Magazine article The RMA Journal

Privacy Regulations Predicted to Be a Top Priority for Banks over Next 10 Years

Magazine article The RMA Journal

Privacy Regulations Predicted to Be a Top Priority for Banks over Next 10 Years

Article excerpt

With the privacy provisions of the Gramm Leach Bliley Act kicking in on July 1, 2001, banks are rearranging their risk priorities to focus on privacy issues. A recent survey, commissioned by RSM MeGladrey, Inc., a national accounting, tax, and consulting-firm serving-financial institutions and mid-sized businesses, shows that the majority of the community banks polled are taking measures to address the privacy issue. However, bank officers surveyed said they have ongoing concerns, mostly procedural, about how to handle the anticipated privacy regulations.

Privacy is quickly overtaking other regulatory risk issues in prominence," said Matt Schriner, RSM McGladrey managing director and consultant to financial institutions. "According to industry buzz, the most important regulatory activity that banks engage in over the next 10 years could be developing and implementing plans and policies to comply with tough federal privacy laws."

When asked what the biggest challenge facing their bank will be when dealing with the new privacy laws, the banks indicated the following:

* Notification, disclosure and communication with customers (27%).

* Paperwork (19%).

* Understanding the requirements of regulation (19%).

* Expenses involved with compliance (14%).

* Time involved with compliance (11%).

* Staff training (11%).

* Waiting to see how state and federal requirements will be implemented (11%).

At 24% of the surveyed banks an officer is assigned to address privacy issues; 22% of the banks reported an internal privacy committee had formed to examine privacy issues.

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