63120 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

DEPARTMENT OF THE TREASURY

Office of the Comptroller of the

Currency

12 CFR Part 41

[Docket No. 00–20]

RIN 1557–AB78

FEDERAL RESERVE SYSTEM

12 CFR Part 222

[Regulation V; Docket No. R–1082]

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 334

RIN 3064–AC35

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 571

[Docket No. 2000–81]

RIN 1550–AB33

Fair Credit Reporting Regulations

AGENCIES: Office of the Comptroller of

the Currency, Treasury (OCC); Board of

Governors of the Federal Reserve

System (Board); Federal Deposit

Insurance Corporation (FDIC); and

Office of Thrift Supervision, Treasury

(OTS).

ACTION: Joint notice of proposed

rulemaking.

SUMMARY: The OCC, Board, FDIC, and

OTS (Agencies) are publishing for

comment proposed regulations

implementing the provisions of the Fair

Credit Reporting Act (FCRA) that permit

institutions to communicate consumer

information to their affiliates (affiliate

information sharing) without incurring

the obligations of consumer reporting

agencies. These provisions authorize

institutions to communicate among

their affiliates: Information as to

transactions or experiences between the

consumer and the person making the

communication (transaction or

experience information); and ‘‘other’’

information (that is, information

covered by the FCRA but not transaction

or experience information), provided

that the institution has given notice to

the consumer that the other information

may be communicated, the institution

has provided the consumer an

opportunity to ‘‘opt out’’ (i.e., to direct

that the information not be

communicated), and the consumer has

not opted out. The proposed regulations

explain how to comply with the affiliate

information sharing provisions,

addressing such matters as the content

and delivery of the notice to consumers

that ‘‘other’’ information may be

communicated (opt out notice). The

proposed regulations also implement

certain related provisions. The Agencies

have attempted to conform these

proposed regulations to the final

regulations implementing the privacy

provisions of the Gramm-Leach-Bliley

Act whenever feasible.

DATES: Comments must be received by

December 4, 2000.

ADDRESSES: Comments should be

directed to:

OCC: Communications Division,

Office of the Comptroller of the

Currency, 250 E Street, SW.,

Washington, D.C. 20219, Attention:

Docket No. 00–20; FAX number (202)

874–5274 or Internet address:

regs.comments@occ.treas.gov.

Comments may be inspected and

photocopied at the OCC’s Public

Reference Room, 250 E Street, SW.,

Washington D.C. between 9:00 a.m. and

5:00 p.m. on business days. You can

make an appointment to inspect the

comments by calling (202) 874–5043.

Board: Comments, which should refer

to Docket No. R–1082, may be mailed to

Ms. Jennifer J. Johnson, Secretary, Board

of Governors of the Federal Reserve

System, 20th and C Streets, NW.,

Washington, D.C. 20551 or mailed

electronically to

regs.comments@federalreserve.gov.

Comments addressed to Ms. Johnson

also may be delivered to the Board’s

mail room between 8:45 a.m. and 5:15

p.m. and to the security control room

outside of those hours. Both the mail

room and the security control room are

accessible from the courtyard entrance

on 20th Street between Constitution

Avenue and C Street, NW. Comments

may be inspected in Room MP–500

between 9:00 a.m. and 5:00 p.m.,

pursuant to § 261.12, except as provided

in § 261.14, of the Board’s Rules

Regarding the Availability of

Information, 12 CFR 261.12 and 261.14.

FDIC: Send written comments to

Robert E. Feldman, Executive Secretary,

Attention: Comments/OES, Federal

Deposit Insurance Corporation, 550 17th

Street, NW., Washington, DC 20429.

Comments may be hand delivered to the

guard station at the rear of the 17th

Street building (located on F Street) on

business days between 7 a.m. and 5 p.m.

(FAX number (202) 898–3838).

Comments may be inspected and

photocopied in the FDIC Public

Information Center, Room 100, 801 17th

Street, NW., Washington, DC 20429,

between 9:00 a.m. and 4:30 p.m. on

business days.

