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Federal financial regulators have made important, common sense improvements to the proposed financial privacy regulations, implementing a number of recommendations made by America’s Community Bankers. These regulations should be implemented and their effects evaluated before additional privacy legislation is enacted.

ACB particularly commends the regulators for giving financial institutions additional time to properly comply with the regulations by extending the implementation date to July 1, 2001. This is especially important to community banks, which rely on service bureaus for operational changes to their computer systems. The extra time will help banks and their customers. It’s much like banks’ partnership with outside companies in making their computers Year 2000 compliant.

ACB commends the regulators for helping banks develop their privacy policies by including sample disclosure language. In January, ACB provided its members with an interim model disclosure statement and urged bankers to prepare their own policies and disseminate them to customers — even before they were required to do so. ACB also provided members with a brochure for use in reassuring customers of the bank’s commitment to safeguarding financial data.

ACB applauds the regulators for addressing several operational issues, including:

• Clarifying that a borrower is subsequently a customer of the loan servicer for disclosure and opt-out purposes, not the investor in the loan.
  
• Allowing banks to provide a single, initial disclosure notice to a customer applying for multiple products and services during the year.