Trott's Legislation to Modernize Auto Industry Lending Passes Committee With Bipartisan Support

Press Release

Today, U.S. Representative Dave Trott (MI-11) issued the following statement following the Committee on Financial Services' passage of the Privacy Notification Technical Clarification Act (H.R. 2396), bipartisan legislation he introduced to modernize the privacy notification process of auto lenders and increase consumers' access to lender privacy policies:

"This critical legislation finally allows auto lenders to modernize their privacy notification process, cutting down on the high compliance costs they're forced to pass along to consumers while increasing consumer access to important privacy information. In Michigan, the heartland of our nation's domestic auto industry, legislation that decreases the burden placed on the auto industry, helps provide more loans for American families, and provides greater clarity and access to information for automotive consumers is a good deal for everyone. I look forward to the full House's consideration of this common-sense legislation."

Financial institutions must issue privacy notices to consumers upon issuance of the consumer's first loan with that financial institution. In December 2015, legislation was signed into law that lifted the previous requirement that financial institutions mail this same privacy policy annually. This legislation allowed financial institutions to modernize their privacy policy notification process, requiring institutions mail privacy policy notices only if the policy has changed from the previous year.

However, this legislation unintentionally omitted some loan insurers from this modernization option, including auto lenders. The Privacy Notification Technical Clarification Act would fix this oversight and extend this same modernization option to those lenders previously omitted, including auto lenders. Under this legislation, auto lenders that opt out of the mailed annual privacy notification requirement must make their privacy policy readily accessible on their website and available in hardcopy upon request.

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