Almost 70 percent of banks and savings associations do not plan to share customer information with nonaffiliated third parties after the Gramm-Leach-Bliley Act takes effect, according to a privacy study released yesterday by Bankers Systems Inc. However, only 34 percent of credit unions and 48 percent of finance companies do not plan to do so.
The Gramm-Leach-Bliley Financial Privacy Act requires financial institutions to disclose their privacy policies to customers and, in some circumstances, restricts banks from sharing customers' nonpublic, personal information. The deadline for financial institutions to disclose their data-sharing practices to customers is July.
“This is major legislation,” said Peggy Wilson, director of business communication at Bankers Systems, St. Cloud, MN, a CCH Inc. company. “Primarily we wanted to see what the industry was doing and what attitudes were toward sharing and not sharing consumer information.”
Bankers Systems, a compliance resource firm for financial companies, conducted the survey of the data sharing practices among its clients — more than 3,900 financial institutions including banks, savings associations, credit unions and finance companies. As a service provider to the industry, Bankers Systems thought the results would benefit its clients, Wilson said.
Bankers Systems has been conducting another survey on disclosure through its privacy Web site at www.privacyheadquarters.com. Among the more than 500 financial institutions that have responded to the second survey, 9 percent have sent privacy notices to customers; 28 percent have completed drafting and printing disclosure notices; 52 percent are developing their privacy notices; and 11 percent are studying the requirements in order to draft disclosure notices.
Bankers Systems set up the privacy Web site as a resource for its clients.