House Passes Luetkemeyer-Sherman Bill to Eliminate Costly, Redundant Financial Regulations

Press Release

By:  Brad Sherman
Date: Dec. 12, 2012
Location: Washington, DC

The House of Representatives today passed the Eliminate Privacy Notice Confusion Act (H.R. 5817), a bipartisan bill offered by Representatives Brad Sherman (D-CA) and Blaine Luetkemeyer (R-MO) to eliminate a costly and unnecessary paperwork burden on banks and credit unions. The bill passed the House by a unanimous voice vote.

"This common-sense, overdue legislation makes a minor change to our banking laws to revise a very costly and unnecessary rule that requires financial institutions such as community banks and credit unions to send each of their customers a copy of their privacy policy every year, regardless of whether the policy has changed or there is any new information for the consumer," said Sherman. "This pointless act costs these businesses millions of dollars each year -- dollars they can now invest in new loans and better service for their customers."

Currently, financial institutions are required to mail annual privacy notices to all of their customers explaining their information sharing practices. Financial institutions are required to send these notices each year, even if nothing about their privacy policies has changed. At best, this is an unnecessary and wasteful use of resources. At worst, it could cause consumers to assume they can routinely ignore notices that may contain information about important changes.

H.R. 5817 would require institutions to provide information to their customers only if there has been a change in any policy or practice related to the privacy of the customer. This bill would eliminate the millions of costly, confusing, and often ignored mailings that cost millions to produce each year. As a result, information included in mailings would likely be more significant to the consumer because they would come only after a change in policy.

Sherman continued, "Simply put, this bill is a win-win that improves customer awareness and reduces costly regulatory burdens for credit unions, banks and other financial institutions. I hope the Senate follows our lead by quickly passing the Eliminate Privacy Notice Confusion Act and sending it to the President's desk to be signed into law."