12 C.F.R. Subpart A—Privacy and Opt Out Notices
Title 12 - Banks and Banking
(a) Initial notice requirement. You must provide a clear and conspicuous notice that accurately reflects your privacy policies and practices to a: (1) Member, not later than when you establish a member relationship, except as provided in paragraph (e) of this section; and (2) Consumer, before you disclose any nonpublic personal information about the consumer to any nonaffiliated third party, if you make such a disclosure other than as authorized by §§716.14 and 716.15. (b) When initial notice to a consumer is not required. You are not required to provide an initial notice to a consumer under paragraph (a) of this section if: (1) You do not disclose any nonpublic personal information about the consumer to any nonaffiliated third party, other than as authorized by §§716.14 and 716.15; and (2) You do not have a member relationship with the consumer. (c) When you establish a member relationship—(1) General rule. You establish a member relationship when you and the consumer enter into a continuing relationship. (2) Special rule for loans. You establish a member relationship with a consumer when you originate, or acquire the servicing rights to a loan to the consumer for personal, household or family purposes and that is the only basis for the member relationship. If you subsequently transfer the servicing rights to that loan to another financial institution, the member relationship transfers with the servicing rights. (3)(i) Examples of establishing member relationship. You establish a member relationship when the consumer: (A) Becomes your member under your bylaws; (B) Is a nonmember and opens a credit card account with you jointly with a member under your procedures; (C) Is a nonmember and executes the contract to open a share or share draft account with you or obtains credit from you jointly with a member, including an individual acting as a guarantor; (D) Is a nonmember and opens an account with you and you are a credit union designated as a low-income credit union; (E) Is a nonmember and opens an account with you pursuant to state law and you are a state-chartered credit union. (ii) Examples of loan rule. You establish a member relationship with a consumer who obtains a loan for personal, family, or household purposes when you: (A) Originate the loan to the consumer and retain the servicing rights; or (B) Purchase the servicing rights to the consumer's loan. (d) Existing members. When an existing member obtains a new financial product or service that is to be used primarily for personal, family, or household purposes, you satisfy the initial notice requirements of paragraph (a) of this section as follows: (1) You may provide a revised policy notice, under §716.8, that covers the member's new financial product or service; or (2) If the initial, revised, or annual notice that you most recently provided to that member was accurate with respect to the new financial product or service, you do not need to provide a new privacy notice under paragraph (a) of this section. (e) Exceptions to allow subsequent delivery of notice. (1) You may provide the initial notice required by paragraph (a)(1) of this section within a reasonable time after you establish a member relationship if: (i) Establishing the member relationship is not at the member's election; (ii) Providing notice not later than when you establish a member relationship would substantially delay the member's transaction and the member agrees to receive the notice at a later time. (2) Examples of exceptions. (i) Not at member's election. Establishing a member relationship is not at the member's election if you acquire a member's deposit liability from another financial institution and the member does not have a choice about your acquisition. (ii) Substantial delay of member's transaction. Providing notice not later than when you establish a member relationship would substantially delay the member's transaction when: (A) You and the individual agree over the telephone to enter into a member relationship involving prompt delivery of the financial product or service; or (B) You establish a member relationship with an individual under a program authorized by Title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) or similar student loan programs where loan proceeds are disbursed promptly without prior communication between you and the member. (iii) No substantial delay of member's transaction. Providing notice not later than when you establish a member relationship would not substantially delay the member's transaction when the relationship is initiated in person at your office or through other means by which the member may view the notice, such as on a web site. (f)(1) Joint relationships. If two or more consumers jointly obtain a financial product or service, other than a loan, from you, you may satisfy the requirements of paragraph of this section by providing one initial notice to those consumers jointly. (2) Special rule for loans. (i) You are required to provide an initial notice to a borrower or guarantor on a loan if you share his or her nonpublic personal information with nonaffiliated