The Consumer Financial Protection Bureau announced July 1 a proposal to implement recent Congressional legislation that allows financial institutions that meet certain requirements to be exempt from sending annual privacy notices to their customers.
The Gramm-Leach-Bliley Act generally requires that financial institutions send annual privacy notices to their customers. In December 2015, Congress amended the GLBA as part of the Fixing America’s Surface Transportation Act. The amendment provides financial institutions that meet certain conditions an exemption to the requirement under the GLBA to deliver an annual privacy notice. A financial institution can use the annual notice exception if it limits its sharing of customer information so that the customer does not have the right to opt out and has not changed its privacy notice from the one previously delivered to the customer. The proposed amendment would implement this legislation. The proposal also would establish deadlines for institutions resuming annual privacy notices if their practices change and cease to qualify for the exemption.
Comments on the proposal will be accepted for 30 days following publication in the Federal Register.
Emerging regulatory concerns
OCC report examines top risks facing financial institutions
The Office of the Comptroller of the Currency on July 11 released its Semiannual Risk Perspective for Spring 2016, which reports that strategic, credit, operational and compliance risks remain top concerns. Highlights specific to compliance and operations are:
• Operational risk concerns include increasing cyber threats, reliance on third-party service providers and resiliency planning.
• Banks face challenges meeting the integrated mortgage disclosure requirements and amended Military Lending Act regulatory requirements, the latter of which takes effect on Oct. 3, 2016. Other challenges include managing Bank Secrecy Act risks.
Other Industry Issues of Interest
FDIC announces Call Report revisions
The Federal Deposit Insurance Corporation on July 6 announced a number of changes that the Federal Financial Institutions Examination Council approved to the Consolidated Reports of Condition and Income (Call Report), as well as certain new and revised data items and instructional revisions. The revisions are subject to approval by the U.S. Office of Management and Budget, and will take effect Sept. 30 or on March 31, 2017.
OFAC announces $7.6 million fine against pharmaceutical company
The Office of Foreign Assets Control announced July 5 that Alcon Laboratories, Inc., Fort Worth, Texas, Alcon Pharmaceuticals Ltd., Fribourg, Switzerland, and Alcon Management, SA, Geneva, Switzerland (collectively, “Alcon”) have agreed to settle potential civil liability with OFAC in the amount of $7,617,150 for apparent violations of the Iranian Transactions and Sudanese Sanctions Regulations. An OFAC investigation found Alcon violated sanctions regulations on 513 occasions when it engaged in the sale and exportation of medical end-use surgical and pharmaceutical products from the U.S. to distributors located in Iran and Sudan without OFAC authorization.
OFAC adds to Cuba FAQs
On July 8, the Office of Foreign Assets Control updated its Cuba-related frequently asked questions to include questions about the use of the U.S. dollar in certain transactions.
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