ALTA® Alert: Consumer Privacy
|June 13, 2000|
Federal Regulators Issue Privacy Regulations
Extend Effective Date to July, 2001- Provide Solutions for the Title Insurance Industry
The Federal financial services regulatory agencies and the Federal Trade Commission have published final regulations implementing the Gramm-Leach-Bliley Act (GLBA) privacy law. There is good news for title professionals. The regulations are clear that none of the federal regulators will enforce the privacy requirements for insurance providers, but will leave that to the states. ALTA will be working with the National Association of Insurance Commissioners on state privacy laws. These rules are likely to serve as a model for the state laws and rules.
The Federal GLBA privacy statute imposes two major requirements: (1) all "financial institutions" (including insurance agents and companies) must provide their customers with a notice that outlines their information handling practices both when the customer relationship is established and at least annually thereafter, for as long that customer relationship exists; and (2) all "financial institutions" are prohibited from sharing nonpublic personal information about a consumer with any non-affiliated third party. This prohibition applies unless the consumer has an opportunity to direct that the information not be shared (a so-called "opt-out" right) or the sharing is otherwise exempted under the terms of the Act.
As a model, the provisions are very favorable to the title and settlement industry. ALTA and its members were able to successfully educate federal regulators regarding the day-to-day reality of the real estate settlement services and insurance business. Specific provisions include the following:
Real estate settlement service providers are generally relieved of providing subsequent privacy notices on an annual basis. The FTC regulations specifically recognize that "customer relationships" with members of the real estate settlement services industry effectively terminate after the real estate settlement has been completed;
Companies need not be in full compliance with the new privacy requirements until July 1, 2001.
For further information contact Ann vom Eigen, Legislative Counsel 800-787-2582, ext 214.
If you have questions, please call 1-800-787-ALTA, extension 214 for Ann vom Eigen, Legislative Counsel (email@example.com), or send an e-mail to GovernmentAffairs@alta.org or contact us via www.alta.org