Pub. 7 2016 Issue 2

www.wvbankers.org 12 West Virginia Banker Using Current Rules with the FAST Act Under current regulations financial institutions must disclose how they use and share customers’ nonpublic personal information (NPI) and whether customers may opt out of such sharing. These disclo- sures must be provided at the time a new customer relationship is established and annually. The FAST Act establishes an exception to the annual notice for any financial institution that: 1. Shares NPI only in a manner that does not require notice or opt out privileges under GLBA; AND 2. Has not changed its policies and practices with regard to disclos- ing NPI since the most recent disclosures provided to customers. It is important to note that, if an institution does not meet both of these tests, the exception no longer applies and annual notices will need to be provided. Provisions of the FAST Act were effective on December 4, 2015. The Consumer Financial Protection Bureau (CFPB) may change its Regulation P to reflect the changes in the law, but as of May 2016, the regulations have not been modified and no guidance has been issued. Technically, institutions implementing the statutory change may be out of compliance with the regulation, but statutes carry more weight than regulations. This is similar to the change in deposit holds in 2010, when the amount available was increased from $100 to $200 as a result of the Dodd Frank Act. Regulation CC still has the $100 amount as of May 2016 and banks have universally implemented the statutory requirement without being criticized. Interaction with FCRA Requirements GLBA, as amended by the FAST Act, does not cover information sharing with affiliates. Instead, affiliate sharing disclosures subject to the provisions of the Fair Credit Reporting Act (FCRA). Specifically, the GLBA privacy notice may incorporate two requirements under FCRA. A financial institution’s sharing of its customers transaction and experience information is not covered by any opt out rights. Introduction Late last year, President Obama signed into law the Fixing America’s Surface Transportation Act (FAST Act). On the surface, banks would usually have no concrete reason to monitor transportation legislation, but, in this case, a provision in the FAST Act amending Section 503 of the Gramm-Leach-Bliley-Act (GLBA) paves the way for relief on privacy notices. By Richard C. Donovan, CPA, CRCM, CTP, Arnett Carbis Toothman LLP FAST Act Eases Requirements on Annual Privacy Notices