Comments may be submitted to the

FDIC electronically over the Internet at

www.fdic.gov. Further information

concerning this option may be found

below at ‘‘FDIC’s Electronic Public

Comment Site.’’ Comments also may be

mailed electronically to

comments@fdic.gov.

OTS: Mail: Send comments to

Manager, Dissemination Branch,

Information Management and Services

Division, Office of Thrift Supervision,

1700 G Street, NW., Washington, DC

20552, Attention Docket No. 2000–81.

Delivery: Hand deliver comments to

the Guard’s Desk, East Lobby Entrance,

1700 G Street, NW., from 9:00 a.m. to

4:00 p.m. on business days, Attention

Docket No. 2000–81.

Facsimiles: Send facsimile

transmissions to FAX Number (202)

906–7755, Attention Docket No. 2000–

81; or (202) 906–6956 (if comments are

over 25 pages).

E-Mail: Send e-mails to

‘‘public.info@ots.treas.gov’’, Attention

Docket No. 2000–81, and include your

name and telephone number.

Public Inspection: Interested persons

may inspect comments at the Public

Reference Room, 1700 G St. N.W., from

10:00 a.m. until 4:00 p.m. on Tuesdays

and Thursdays or obtain comments and/

or an index of comments by facsimile by

telephoning the Public Reference Room

at (202) 906–5900 from 9:00 a.m. until

5:00 on business days. Comments and

the related index will also be posted on

the OTS Internet Site at

‘‘www.ots.treas.gov’’.

FOR FURTHER INFORMATION CONTACT:

OCC: Amy Friend, Assistant Chief

Counsel, (202) 874–5200; Michael

Bylsma, Director, Community and

Consumer Law, (202) 874–5750;

Stephen Van Meter, Senior Attorney,

Community and Consumer Law, (202)

874–5750; Carol Workman, Compliance

Specialist, Community and Consumer

Policy, (202) 874–4858; Deborah Katz,

Senior Attorney, Legislative and

Regulatory Activities Division, (202)

874–5090; or Jeffery Abrahamson,

Attorney, Enforcement and Compliance,

(202) 874–4800, Office of the

Comptroller of the Currency, 250 E

Street, SW., Washington, DC 20219.

Board: James H. Mann, Senior

Attorney, (202) 452–2412; or David A.

Stein, Attorney, (202) 452–3667,

Division of Consumer and Community

Affairs. For the hearing impaired only,

contact Janice Simms,

Telecommunications Device for the Deaf

(TDD) (202) 872–4984, Board of

Governors of the Federal Reserve

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63121

1The FCRA creates substantial obligations for

‘‘consumer reporting agencies.’’ FCRA, section

603(f); see, e.g., sections 607, 611. These obligations

include furnishing consumer reports only for

permissible purposes, maintaining high standards

for ensuring the accuracy of information in

consumer reports, resolving customer disputes, and

other matters.

System, 20th and C Streets, NW.,

Washington, DC 20551.

FDIC: James K. Baebel, Assistant

Director, Compliance Policy, Division of

Compliance and Consumer Affairs,

(202) 942–3086; Deanna Caldwell,

Community Affairs Officer, Division of

Compliance and Consumer Affairs,

(202) 736–0141; Nancy Schucker

Recchia, Counsel, Regulations and

Legislation Section, (202) 898–8885; A.

Ann Johnson, Counsel, Regulations and

Legislation Section, (202) 898–3573; and

David Lafleur, Senior Compliance

Examiner, (415) 395–5261, Federal

Deposit Insurance Corporation, 550 17th

Street, NW., Washington, DC 20429.

OTS: Christine Harrington, Counsel

(Banking and Finance), (202) 906–7957;

Paul Robin, Assistant Chief Counsel,

(202) 906–6648; or Elizabeth Baltierra,

Program Analyst, Compliance Policy

(202) 906–6540, Office of Thrift

Supervision, 1700 G Street, NW.,

Washington DC 20552.

