Magazine article American Banker

Regulators Push Early Privacy Compliance

Magazine article American Banker

Regulators Push Early Privacy Compliance

Article excerpt

Some federal regulators are putting teeth in their warning to bankers not to wait until the last minute to comply with the new privacy rules. Financial institutions were recently given until July 1, 2001 -- or eight extra months -- to comply with the consumer privacy provisions of the Gramm-Leach-Bliley Act. But regulators urged them to be ready to send customers annual notices of privacy policies and give them a chance to block sharing of personal data with unaffiliated third parties long before that deadline. "It is important that institutions move ahead swiftly," Office of Thrift Supervision Director Ellen Seidman said May 10 just before voting for the regulations. "What cannot happen is folks breathing a sigh of relief and showing up on our doorstep in June asking for an extension." To ensure that bankers don't dawdle, the Office of Thrift Supervision this fall will start monitoring the progress that its 1,100 thrifts are making in drafting their notices and programming their computer systems. The Federal Deposit Insurance Corp. could begin tracking preparation efforts as soon as early next year. The OTS' planned approach resembles how regulators tracked financial institutions' preparations last year for the year-2000 computer bug, by setting milestones and identifying stragglers early. "This fall, during routine compliance examinations, we'll start asking about the progress and preparations they are making for compliance" with the privacy rules, an OTS spokesman said. "During the first quarter of next year, in addition to regularly scheduled exams, we'll do off-site monitoring, which involves calling every institution and asking questions about their preparation and progress." The FDIC will check preparation efforts as part of regularly scheduled compliance exams, after they are updated by an interagency task force, said Steven D. …

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