U.S. Senator Pat Toomey has cosponsored bipartisan legislation that would modernize financial privacy notifications that banks provide consumers. The legislation would require banks to alert customers when their privacy policies and information-sharing practices change, while eliminating duplicative, annual, legalese-ridden notifications that are often neglected by consumers.
The Privacy Notice Modernization Act was introduced by Sens. Sherrod Brown (D-Ohio) and Jerry Moran (R-KS). In addition to Sen. Toomey, it is cosponsored by Sens. Jon Tester (D-MT), Mike Johanns (R-NE), Mark Warner (D-VA), Heidi Heitkamp (D-ND) and Roy Blunt (R-MO).
"This bipartisan commonsense legislation eliminates a costly requirement that is confusing to consumers. Banks would still be required to notify consumers when privacy policies change, but they need not flood families with notices through the excessive, inefficient and wasteful process of mailing out annual privacy notices. I'm happy to cosponsor this bill to make life easier for Pennsylvania's families and I commend Sens. Brown and Moran for introducing it," said Sen. Toomey.
Under the Gramm-Leach-Bliley Act (GLBA), banks are annually required to alert consumers about their information-collection and information-sharing practices in writing. Unfortunately, these annual privacy notices have become so long, cluttered, and routine that most consumers are either confused by them or simply do not read them at all. The requirement is also costly for small institutions like community banks and credit unions.
Sens. Brown and Moran's bill is supported by the American Bankers Association (ABA), the Independent Community Bankers of America (ICBA), the Credit Union National Association (CUNA), and the National Association of Federal Credit Unions (NAFCU).
Pennsylvania's banking community thanked Sen. Toomey for his efforts.
"Senator Toomey's support is critical to helping banks eliminate this unnecessary expense. Ending this annual mailing will free up capital that we can put to better use in our community," said Patricia A. Husic, president & CEO of Centric Bank in Harrisburg.
"I commend Senator Toomey for co-sponsoring The Privacy Notice Modernization Act to remove a needless requirement burdening community banks and help make privacy notification more meaningful to consumers," said Timothy P. Sissler, president & CEO of Reliance Bank in Altoona.
"PSECU would like to thank Senator Toomey for his leadership on this issue," said PSECU President Gregory A. Smith. " The Privacy Notice Modernization Act eliminates a redundant requirement that is confusing to consumers and will allow the credit union to focus on our mission of serving our members. And as a member-owned financial cooperative, it is our members' money that pays for the notification, so it also represents a cost savings for them."
"We go to great lengths to protect our customers' privacy and ensure the safety of their personal information. The mandated annual privacy notices do not add any value for our customers, who are both confused by the required language and annoyed by what they perceive to be a waste of paper and money as they receive similar notices from every company with which they do business. Also, if a customer does elect to "opt out", we are still required to send a notice to them the next year, which makes them think we haven't listened to or complied with their instructions to opt out. There has to be a better way to accomplish the same goal," said Dave Hostetter, executive vice-president of Fulton Financial Corporation in Lancaster County.
"As President and CEO of a community bank operating in Central Pennsylvania, I express my full support of the proposed legislation to eliminate the required annual privacy notice mailings. Co-sponsored by Senator Toomey, this bill would reduce our mailing expenditures and grant us the opportunity to reinvest more dollars in our local communities. This commonsense legislation would reinforce to the public the importance of modernizing outdated policies in an era where almost any information can be communicated electronically. I applaud Senator Toomey for his progressive thinking and commitment to strengthening our communities," said Rory G. Ritrievi, President and CEO, Mid Penn Bank in Dauphin County.