Compliance Center: New Law Creates Exception to Annual GLBA Privacy Notice Requirement

On December 4th, President Obama signed into law H.R. 22 (Fixing America’s Surface Transportation Act or the FAST Act). An amendment that creates an exception to the annual privacy notice requirement of the Gramm-Leach-Bliley Act (GLBA) was attached to the transportation bill.

Section 75001 of the FAST Act creates the exception by amending Section 503 of the GLBA. The amendment reads:

(f) EXCEPTION TO ANNUAL NOTICE REQUIREMENT.—A financial institution that—

(1) provides nonpublic personal information only in accordance with the provisions of subsection (b)(2) or (e) of section 502 or regulations prescribed under section 504(b), and

(2) has not changed its policies and practices with regard to disclosing nonpublic personal information from the policies and practices that were disclosed in the most recent disclosure sent to consumers in accordance with this section,

shall not be required to provide an annual disclosure under this section until such time as the financial institution fails to comply with any criteria described in paragraph (1) or (2).

The reference to subsection 502(b)(2) is the exception to opt out requirements for service providers and joint marketing that can be found within the Privacy of Consumer Information regulation 12 CFR 1016.13. And subsection 502(e) exception is the exception to notice and opt out requirements for processing and servicing transactions found in 12 CFR 1016.14.

The new law follows behind the rulemaking from October 2014 by the CFPB which created the alternative online delivery method for annual privacy notices if credit unions met certain conditions.

Compliance Question of the Week

How do I know that someone has passed me counterfeit money?  What should I do once I know it’s counterfeit?  

The proper credit union procedure is to use the counterfeit pen on all large bills (50’s and 100’s). The practice will assure the credit union and our members that we are not passing along counterfeit bills. It may be necessary to make additional bills due to the operation of counterfeit rings and other circumstances. However, it also helps to be familiar with the look and feel of each bill to also help in identifying a counterfeit note. 

If you receive a counterfeit:

 

  1. Do not return it to the passer.
  2. Delay the passer if possible, if you feel it is an intentional act on their behalf.
  3. Observe the passer’s description, as well as that of any companions to aid law enforcement. If possible, obtain the license numbers on any vehicle used.
  4. Notify your supervisor, who will in turn contact the local police department or the U.S. Secret Service field office.
  5. Write your initials and the date in the white border areas of the suspect note along with the initials of the person surrendering the bill(s).
  6. Limit the handling of the note.  Carefully place it in a protective covering, such as an envelope.
  7. Surrender the note or coin to your supervisor for proper reporting.  The designated person will complete the necessary Counterfeit Note Report, From SSF1604m and forward it to the local Department of the Treasury, U.S. Secret Service, 501 I Street, Ste 9-500, Sacramento, CA 95814-2322, to determine authenticity.
  8. The member should be given a manual receipt for the transaction.  If the suspected bill is deemed authentic, the member will be credited for the amount.

How to detect counterfeit money:

Look at the money you receive.  Compare a suspect note with a genuine note of the same denomination and series, paying attention to the quality of printing and paper characteristics.  Look for differences, not similarities.

Portrait

The genuine portrait appears lifelike and stands out distinctly from the background. The counterfeit portrait is usually lifeless and flat. Details merge into the background which is often too dark or mottled.

Federal Reserve and Treasury Seals

On a genuine bill, the saw-tooth points of the Federal Reserve and Treasury seals are clear, distinct, and sharp.  The counterfeit seals may have uneven, blunt, or broken saw-tooth points.

Border

The fine lines in the border of a genuine bill are clear and unbroken.  On the counterfeit, the lines in the outer margin and scrollwork may be blurred and indistinct.

Serial Numbers

Genuine serial numbers have a distinctive style and are evenly spaced.  The serial numbers are printed in the same ink colors as the Treasury seal. On a counterfeit, the serial numbers may differ in color or shade of ink from the Treasury seal. The numbers may not be uniformly spaced or aligned.

Paper

Genuine currency paper has tiny red and blue fibers embedded throughout.  Often counterfeiters try to simulate these fibers by printing tiny red and blue lines on their paper. Close inspection reveals, however, that on the counterfeit note the lines are printed on the surface, not embedded in the paper.  It is illegal to reproduce distinctive paper used in the manufacturing of United States currency.

Related Links:

Legal Briefs

Consumer Financial Protection Bureau (CFPB)

CFPB Director Cordray delivered written testimony before the House Financial Service Committee, discussing the importance of the Financial Stability Oversight Council.

The CFPB announced that it was released a new tool to help consumers measure their financial well-being.

Federal Reserve Board (FRB)

The FRB has released a new website toolkit that will help individuals identify counterfeit currency.

The FRB released its Annual Report on Preserving Minority Depository Institutions.

Federal Deposit Insurance Corporation (FDIC)

The FDIC has posted the agenda for its December 15, 2015 open board meeting.

Financial Crimes Enforcement Network (FinCEN)

FinCEN announced that it has named Andrea Sharrin as the Association Director for its Policy Division. Sharrin will oversee FinCEN’s regulatory functions, including the drafting of BSA rules, clarifying guidance, and issuing regulatory rulings.

FinCEN issued FinCEN Notice 2015-1, which extends the FBAR filing requirement of some individual to 2017 and reminds institutions that other filings are still required to meet the June 2016 deadline. 

Federal Housing Administration (FHA)

The FHA announced its new loan limits for 2016.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of December 10, 2015. The last update prior to this was December 09, 2015.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance News.