Eliminate Privacy Notice Confusion Actby Representative Blaine Luetkemeyer
Posted on 2013-03-12
LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 749) to amend the Gramm-Leach-Bliley Act to provide an
exception to the annual privacy notice requirement.
The Clerk read the title of the bill.
The text of the bill is as follows: H.R. 749 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.
This Act may be cited as the ``Eliminate Privacy Notice Confusion Act''.
SEC. 2. EXCEPTION TO ANNUAL PRIVACY NOTICE REQUIREMENT UNDER THE GRAMM-LEACH-BLILEY ACT.
Section 503 of the Gramm-Leach-Bliley Act (15 U.S.C. 6803) is amended by adding at the end the following: ``(f) Exception to Annual Notice Requirement.--A financial institution that-- ``(1) provides nonpublic personal information only in accordance with the provisions of subsection (b)(2) or (e) of section 502 or regulations prescribed under section 504(b), and ``(2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with this section, shall not be required to provide an annual disclosure under this section until such time as the financial institution fails to comply with any criteria described in paragraph (1) or (2).''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Missouri (Mr. Luetkemeyer) and the gentleman from California (Mr. Sherman) each will control 20 minutes.
The Chair recognizes the gentleman from Missouri.
General Leave Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks and submit extraneous materials for the Record on H.R. 749.
The SPEAKER pro tempore. Is there objection to the request of the gentleman from Missouri? There was no objection.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself as much time as I may consume.
I rise today in strong support of H.R. 749, the Eliminate Privacy Notice Confusion Act.
[[Page H1338]] Businesses in America are drowning in a sea of red tape, and the never-ending regulatory onslaught threatens financial institutions' ability to lend to consumers. One banker that testified before the Financial Services Committee last year said that, as a senior executive, he currently spends as much as 80 percent of his time working on compliance-related issues, compared to approximately 20 percent as little as 3 years ago. As he said in that hearing: Every dollar spent on compliance is a dollar less that we have to lend and invest in the communities we serve. Every hour I spend on compliance is an hour I could be spending with customers and potential customers, acquiring new deposits and making new loans.
In the Financial Services Committee, we have heard from countless bankers and credit unions that the costs associated with complying with rules and regulations are ballooning rapidly and diminishing financial institutions' ability to lend, forcing them to raise the fees they charge their customers for basic services. The costs stemming from red tape vary, from managerial expenses for monitoring employees' compliance, to printing and postage expenses to provide written disclosures to customers.
This bipartisan bill will help reduce compliance burdens and confusion among consumers. Federal law currently requires financial institutions to issue disclosure notices to consumers that detail the institution's privacy policies if it shares customers' nonpublic personal information, as well as the customer's right to opt out of sharing this information. These disclosures must be issued when a customer relationship is first established and annually in paper form, even if no policy changes have occurred. My bill would require institutions to provide these notices only if they have changed a policy or practice related to the privacy of the consumer.
This may seem like a simple change, but its impact on financial institutions is significant. Requiring these institutions to send annual notices even when no changes have been made is redundant, unnecessary, and costly.
Mr. Speaker, this bill would permit financial institutions to redirect these resources towards lending, staffing, and lowering the cost of financial services. For consumers, these mailings typically serve to clog up mailboxes and confuse even the best of us. In fact, a recent voter survey conducted by Voter/Consumer Research indicated that fewer than one-quarter of consumers read the privacy notifications they receive, and over three-quarters of consumers would be more likely to read them if they were only sent when a financial institution changed its policies.
This bill will make the mailings more significant to the consumer because they would only come after a change in policy. Let me reiterate: This legislation will only remove the annual privacy notice requirement if an institution has not, in any way, changed its privacy policies or procedures. This legislation does not exempt any institution from an initial privacy notice, nor does it allow a loophole for an institution to avoid using an updated notice.
This language is not controversial; it does not jeopardize consumer privacy; and it does not exempt any institution from having to produce an initial or amended privacy notice. This legislation does eliminate millions of costly and confusing mailings.
H.R. 749 enjoys broad support within the financial services industry, from credit unions and community services to money center banks; and here in Congress, this bill is one of the few that both Republicans and Democrats can agree on. In fact, previous versions of this bill passed on voice vote in both the 111th and 112th Congresses, with the most recent vote occurring just before this past Christmas.
I want to thank the gentleman from California (Mr. Sherman) for his work on this bill. He has been tireless; he has been relentless; he has been a huge supporter, and it is a big issue to him and his constituents as well. I also want to thank Chairman Hensarling and Ranking Member Waters for helping to ensure swift passage of this legislation.
I urge my colleagues to again voice their support in favor of this bill. H.R. 749 may be short and simple, but it will have a meaningful impact on financial institutions by increasing their resources so they can do what they do best--lend.
Mr. Speaker, I reserve the balance of my time.