SUPPLEMENTARY INFORMATION:

I. Background

The FCRA

The FCRA, enacted in 1970, sets

standards for the collection,

communication, and use of information

bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living. 15 U.S.C. 1681–1681u. In 1996,

the Consumer Credit Reporting Reform

Act amended the FCRA extensively

(1996 Amendments). Pub. L. 104–208,

110 Stat. 3009.

For many years, to avoid the

obligations of consumer reporting

agencies imposed by the FCRA, many

institutions avoided making any

communications to affiliated companies

of consumer information that could

constitute consumer reports.1 The 1996

Amendments, however, excluded

specified types of information sharing

with affiliates from the definition of

‘‘consumer report,’’ assuring institutions

that making these communications

would not expose them to the

obligations of consumer reporting

agencies. In particular, the 1996

Amendments excluded from the

definition of ‘‘consumer report’’ the

sharing of ‘‘other’’ information among

affiliates, so long as the consumer,

having been given notice and an

opportunity to opt out, did not opt out.

‘‘Other information’’ refers to

information that is covered by the FCRA

and that is not a report containing

information solely as to transactions or

experiences between the consumer and

the person making the report.

The 1996 Amendments prohibited the

Agencies from issuing implementing

regulations. 15 U.S.C. 1681s(a)(4)

(repealed). The Gramm-Leach-Bliley Act

(GLBA) repealed this prohibition and

directed the Agencies to prescribe

jointly such regulations as necessary to

carry out the purposes of the FCRA.

Pub. L. Sec. 506, 106–102, 15 U.S.C.

1681s(e).

Coordination With Privacy Regulations

The GLBA sets standards for financial

institutions’ disclosure of nonpublic

personal information to nonaffiliated

third parties (privacy provisions; Pub. L.

106–102, 15 U.S.C. 6802; see also 15

U.S.C. 6803). The Agencies published

final regulations implementing these

privacy provisions on June 1, 2000

(privacy regulations; 65 FR 35162, June

1, 2000).

The privacy regulations do not

‘‘modify, limit, or supersede the

operation of the Fair Credit Reporting

Act.’’ 15 U.S.C. 6806. Thus, both the

privacy regulations and the FCRA may

apply to an institution’s disclosure of

consumer information. Moreover, if a

financial institution provides an opt out

notice under the FCRA, that notice must

be included in certain notices mandated

by the privacy regulations, including

annual notices to customers. 15 U.S.C.

6803. Therefore, the Agencies anticipate

that financial institutions will design

their information-sharing policies and

practices taking into account both the

privacy regulations and the regulations

implementing the FCRA.

To ease compliance and promote

consistency, the Agencies are

conforming the two regulations where

appropriate. For example, the Agencies

are proposing requirements regarding

the content and delivery of the FCRA

opt out notice that are generally

consistent with the corresponding

provisions of the privacy regulations.

This Proposal and Future Agency

Issuances

The FCRA raises many significant

issues in addition to affiliate

information sharing. The Agencies are

analyzing these issues and expect to

address them in an Advance Notice of

Proposed Rulemaking. Additionally, the

Agencies will review a series of

questions and answers regarding the

FCRA (Qs & As) that the Agencies

(including the Federal Home Loan Bank

Board, predecessor of the OTS) issued

in 1971. These were designed to help

financial institutions develop a working

knowledge of the statute. The Agencies

will modify or withdraw any Qs & As

that are inconsistent with the FCRA or

obsolete.

II. Section-by-Section Analysis

Section l.1 Purpose and Scope

Proposed paragraph ll.1(a) briefly

describes the purpose of the regulations.

Proposed paragraph ll.1(b) briefly

describes the scope of the regulations,

including the information and

institutions subject to them. (These

institutions are identified in more detail

in proposed section ll.3(m) of the

Board, FDIC, and OTS regulations.)

