Wastebasket ... here it comes!

Do you recognize this document? If you’re an American with an account at nearly any financial institution, you receive at least one of these printed notices in your snail mail every year. If you're like most of us, you glance at it, scratch your head in bewilderment; then drop it into the trash. 

What is it? It is your Annual Regulation P Privacy Notice sent to you by your financial institution. It tells you what they do with personal information they collect from you. 

What personal information? Stuff like your name, your social security number, your income, your account balances, your payment history, your transaction history, your credit history, etc. Lawyers call this your nonpublic personal information, or NPI. 

Why should you care? In a perfect world, perhaps you needn't pay much attention. But in today’s connected society, knowing what others do with your personal information is becoming vitally important. Your personal identity and privacy are yours to lose … having someone steal or misuse it can ruin your whole day. 

But this notice is so confusing and boring ... and why do all these notices basically look the same? A federal law called Regulation P sets forth a model format for this disclosure. Most banks use the model form to ensure that they fully comply with their disclosure obligation to you under the law. CYA for them ... headscratcher for you. 

Whose law is this? Your financial privacy used to be protected by an alphabet soup of federal agencies (FRB, OCC, FDIC, OTS, GLBA, NCUA, FTC, SEC, and CFTC). Most recently, it is administered by the Consumer Financial Protection Bureau (CFPB). 

So ... what's the point? Simply this ... good privacy news is on the way. CFPB is currently in the process of updating this law, and has suggested a number of changes to make it easier and more convenient for you to know and understand what banks do with your NPI. Next blog, we'll review the changes and improvements that have been proposed as Reg P (12 CFR 1016.9(c)) is revised.