In the next six months, you will be getting an unprecedented lesson in how your personal information is gathered and used by financial institutions — and your first real opportunity to regain some control over it. Some have estimated that households may receive 30 or more separate notices from the many different financial institutions with which they do business. Because of a new federal law, you will be getting notices and will be entitled to new privacy protection if you are a consumer of financial products or services used for personal, family or household purposes.
In late 1999, Congress passed the Gramm-Leach-Bliley Act removing longstanding legal barriers between the banking, insurance and securities businesses. These institutions may now, for the first time, work closely together and own each other. While the law brought down many barriers between these providers of financial products, it put up walls protecting the privacy of nonpublic information they obtain from customers. Regulations under the Act require that businesses which provide financial products or financial services send prescribed notices to customers and adhere to a complex new set of rules.
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As part of the Gramm-Leach-Bliley Act, banks, credit unions, insurance companies, securities brokers and any other companies providing “financial” products or services will be sending customers a copy of the financial institution’s privacy policy. Before July 1, 2001, and annually thereafter, financial institutions that now have your business will deluge you with mail informing you of their privacy policies.
You will also be given the right to “opt out” of all sharing of non-public personal information. You will receive “clear and conspicuous” notices identifying the categories of information that would be disclosed and the types of companies that would get this information
So when piles of letters that look like junk mail start filling your mailbox later this year, think twice before tossing them. Take this chance to learn about how your personal information is used and to make an informed choice about whether you mind its being shared.
Stephen Lichatin III and Stephen Zubiago are attorneys in the Providence office of Nixon Peabody LLP.
