Financial services firms will probably have an extra eight months to comply with the privacy provisions in the Gramm-Leach-Bliley Act, according to Marcia Sullivan, a spokeswoman for the Consumer Bankers Association, Arlington, VA.
“I have learned that the legislation will not be delayed, but the enforcement of it probably will be delayed,” she said yesterday.
The Gramm-Leach-Bliley Act, which outlines the rules by which banks, insurance companies and securities firms can merge, is scheduled to become effective Nov. 12. However, legislators are planning to give companies until July 1, 2001, to comply with the privacy provisions, according to reports. The provisions require financial firms to give their customers notice of their privacy policies and allow them to opt out of having their information shared with third parties.
Small banks in particular needed the extra time to comply with the regulations, Sullivan said.
“There is so much systems work, and so much mailing that needs to be done,” she said. “There is no way banks were going to be in compliance by November, and even to be ready by next July is going to be difficult.”
Part of the problem is that many small banks depend on third-party printers and mailing houses to handle their mailings, and many of those service providers will be overloaded with work once the banks begin mailing their privacy policies, she said.
Meanwhile, Rep. Edward Markey, D-MA, called for the legislative agencies that oversee financial services firms not to delay the privacy initiatives.
The issue is becoming increasingly politicized as Democratic legislators last week said they would seek to push through President Clinton’s call for stricter privacy legislation.
The agencies that oversee financial services firms are scheduled to come out with their interpretations of the privacy provisions of the Gramm-Leach-Bliley Act this week. The Office of the Comptroller of the Currency was expected to release its interpretation of the rules by Wednesday and some other agencies, including the National Credit Union Administration, were expected to release their interpretations of the rules even sooner, Sullivan said.
