U.S. Sens. Sherrod Brown (D-OH) and Jerry Moran (R-KS) introduced bipartisan legislation today that would streamline 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 is cosponsored by U.S. Sens. Jon Tester (D-MT), Mike Johanns (R-NE), Mark Warner (D-VA), Heidi Heitkamp (D-ND), Pat Toomey (R-PA), and Roy Blunt (R-MO).
"Consumers don't need to be flooded with duplicative and confusing information, we need to make disclosures easier to understand," Brown said. "My commonsense bill would reduce burdensome and unnecessary paperwork -- that burden consumers and community banks and credit unions alike -- and ensure that provide disclosures are timely, clear, and concise."
"Finding the right regulatory balance is vital as we seek to untangle American homes and businesses from a complicated and duplicative regulatory structure," Sen. Moran said. "Smarter regulation of financial privacy notifications will better protect and inform consumers while removing the excessive burdens placed on financial institutions. The House of Representatives has already passed a similar measure, and I look forward to swift Senate passage of this commonsense legislation."
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 they simply do not read them at all. The requirement is also costly for small institutions like community banks and credit unions.
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).