third parties other than for purposes under §§716.13, 716.14 and 716.15. (ii) You may satisfy the annual notice requirements of §716.5 by providing one notice to those borrowers and guarantors jointly. (g) Delivery. When you are required to deliver an initial privacy notice by this section, you must deliver it according to the methods in §716.9. If you use a short-form initial notice for nonmember consumers according to §716.6(c), you may deliver your privacy notice according to §716.6(c)(3). [65 FR 31740, May 18, 2000, as amended at 65 FR 36783, June 12, 2000] (a)(1) General rule. You must provide a clear and conspicuous notice to members that accurately reflects your privacy policies and practices not less than annually during the continuation of the member relationship. Annually means at least once in any period of 12 consecutive months during which that relationship exists. You may define the 12-consecutive-month period, but you must apply it to the member on a consistent basis. (2) Example. You provide a notice annually if you define the 12-consecutive-month period as a calendar year and provide the annual notice to the member once in each calendar year following the calendar year in which you provide the initial notice. For example, if a member opens an account on any day of year one, you must provide an annual notice to that member by December 31 of year two. (b) (1) Termination of member relationship. You are not required to provide an annual notice to a former member. (2) Examples. Your member becomes your former member when: (i) An individual is no longer your member as defined in your bylaws; (ii) In the case of a nonmember's share or share draft account, the account is inactive under the credit union's policies; (iii) In the case of a nonmember's closed-end loan, the loan is paid in full, you charge off the loan, or you sell the loan without retaining servicing rights; (iv) In the case of a credit card relationship or other open-end credit relationship with a nonmember, you no longer provide any statements or notices to the nonmember concerning that relationship or you sell the credit card receivables without retaining servicing rights; or (v) You have not communicated with the nonmember about the relationship for a period of twelve consecutive months, other than to provide annual privacy notices or promotional material. (c) Delivery. When you are required to deliver an annual privacy notice by this section, you must deliver it according to the methods in §716.9. (a) General rule. The initial and annual privacy notices under §§716.4 and 716.5 must include each of the following items of information that applies to you or to the consumers to whom you send your privacy notice, in addition to any other information you wish to provide: (1) The categories of nonpublic personal information that you collect; (2) The categories of nonpublic personal information that you disclose; (3) The categories of affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information, other than those parties to whom you disclose information under §§716.14 and 716.15; (4) The categories of nonpublic personal information about your former members that you disclose and the categories of affiliates and nonaffiliated third parties to whom you disclose it, other than those parties to whom you disclose information under §§716.14 and 716.15; (5) If you disclose nonpublic personal information to a nonaffiliated third party under §716.13 (and no other exception applies to that disclosure), a separate statement of the categories of information you disclose and the categories of third parties with whom you have contracted; (6) An explanation of the consumer's right under §716.10(a) to opt out of the disclosure of nonpublic personal information to nonaffiliated third parties, including the methods by which the consumer may exercise that right at that time; (7) Any disclosures that you make under section 603(d)(2)(A)(iii) of the Fair Credit Reporting Act (15 U.S.C. 1681a(d)(2)(A)(iii)) (that is, notices regarding the ability to opt out of disclosure of information among affiliates); (8) Your policies and practices with respect to protecting the confidentiality and security of nonpublic personal information; and (9) Any disclosures you make under paragraph (b) of this section. (b) Description of nonaffiliated third parties subject to exceptions. If you disclose nonpublic personal information to third parties as authorized under §§716.14 and 716.15, you are not required to list those exceptions in the initial or annual privacy notices required by §§716.4 and 716.5. When describing the categories with respect to those parties, you are required to state only that you make disclosures to other nonaffiliated third parties as permitted by law. (c) Short-form initial notice with opt out notice for nonmember consumers. (1) You may satisfy the initial notice requirements in §§716.4(a)(2), 716.7(b), and 716.7(c) for a consumer who is not a member by providing a short-form initial notice at the same time as you deliver an opt out notice as required in §716.7. (2) A short-form initial notice must: (i) Be clear and conspicuous; (ii) State that your privacy