Paragraph ll.1(b) also provides that

nothing in this part modifies, limits, or

supersedes the standards governing the

privacy of individually identifiable

health information promulgated by the

Secretary of Health and Human Services

pursuant to sections 262 and 264 of the

Health Insurance Portability and

Accountability Act (HIPAA) of 1996 (42

U.S.C. 1320d–1320d–8). Certain

institutions that possess medical

information about consumers may be

covered by these regulations, the GLBA

privacy regulations, and rules

promulgated by the Department of

Health and Human Services (HHS)

under the authority of sections 262 and

264 of HIPAA once those regulations are

finalized. Based on the proposed HIPAA

rules, it appears likely that there will be

areas of overlap between the HIPAA and

the FCRA affiliate information-sharing

rules. For instance under the HIPAA

proposal, consumers must provide

affirmative authorization before a

‘‘covered institution’’ or its ‘‘business

partner’’ may disclose medical

information in certain instances,

whereas under these proposed FCRA

affiliate information sharing rules,

institutions need only provide

consumers with the opportunity to opt

out of disclosures. In cases where the

HIPAA requires consumers to opt in

before certain information may be

shared, but this rule allows consumers

to opt out of the same sharing, opt in

would be necessary before the

information may be shared. The

Agencies will consult with HHS to

avoid the imposition of duplicative or

inconsistent requirements.

Section l.2 Examples

Proposed section l.2 clarifies that the

examples used in the regulations and in

the sample notice are not exclusive

means of compliance; rather, they are

63122 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

2Prior to the 1996 amendments to FCRA,

affiliated entities could not pool their transaction or

experience information in a common database

without being considered a consumer reporting

agency. Instead, each affiliate could disclose its

own transaction or experience information to

another affiliate directly only in the same manner

as an entity can disclose information to a

nonaffiliated third party. While transaction or

experience information has been excluded from the

definition of ‘‘consumer report’’ since the FCRA’s

initial passage, the 1996 amendments facilitated the

disclosure of such information among affiliates.

intended to provide guidance on how to

comply in specific situations.

The Agencies solicit comment on

whether to include additional or

different examples, and, more

fundamentally, on whether including

examples in the regulations is

appropriate and useful. Instead of

addressing specific fact situations

through such examples, the Agencies

could periodically issue interagency

staff commentaries or questions and

answers.

The Agencies note that an example

that mentions a particular activity does

not, by itself, authorize an institution to

engage in that activity. Any such

authority must have an independent

source.

Section l.3 Definitions

Discussed below are a few key

definitions, including: ‘‘affiliate’’ (as

well as the related terms ‘‘company’’

and ‘‘control’’); ‘‘clear and

conspicuous’’; ‘‘opt out’’; ‘‘opt out

information’’; and ‘‘consumer report.’’

The proposal tracks the statutory

language referring to ‘‘transaction or

experience information,’’ but does not

define that term.

Affiliate

Several FCRA provisions apply to

information sharing with persons

‘‘related by common ownership or

affiliated by corporate control,’’ ‘‘related

by common ownership or affiliated by

common corporate control,’’ or

‘‘affiliated by common ownership or

common corporate control.’’ E.g., FCRA,

sections 603(d)(2), 615(b)(2), and

624(b)(2). Proposed paragraph (b)

defines ‘‘affiliate’’ to refer to all these

relationships between and among

companies, and clarifies that ‘‘related or

affiliated by common ownership or

affiliated by corporate control or

common corporate control’’ means

controlling, controlled by, or under

common control with another company.

Consistent with the definitions in the

privacy regulations, the proposal uses a

definition of ‘‘control’’ that applies

exclusively to the control of a

‘‘company,’’ and defines ‘‘company’’ to

include any corporation, limited

liability company, business trust,

general or limited partnership,

association, or similar organization. See

proposed paragraphs (e) (‘‘company’’)

and (i) (‘‘control’’). The definition of

‘‘company’’ omits some entities that are

‘‘persons’’ under the FCRA—

individuals, estates, cooperatives,

governments, and governmental

subdivisions or agencies. The Agencies,

however, are not aware of any

circumstances where ‘‘control’’ could be

exercised over individuals, government

agencies, and other persons that do not

fit within the definition of ‘‘company.’’

