The U.S. House passed a bill that would allow banks and financial institutions to post privacy policies online instead of mailing them to customers.
The Privacy Notification and Technical Clarification Act (H.R. 2396), sponsored by Rep. David Trott (R-MI), said financial institutions would not be required to send written versions of their annual privacy policies in the mail if they post those policies on the Internet and notify consumers on their monthly billing statement. If the privacy policy has changed, however, consumers would still receive written notifications, the legislation stated.
“When companies inundate individuals with pages and pages of legalese, the details are lost and the important information is hidden,” Trott said. “This critical legislation finally addresses the current avalanche of confusing notices consumers receive in the mail by modernizing the privacy notification process and improving transparency and accountability. This commonsense bill will cut down on the high compliance costs these companies are forced to pass along to consumers while increasing consumer access to important privacy information. I applaud my colleagues on the Financial Services Committee and the House for passing this bipartisan legislation and look forward to the Senate’s consideration of this important measure.”
The bill was previously approved by the Financial Services Committee by a vote of 40-20. It passed in the House 275-146
“The bill simply says if a financial institution does not change their privacy notification, they don’t have to send out a paper notification that creates more costs that gets passed on to the customer, that nobody reads in the first place,” Financial Services Committee Chairman Jeb Hensarling (R-TX) said. “We must vigilantly ensure that our constituents are receiving effective disclosure — not just voluminous disclosure, but effective disclosure — of material items written in clear, understandable, common language. No voluminous disclosure of irrelevant items written in legalese and fine print.”