notice is available upon request; and (iii) Explain a reasonable means by which the consumer may obtain that notice. (3) You must deliver your short-form initial notice according to §716.9. You are not required to deliver your privacy notice with your short form initial notice. You instead may simply provide the consumer a reasonable means to obtain your privacy notice. If a consumer who receives your short-form notice requests your privacy notice, you must deliver your privacy notice according to §716.9. (4) Examples of obtaining privacy notice. You provide a reasonable means by which a consumer may obtain a copy of your privacy notice if you: (i) Provide a toll-free telephone number that the consumer may call to request the notice; or (ii) For a consumer who conducts business in person at your office, maintain copies of the notice on hand that you provide to a consumer immediately upon request. (d) Future disclosures. Your notice may include: (1) Categories of nonpublic personal information that you reserve the right to disclose in the future, but do not currently disclose; and (2) Categories of affiliates or nonaffiliated third parties to whom you reserve the right in the future to disclose, but to whom you do not currently disclose, nonpublic personal information. (e) Examples—(1) Categories of nonpublic personal information that you collect. You satisfy the requirement to categorize the nonpublic personal information that you collect if you list the following categories, as applicable: (i) Information from the consumer; (ii) Information about the consumer's transactions with you or your affiliates; (iii) Information about the consumer's transactions with nonaffiliated third parties; and (iv) Information from a consumer reporting agency. (2) Categories of nonpublic personal information you disclose. (i) You satisfy the requirement to categorize the nonpublic personal information that you disclose if you list the categories described in paragraph (e)(1) of this section, as applicable, and a few examples to illustrate the types of information in each category. (ii) If you reserve the right to disclose all of the nonpublic personal information about consumers that you collect, you may simply state that fact without describing the categories or examples of the nonpublic personal information you disclose. (3) Categories of affiliates and nonaffiliated third parties to whom you disclose. You satisfy the requirement to categorize the affiliates and nonaffiliated third parties to whom you disclose nonpublic personal information if you list the following categories, as applicable, and a few examples to illustrate the types of third parties in each category. (i) Financial service providers; (ii) Non-financial companies; and (iii) Others. (4) Disclosures under exception for service providers and joint marketers. If you disclose nonpublic personal information under the exception in §716.13 to a nonaffiliated third party to market products or services that you offer alone or jointly with another financial institution, you satisfy the disclosure requirement of paragraph (a)(5) of this section if you: (i) List the categories of nonpublic personal information you disclose, using the same categories and examples you used to meet the requirements of paragraphs (a)(2) of this section, as applicable; and (ii) State whether the third party is: (A) A service provider that performs marketing services on your behalf or on behalf of you and another financial institution; or (B) A financial institution with whom you have a joint marketing agreement. (5) Simplified notices. If you do not disclose, and do not intend to disclose, nonpublic personal information about members or former members to affiliates or nonaffiliated third parties except as authorized under §§716.14 and 716.15, you may simply state that fact, in addition to the information you must provide under paragraphs (a)(1), (a)(8), (a)(9) and (c) of this section. (6) Confidentiality and security. You describe your policies and practices with respect to protecting the confidentiality and security of nonpublic personal information if you do both of the following: (i) Describe in general terms who is authorized to have access to the information. (ii) State whether you have security practices and procedures in place to ensure the confidentiality of the information in accordance with your policy. You are not required to describe technical information about the safeguards you use. (7) Joint notice with affiliates. You may provide a joint notice from you and one or more of your affiliates or other financial institutions, as specified in the notice, as long as the notice is accurate with respect to you and the other institution. (a)(1) Form of opt out notice. If you are required to provide an opt out notice under §716.10(a)(1), you must provide a clear and conspicuous notice to each of your consumers that accurately explains the right to opt out under that section. The notice must state: (i) That you disclose or reserve the right to disclose nonpublic personal information about your consumer to a nonaffiliated third party; (ii) That the consumer has the right to opt out of that