Comment is solicited on whether the

proposed definition of ‘‘control’’ should

be expanded to apply to these

additional types of persons.

Clear and Conspicuous

Proposed paragraph (c) defines ‘‘clear

and conspicuous’’ to mean that a notice

must be reasonably understandable and

designed to call attention to the nature

and significance of the information it

contains. The proposed regulations do

not mandate the use of any particular

technique for making a notice clear and

conspicuous; instead, they give

institutions flexibility in determining

how to comply. An institution may

make its notice reasonably

understandable by, for example, using

short explanatory sentences or bullet

lists and avoiding legal or highly

technical business terminology

whenever possible. An institution may

design its notice to call attention to the

nature and significance of the

information in the notice by, for

example, using a plain-language

heading and a typeface and size that are

easy to read.

Paragraph (c) is consistent with the

‘‘clear and conspicuous’’ standard in the

privacy regulations. As such, it offers a

more detailed exposition of the standard

(particularly with respect to what makes

a notice ‘‘conspicuous’’) than some

other regulations, such as the Board’s

Regulation Z. However, laws other than

FCRA—for example, the Truth in

Lending Act—that require clear and

conspicuous disclosures, are beyond the

scope of this rulemaking. Accordingly,

the standard proposed here does not

affect disclosures required by those

laws.

The Agencies request comment on

whether institutions have any particular

concerns about compliance with FCRA’s

clear and conspicuous standard when

FCRA opt out notices are included with

the GLBA privacy provision notices.

Consumer Report

Proposed paragraph (g) parallels the

definition in section 603(d) of the

FCRA. Paragraph (g)(2)(ii) excludes from

the definition of ‘‘consumer report’’

communication among affiliates of a

report containing information solely as

to transactions or experiences between

the consumer and the person making

the report.2

Paragraph (g)(2)(iii) excludes any

communication of ‘‘opt out

information’’ if the conditions set out in

sections l.4–l.9 are satisfied. The

FCRA, as explained above, uses the term

‘‘other information’’ to refer to

information that it covers but that is not

transaction or experience information.

This proposal refers to ‘‘other

information’’ using the more descriptive

term ‘‘opt out information.’’ See

proposed paragraph (k).

Opt Out

Proposed paragraph (j) defines this

term to mean a direction by a consumer

that an institution not communicate opt

out information about the consumer to

one or more of the institution’s

affiliates.

Opt Out Information

As described above, the 1996

Amendments to FCRA excluded from

the definition of ‘‘consumer report’’ the

sharing of ‘‘other information’’ among

affiliates, so long as the consumer,

having been given notice and an

opportunity to opt out, did not opt out.

‘‘Other information’’ refers to

information that is covered by the FCRA

and that is not a report containing

information solely as to transactions or

experiences between the consumer and

the person making the report. The

proposed regulation uses the term ‘‘opt

out information’’ to describe this

category of information.

Proposed paragraph (k) defines opt

out information as information that (i)

bears on a consumer’s credit worthiness,

credit standing, credit capacity,

character, general reputation, personal

characteristics, or mode of living, (ii) is

used or expected to be used or collected

for one of the permissible purposes

listed in FCRA (e.g., credit transaction,

insurance underwriting, employment

purposes), and (iii) is not solely

transaction or experience information.

Section ll.5(d) gives examples of

categories of information that qualify as

opt out information.

Section l.4 Communication of Opt

Out Information to Affiliates

Proposed section l.4 describes the

conditions that an institution must meet

to ensure that its communication of opt

out information to its affiliates do not

constitute consumer reports including

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63123

the requirement that the institution

provide an opt out notice.

Section 603(d)(2)(A)(iii) of the FCRA

excludes from the definition of

‘‘consumer report’’ the sharing of opt

out information among affiliates if:

it is clearly and conspicuously disclosed to

the consumer that the information may be

communicated among such persons and the

consumer is given the opportunity, before the

time that the information is initially

communicated, to direct that such

information not be communicated among

such persons * * *.

