The Federal Trade Commission last week unveiled for public comment a series of proposed rules to protect the privacy of individual personal financial information under the Financial Services Modernization Act but made some key exceptions.
The FTC wants all comments before March 31.
The act, which overhauls the financial services industry — permits banks, financial institutions, insurance and securities firms to merge and offer competing products and services. But the act makes it tougher for financial institutions to share public and non-public customer information with each other and with unaffiliated third parties for marketing purposes.
Names, addresses, listed telephone numbers, sex, and marital status is considered public information while checking and credit card account numbers and credit reports are classified as non-public.
Both acts would require consumers and customers to annually receive understandable written notices of their privacy rights, including a way of opting out from having their personal information shared with affiliated or non-affiliated third parties, with certain exceptions.
The FTC would exempt nonaffiliated third parties that perform services for financial institutions, including the marketing of its own products or services or financial products or services offered by joint agreement between two or more financial institutions.
Under those circumstances individuals would not have the right to opt out from having certain information about them disclosed to a non-affiliated third party.
In addition, the FTC’s proposed rules would broaden the definition of a financial institution to include credit-issuing retailers, real estate appraisers, personal property appraisers, career counselors for people working in the financial industry, travel agencies operated in connection with financial services and computer hardware and software makers.
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