disclosure; and (iii) A reasonable means by which the consumer may exercise the opt out right. (2) Examples. (i) Adequate opt out notice. You provide adequate notice that the consumer can opt out of the disclosure of nonpublic personal information to a nonaffiliated third party if you: (A) Identify all of the categories of nonpublic personal information that you disclose or reserve the right to disclose and all of the categories of nonaffiliated third parties to whom you disclose the information, as described in §716.6(a)(2) and (3) and state that the consumer can opt out of the disclosure of that information; and (B) Identify the financial products or services that the consumer obtains from you, either singly or jointly, to which the opt out direction would apply. (ii) Reasonable opt out means. You provide a reasonable means to exercise an opt out right if you: (A) Designate check-off boxes in a prominent position on the relevant forms with the opt out notice; (B) Include a reply form together with the opt out notice; (C) Provide an electronic means to opt out, such as a form that can be sent via electronic mail or a process at your web site, if the consumer agrees to the electronic delivery of information; or (D) Provide a toll-free telephone number that consumers may call to opt out. (iii) Unreasonable opt out means. You do not provide a reasonable means of opting out if: (A) The only means of opting out is for the consumer to write his or her own letter to exercise that opt out right; or (B) The only means of opting out as described in any notice subsequent to the initial notice is to use a check-off box that was provided with the initial notice but not included with the subsequent notice. (iv) Specific opt out means. You may require each consumer to opt out through a specific means, as long as that means is reasonable for that consumer. (b) Same form as initial notice permitted. You may provide the opt out notice together with or on the same written or electronic form as the initial notice you provide in accordance with §716.4. (c) Initial notice required when opt out notice delivered subsequent to initial notice. If you provide the opt out notice later than required for the initial notice in accordance with §716.4, you must also include a copy of the initial notice in writing or, if the consumer agrees, electronically. (d) Joint relationships. (1) If two or more consumers jointly obtain a financial product or service, other than a loan, from you, you may provide only a single opt out notice. Your opt out notice must explain how you will treat an opt out direction by a joint consumer as explained in the examples in paragraph (d)(5) of this section. (2) Any of the joint consumers may exercise the right to opt out. You may either: (i) Treat an opt out direction by a joint consumer to apply to all of the associated joint consumers; or (ii) Permit each joint consumer to opt out separately. (3) If you permit each joint consumer to opt out separately, you must permit one of the joint consumers to opt out on behalf of all of the joint consumers. (4) You may not require all joint consumers to opt out before you implement any opt out direction. (5) Example. If John and Mary have a joint share account with you and arrange for you to send statements to John's address, you may do any of the following, but you must explain in your opt out notice which opt out policy you will follow: (i) Send a single opt out notice to John's address, but you must accept an opt out direction from either John or Mary. (ii) Treat an opt out direction by either John or Mary as applying to the entire account. If you do so, and John opts out, you may not require Mary to opt out as well before implementing John's opt out direction. (iii) Permit John and Mary to make different opt out directions. If you do so, and if John and Mary both opt out, you must permit one or both of them to notify you in a single response (such as on a form or through a telephone call). (6) Special rule for loans. (i) You are required to provide an initial opt out notice to a borrower or guarantor on a loan if you share his or her nonpublic personal information with nonaffiliated third parties other than for purposes under §§716.13, 716.14 and 716.15. (ii) You may satisfy your annual opt out notice requirement by providing one notice to those borrowers and guarantors jointly. (e) Time to comply with opt out. You must comply with the consumer's opt out direction as soon as reasonably practicable after you receive it. (f) Continuing right to opt out. A consumer may exercise the right to opt out at any time. (g) Duration of consumer's opt out direction. (1) A consumer's direction to opt out under this section is effective until the consumer revokes it in writing or, if the consumer agrees, electronically. (2) When a member relationship terminates, the member's opt out direction continues to apply to the nonpublic personal information that you collected during or related to the relationship. If the individual subsequently establishes a new member relationship with you, the opt out direction that applied to the former relationship does not apply to the new relationship. (h) Delivery. When