Same Old Same Old Reg P?

On October 20th of 2014, the CFPB made public their final rule on updating Regulation P, the reg that requires banks to annually snailmail those clunky Privacy Policy notices to customers, where the only words we likely understand are FACTS, WHY, WHAT, and HOW.  Many expected that the updated ruling would allow banks to substitute website-based Privacy Policy display for snailmail notification, and would give banks latitude and guidance to provide clearer, more specific, more understandable privacy information to customers.

So how did those expectations work out?  Will customers be better informed under the new rule?

Maybe.  It's complicated.


Under the new rule, banks are indeed now enabled to post Privacy Policies on websites provided that they comply with each of 9 detailed requirements. Although these details may seem limiting, we believe that a large percentage of institutions will qualify and will switch to e-posting for the best of reasons:  Customers will have continual access to up-to-date bank privacy policy.  (The fact that banks will likely save printing and mailing expense will be a contributing motive.)   


Happy customer, happy bank ... life is good. But there's a kicker in the rule.  All of this works if and only if: 

§1016.9(c)(2)(i)(E) You use the model privacy form in the appendix to this part for your annual privacy notice.

Yes, it's the same old same old model privacy form designed by a large committee in 2009 and printed on millions of trash-bound mailers since 2010!

Huh?   The privacy boilerplate I haven't understood for years on my mailer will now be available continuously online for me to not understand as I view it on my desktop?  My iPad?  My smartphone?  This is progress?

Actually, yes this is indeed progress.  The silver lining to the Regulation P revision is this:  Given that a bank e-posts the compliant Model Form, nothing prohibits the additional availability and one-click access to modern, special purpose "layers" of privacy information optimized for customer focus and understanding.

Because it's cleared the way for innovative and effective digital privacy communication for masses of Americans, the revised Reg P is a great win for banking customers, and a giant step forward for consumer privacy.

Next blog, we'll explore the many new opportunities facilitated by e-delivery and a "layered" approach to privacy notification.