Topic: Privacy
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Our bank received a subpoena requesting all documents “for any checking accounts in which the above named persons, whether jointly or individually or with any other person, may have an interest . . . .” This individual has a personal account and is an authorized signer on three LLC accounts. Are we required to provide information regarding the LLC accounts in addition to the personal account? Also, can we mail the notice of the subpoena to the individual on the same day we mail our subpoena response?
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Based on the information you have provided to us, it appears that the subpoena does not cover the LLC accounts (notwithstanding its overly broad language). Generally, a corporation’s assets are separate from an individual’s assets, even if that individual is an authorized signer on the LLC accounts. In our view, you are not required to…
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What is our bank’s responsibility when we have reason to believe that an elderly customer’s daughter may be abusing her access to her mother’s account? The daughter also may be violating her fiduciary duties as established in a Department of Veteran Affairs Fiduciary Agreement naming the elderly customer as the beneficiary of veteran benefits and the daughter as the fiduciary of the funds.
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If your bank suspects the financial exploitation of an elderly customer, state law encourages you to report the activity to the Illinois Department of Aging, and federal law may require you to file a suspicious activity report (SAR) if certain conditions are met. Under the law in Illinois, banks are permitted (but not required) to…
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For a home purchase loan, are we required to provide separate closing disclosures to the buyer and the seller? In the past, we provided both parties with the same HUD. Is that a best practice? Are there any privacy concerns? Can we also provide the Closing Disclosure to the realtor?
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No, we believe it would violate your customer’s privacy rights if your bank were to provide a full Closing Disclosure to the seller, unless your customer has consented to the disclosure. Alternatively, the TRID rules provide a modified Closing Disclosure form that redacts certain personal financial information of the buyer for purposes of providing to…
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We have a checking account that was owned by John Doe, payable on death to Jane Doe. When John died, the account never was part of his estate; the account passed directly to Jane. The executor of John’s estate has requested account records prior to the date of death. Does the executor have the right to see those account records?
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Yes, the executor may access bank account records up to the deceased accountholder’s date of death. The federal privacy regulations permit banks to disclose account information to “persons holding a legal or beneficial interest relating to the consumer” and a consumer’s representative, such as an executor. For resources related to our guidance, please see: Regulation…
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Does the 2015 amendment to the Gramm-Leach-Bliley Act (GLBA), eliminating the annual privacy notice requirement in certain circumstances, take precedence over Regulation P, which has not yet been amended to implement the change?
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Yes, the GLBA amendment takes precedence over Regulation P. Your primary regulator (the Federal Reserve Board) has adopted interagency examination procedures reflecting the GLBA amendment, and we expect that the CFPB eventually will finalize its proposed rules implementing the GLBA amendment in Regulation P. If your bank meets the requirements for the annual privacy notice…
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Is the bank holding company that owns our bank considered our “affiliate” under Regulation P? The holding company is our sole shareholder, with 100% ownership of our bank.
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Yes, the holding company that owns your bank is considered your affiliate under Regulation P. The rule defines “affiliate” as “any company that controls, is controlled by, or is under common control with another company.” Under the Bank Holding Company Act, a holding company controls a bank if it directly or indirectly or owns or…
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When we send out periodic statements, we include a notice that our privacy policy has not changed in the past year, that it is available on our website, and that it is available to be mailed on request. But what about customers who do not receive periodic statements (such as loan customers, cd holders, etc.)? Do we need to mail our annual privacy notice to those customers?
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No, under the FAST Act’s amendment of the Gramm-Leach-Bliley Act (GLBA), your bank is exempt from the annual privacy notice requirement for all customers, even those who do not receive periodic statements. The GLBA requires financial institutions to re-disclose their privacy policy annually, either by mailing a full annual privacy notice or through certain alternative…
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Our customer has a mortgage loan with us. Are there privacy concerns (or any other concerns) if we were to disclose past-due payment information to a third party who lives at the property and signed the mortgage but not the note?
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No, such a disclosure falls within certain exceptions to Regulation P’s privacy requirements. Regulation P permits banks to disclose account information to “persons holding a legal or beneficial interest relating to the consumer.” In this situation, the third party signed the mortgage, signifying his interest in the property that is the subject of your customer’s…
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The executor for a customer’s estate contacted us to request account records. The customer’s account has a surviving joint owner with a right of survivorship. Can we provide account records to the executor?
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Yes, the executor may access bank account records up to the date of death — but the executor would not have any right to information about the account after the date of death. The federal privacy regulations permit banks to disclose account information to “persons holding a legal or beneficial interest relating to the consumer”…
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We are hiring a third party vendor to print mailing labels for bank event flyer. Can we provide the list of names and addresses to the vendor for producing the labels, without violating our customers’ privacy? Our privacy policy states that we share customer information “for our marketing purposes — to offer our products and services to you.”
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Yes, you may share a list of customer names and addresses with your printer, provided that you enter into a written contract with the printer preventing it from misusing or losing your customers’ information. Regulation P permits a bank to share nonpublic personal information with a third party if the sharing is reflected in its…