you are required to deliver an opt out notice by this section, you must deliver it according to the methods in §716.9. [65 FR 31740, May 18, 2000, as amended at 65 FR 36783, June 12, 2000] (a) General rule. Except as otherwise authorized in this part, you must not, directly or through any affiliate, disclose any nonpublic personal information about a consumer to a nonaffiliated third party other than as described in the initial notice that you provided to that consumer under §716.4, unless: (1) You have provided to the consumer a revised notice that accurately describes your policies and practices; (2) You have provided to the consumer a new opt out notice; (3) You have given the consumer a reasonable opportunity, before you disclose the information to the nonaffiliated third party, to opt out of the disclosure; and (4) The consumer does not opt out. (b) Examples. (1) Except as otherwise permitted by §§716.13, 716.14 and 716.15, you must provide a revised notice if you— (i) Disclose a new category of nonpublic personal information to any nonaffiliated third party; (ii) Disclose nonpublic personal information to a new category of nonaffiliated third party; or (iii) Disclose nonpublic personal information about a former member to a nonaffiliated third party, and that former member has not had the opportunity to exercise an opt out right regarding that disclosure. (2) A revised notice is not required if you disclose nonpublic personal information to a new nonaffiliated third party that you adequately described in your prior notice. (c) Delivery. When you are required to deliver a revised privacy notice by this section, you must deliver it according to the methods in §716.9. (a) How to provide notices. You must provide any privacy notices and opt out notices, including short-form initial notices, that this part requires so that each consumer can reasonably be expected to receive actual notice in writing or, if the consumer agrees, electronically. (b) (1) Examples of reasonable expectation of actual notice. You may reasonably expect that a consumer will receive actual notice if you: (i) Hand-deliver a printed copy of the notice to the consumer; (ii) Mail a printed copy of the notice to the last known address of the consumer; (iii) For the consumer who conducts transactions electronically, post the notice on the electronic site and require the consumer to acknowledge receipt of the notice as a necessary step to obtaining a particular financial product or service; (iv) For an isolated transaction with the consumer, such as an ATM transaction, post the notice on the ATM screen and require the consumer to acknowledge receipt of the notice as a necessary step to obtaining the particular financial product or service. (2) Examples of unreasonable expectations of actual notice. You may not, however, reasonably expect that a consumer will receive actual notice if you: (i) Only post a sign in your branch or office or generally publish advertisements of your privacy policies and practices; (ii) Send the notice via electronic mail to a consumer who does not obtain a financial product or service from you electronically. (c) Annual notices only. You may reasonably expect that a member will receive actual notice of your annual privacy notice if: (1) The member uses your web site to access financial products and services electronically and agrees to receive notices at your web site and you post your current privacy notice continuously in a clear and conspicuous manner on your web site; or (2) The member has requested that you refrain from sending any information regarding the member relationship, and your current privacy notice remains available to the member upon request. (d) Oral description of notice insufficient. You may not provide any notice required by this part solely by orally explaining the notice, either in person or over the telephone. (e) Retention or accessibility of notices for members. (1) For members only, you must provide the initial notice required by §716.4 (a)(1), the annual notice required by §716.5(a) and the revised notice required by §716.8 so that the member can retain them or obtain them later in writing or, if the member agrees, electronically. (2) Examples of retention or accessibility. You provide the privacy notice to the member so that the member can retain it or obtain it later if you: (i) Hand-deliver a printed copy of the notice to the member; (ii) Mail a printed copy of the notice to the last known address of the member upon request of the member; or (iii) Make your current privacy notice available on a web site (or a link to another web site) for the member who obtains a financial product or service electronically and agrees to receive the notice at the web site.
Title 12: Banks and Banking
PART 716—PRIVACY OF CONSUMER FINANCIAL INFORMATION
Subpart A—Privacy and Opt Out Notices
§ 716.4 Initial privacy notice to consumers required.
§ 716.5 Annual privacy notice to members required.
§ 716.6 Information to be included in initial and annual privacy notices.
§ 716.7 Form of opt out notice to consumers and opt out methods.
§ 716.8 Revised privacy notices.
§ 716.9 Delivering privacy and opt out notices.
