Deadline for Implementing New Model Privacy Form Fast Approaching

Starting on January 1, 2011, "financial institutions" subject to the federal Gramm-Leach-Bliley Act (the "GLB Act") will have to use new model privacy forms if they want to take advantage of a "safe harbor" for compliance with requirements for providing initial and annual privacy notices to customers. The model privacy forms will replace the sample clauses associated with an existing safe harbor that expires at the end of 2010. As a result, organizations – ranging from banks to credit counseling agencies to payday lenders to travel agencies to debt collectors – will need to update their privacy notices in order to rely on the safe harbor.

Background

The privacy rules under Title V of the GLB Act, which became effective July 1, 2001, require "financial institutions" (including banks and nonbank companies that engage in "financial activities" such as lending, brokering, consumer loans, money transmission, providing financial advice or credit counseling, and other