Proposed section ll.4 accordingly

provides that opt out information may

be communicated among affiliates

without the communication being a

consumer report if: (i) The institution

has provided an opt out notice; (ii) the

institution has given the consumer a

reasonable opportunity and means,

before the time that it communicates the

information, to opt out; and (iii) the

consumer has not opted out.

Mergers & Acquisitions

In a merger or acquisition situation,

the need to provide new opt out notices

to the customers of the entity that ceases

to exist will depend on whether the

notices previously given to those

customers accurately reflect the policies

and practices of the surviving entity. If

they do, the surviving entity will not be

required under the rule to provide new

notices.

Section l.5 Contents of Opt Out

Notice

Proposed paragraph (a) provides that

an opt out notice must be clear and

conspicuous, and must accurately

explain: (i) The categories of opt out

information about the consumer that the

institution communicates; (ii) the

categories of affiliates to which the

institution communicates the

information; (iii) the consumer’s ability

to opt out; and (iv) the means to do so.

The Agencies invite comment on

whether financial institutions should

also have to disclose in their FCRA

notices how long a consumer has to

respond to the opt out notice before the

institution may begin disclosing

information about that consumer to its

affiliates, as well as the fact that a

consumer can opt out at any time. These

disclosures are not required in the

privacy regulations. The Agencies seek

comment on whether the benefits of the

additional disclosures would outweigh

the burdens, and, if so, whether the

regulation should require the

disclosures to state that a financial

institution will wait 30 days in every

instance before sharing consumer

information with affiliates (see proposed

section l.6, below, for additional

discussion on reasonable opportunity to

opt out).

Proposed paragraph (b) clarifies that

an institution’s notice may describe not

only the communications of opt out

information that the institution

currently plans to make to its affiliates,

but also the communications that it

reserves the right to make in the future.

Proposed paragraph (c) explains that an

institution may, but need not, provide

the consumer with the option of an opt

out that covers only part of the

information or certain affiliates. This

would enable an institution to give

consumers a menu of opt out choices if

it desires to do so.

Paragraph (d) explains how an

institution can satisfy the requirement

that it categorize the opt out information

that it communicates. Paragraph (d)(2)

gives examples of categories of opt out

information, such as information from a

consumer’s application, information

from a consumer report, information

obtained by verifying representations

made by a consumer, and information

provided by another person regarding

that person’s relationship with a

consumer. The first two categories

reflect the legislative history of the 1996

Amendments, which states in part that

the opt out provision ‘‘will clarify that

affiliates within a Holding Company

structure can share any application

information * * * and consumer

reports, consistent with the FCRA.’’ S.

Rep. No. 185, 104th Cong., 1st Sess. 18–

19 (1995). The other two categories

represent information that the Agencies

believe does not constitute transaction

or experience information when

communicated by the institution that

has received it. Paragraph (d)(3) gives a

non-exclusive list of examples of

specific items of opt out information

within each category, including a

consumer’s income, credit score or

credit history, open lines of credit,

employment history, marital status and

medical history.

Medical data are especially sensitive

for many consumers; if such data are

among the opt out information that an

institution communicates to its

affiliates, the institution satisfies the

requirement to categorize that

information only if it includes examples

of medical data that it intends to share.

The Agencies note that the items listed

in paragraph (d)(3) as examples of

information that would be included

within the categories of opt out

information are illustrative only. Those

items would not be considered opt out

information in cases where the

information is obtained from a source

other than those listed in paragraph

(d)(2). Comment is requested as to the

appropriateness of these examples of

categories and items of opt out

information, and whether additional or

different examples should be used.

The descriptions of the categories of

information set out in proposed

paragraph (d)(2) differ somewhat from

those in section l.6(c)(2) of the privacy

regulations. The agencies solicit

comment on the extent to which the

categories in (d)(2) can be treated as

consistent with similar categories in the

privacy regulations (such as disclosures

of information from consumer reporting

agencies) in order to reduce compliance

burden and consumer confusion.

