

FOOTNOTE 2 15 U.S.C. 6802-6803(a). END FOOTNOTE

FOOTNOTE 3 12 CFR 216 (Board); 12 CFR 332 (FDIC); 16 CFR 313 (FTC); 12 CFR 716 and 741.220 (NCUA); 12 CFR 40 (OCC); 12 CFR 573 (OTS); 17 CFR 248 (SEC); 17 CFR 160 (CFTC). END FOOTNOTE

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) /4/ amended a number of consumer financial protection laws, including the GLB Act. Among other changes, the Dodd-Frank Act transferred rulemaking authority for most of Subtitle A of Title V of the GLB Act, with respect to financial institutions described in section 504(a)(1)(A) of that Act, from the Board, FDIC, FTC, NCUA, OCC, and OTS (collectively, the transferor agencies) to the Bureau, effective July 21, 2011. Pursuant to the GLB Act, the FTC retains rulemaking authority over any financial institution that is a person described in 12 U.S.C. 5519. /5/ The SEC and the CFTC, which are not transferor agencies, also retain rulemaking authority over certain institutions described in sections 504(a)(1)(A)-(B) of the GLB Act. /6/ See sections 1061 and 1093 of the Dodd-Frank Act. Pursuant to the Dodd-Frank Act and the GLB Act, as amended, the Bureau is publishing for public comment an interim final rule establishing a new Regulation P (Privacy of Consumer Financial Information), 12 CFR part 1016, implementing those privacy provisions of the GLB Act for which the Bureau has rulemaking authority.

FOOTNOTE 4 Public Law 111-203, 124 Stat. 1376 (2010). END FOOTNOTE

FOOTNOTE 5 15 U.S.C. 6804(a)(1)(A), (C). With certain statutory exceptions, the FTC generally retains rulemaking authority for motor vehicle dealers predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both. Id.; 12 U.S.C. 5519(a)-(b). END FOOTNOTE

FOOTNOTE 6 15 U.S.C. 6804(a)(1)(A)-(B). The SEC has rulemaking authority over securities brokers and dealers, investment companies, and investment advisers registered with the SEC under the Investment Advisers Act of 1940. Id. at 6804(a)(1)(A), 6805(a)(3)-(5). The CFTC has rulemaking authority over futures commission merchants, commodity trading advisors, commodity pool operators, and introducing brokers subject to the CFTC's jurisdiction under the Commodity Exchange Act with respect to any financial activity. 15 U.S.C. 6804(a)(1)(B); 7 U.S.C. 7b-2(a). END FOOTNOTE

II. Summary of the Interim Final Rule

A. General

The interim final rule combines the transferor agencies' existing rules, with the exception of the FTC's existing rule as it relates to entities described in section 504(a)(1)(C) of the GLB Act /7/ as the Bureau's new Regulation P, 12 CFR part 1016. The Bureau's new Regulation P makes only certain non-substantive, technical, formatting, and stylistic changes. To minimize any potential confusion, the Bureau is substantially preserving the numbering of the Board's Regulation P, other than the new part number. While this interim final rule generally incorporates the transferor agencies' existing regulatory text and appendices (including model forms), the rule has been edited as necessary to reflect nomenclature and other technical amendments required by the Dodd-Frank Act. Notably, this interim final rule does not impose any new substantive obligations on regulated entities.

FOOTNOTE 7 15 U.S.C. 6804(a)(1)(C). With certain statutory exceptions, those entities are motor vehicle dealers predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both. See 12 U.S.C. 5519(a)-(b). END FOOTNOTE

B. Specific Changes

References to the transferor agencies and their administrative structure have been replaced with appropriate references to the Bureau. Conforming edits have been made to internal cross-references and to reflect the scope of the Bureau's authority pursuant to the GLB Act, as amended by the Dodd-Frank Act. Historical references that are no longer applicable, and references to effective dates that have passed, have been removed as appropriate. Appendix B, which listed sample clauses for privacy notices and provided a safe harbor for privacy notices issued with those sample clauses before January 1, 2011, has also been removed, as have any internal cross-references to it. Appendix B was scheduled to be eliminated from each of the transferor agencies' privacy regulations on January 1, 2012. /8/ Financial institutions that delivered annual notices to consumers on or before December 31, 2010 were entitled to rely on the safe harbor for one additional year until their next annual notice was due. /9/ The removal of Appendix B by this interim final rule as of December 30, 2011 does not nullify the validity of privacy notices issued before January 1, 2011 using Appendix B's sample clauses, including during the intervening two days of December 30 and 31, 2011.

FOOTNOTE 8 See 76 FR 62890 (Dec. 1, 2009). END FOOTNOTE

FOOTNOTE 9 See id. at *62909 & n. 225. END FOOTNOTE

--This is a summary of a Federal Register article originally published on the page number listed below--

Interim final rule with request for public comment.

CFR Part: "12 CFR Part 1016"

RIN Number: "RIN 3170-AA06"

Citation: "76 FR 79025"

Document Number: "Docket No. CFPB-2011-0028"

Federal Register Page Number: "79025"

"Rules and Regulations"