Pub. 7 2016 Issue 2

SUMMER 2016 13 West Virginia Banker However, if such information includes creditworthiness, customers must be given the opportunity to opt out. A second type of infor- mation sharing with affiliates intended for marketing purposes is permitted only after the customer has received notice and provided an opportunity to opt out. The model notice in the Appendix of Regulation P combines GLBA and FCRA requirements. Since FCRA does not require an annual notice, institutions using the model notice would appear to be in compliance with FCRA, as long the practices on affiliate sharing do not change. Alternative Delivery of Annual Notice The relief provided by the FAST Act occurred a little over a year after the CFPB amended Regulation P to permit, in some cases, an electronic alternative to the annual mailing. The FAST Act relief is considered broader than the changes to Regulation P that were effec- tive October 2014. Under those changes, a financial institution may post its annual privacy disclosure to its web site if all of the following conditions are met: 1. Customers’ NPI is not shared with nonaffiliated third parties in a manner that requires the opportunity to opt out. 2. The institution’s disclosure required under GLBA and Regula- tion P excludes the opt out right under FCRA 3. The institution shares NPI with an affiliate and has previously provided the affiliate marketing disclosure or the annual privacy notice is not the sole channel for communicating affiliate market- ing notice 4. The institution has not changed the content of its annual privacy notice since its most recent notice provided to customers, which could have been initial, revised, or annual notices. AND 5. Provides notice that follows the model form in Regulation P. Conclusion Changes to GLBA as a result of the FAST Act provide banks an op- portunity to save the time and expense associated with annual privacy notices. Institutions meeting both criteria under the FAST Act may forego the annual mailing of privacy notices without having to post such notices electronically. Institutions considering taking advantage of such the exception provided by the FAST Act should consider performing a detailed review to verify that notices still necessary under GLBA, as amended, and FCRA accurately reflect their current practices. n Chap Donovan is a Senior Manager at Arnett Carbis Toothman LLP, Certified Public Accountants, Charleston, West Virginia. A Certified PublicAccountant,CertifiedRegulatoryComplianceManager,andCer- tified Treasury Professional, Mr. Donovan has forty e years experience in the financial institutions industry. He provides audit, internal audit, loan review, and compliance consulting services to community banks through the firm’s Financial Institutions Service Group. Mr. Donovan can be contacted at 800-642-3601 or chap.donovan@actcpas.com