Proposed paragraph (e) explains how

an institution can satisfy the

requirement that it categorize the

affiliates to which it communicates opt

out information.

Paragraph (f) cross-references the

sample notice in appendix A, which

presents a further illustration of the

content of an opt out notice.

Section l .6 Reasonable Opportunity

to Opt Out

Proposed paragraph (a) of section

ll .6 states that financial institutions

will provide a reasonable opportunity to

opt out by providing a reasonable period

of time for the consumer to opt out from

the time that notice is delivered.

Proposed paragraph (b) sets out

examples of what is a reasonable period

of time when notices are provided in

person, by mail, or by electronic means.

Comment is requested on whether there

are other situations that would suggest

a different reasonable period of time

that the Agencies should note by

example. Proposed paragraph (c)

explains that a consumer may opt out at

any time.

Section l .7 Reasonable Means of

Opting Out

Proposed paragraph (a) sets forth the

general rule that an institution provides

a reasonable means of opting out if it

provides a reasonably convenient

method to the consumer to opt out.

Examples of reasonable means of opting

out and unreasonable means are set out

in proposed paragraphs (b) and (c),

respectively. Proposed paragraph (d)

permits an institution to require each

consumer to opt out through a specific

means, as long as that means is

reasonable for that consumer.

Section l .8 Delivery of Opt Out

Notices

Proposed paragraph (a) provides that

an institution must deliver an opt out

notice so that each consumer can

reasonably be expected to receive actual

63124 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

3Congress recently enacted the E-Sign Act, Pub.

L. 106–229, which addresses the use of electronic

records and signatures for interstate and foreign

commerce. This legislation contains general rules

governing the use of electronic records for

providing required information to consumers (such

as disclosures and acknowledgments required by

the GLBA). The legal requirement that consumer

disclosures be in writing may be satisfied by an

electronic record if the consumer affirmatively

consents and certain other requirements of the ESign Act are met.

notice. As indicated by the examples

provided in proposed paragraph (b), this

is a lesser standard than actual notice.

For instance, if an institution mails a

printed copy of its notice to the last

known mailing address of an existing

customer, the institution has met its

obligation even if the customer has

changed addresses and never receives

the notice.

An institution may give notice in

writing or, if the consumer agrees,

electronically. For example, the

institution may e-mail its notice to a

customer that conducts electronic

transactions and has agreed to receive

electronic notice. The Agencies invite

comment on whether and how the

proposed rules governing

communications between a financial

institution and a consumer via an

electronic medium should be modified

in light of the Electronic Signatures in

Global and National Commerce Act (the

E-Sign Act).3

Proposed paragraph (c) explains that

oral notice alone does not comply with

the notice requirement; however, oral

notice may be provided in conjunction

with appropriate written or electronic

notice.

Proposed paragraph (d) explains that

an institution must provide the notice

so that the consumer can retain it or

obtain it at a later time, and gives

examples of retention or accessibility.

Proposed paragraph (e) permits an

institution to provide a joint opt out

notice with one or more of its affiliates

that are identified in the notice, as long

as the notice is accurate with respect to

each entity jointly issuing the notice.

Proposed paragraph (f)(1) sets out

rules that apply, notwithstanding any

other provision of the regulations, when

two or more consumers jointly obtain a

product or service from an institution

(referred to in the proposed regulation

as joint consumers), such as a joint

checking account. For example, an

institution may provide a single opt out

notice to joint accountholders. The

notice must indicate whether the

institution will consider an opt out by

a joint accountholder as an opt out by

all of the associated accountholders, or

whether each accountholder may opt

out separately. The institution may not

require all accountholders to opt out

before honoring an opt out direction by

one of the joint accountholders.

Paragraph (f)(2) gives examples of these

rules.

Section l .9 Revised Opt Out Notice

Proposed section ll .9 addresses the

situation in which an institution has

provided a consumer with one or more

opt out notices but later decides to

communicate opt out information to its

affiliates other than described in those

notices. It explains that an institution

must send a revised opt out notice that

complies with section ll .4, including

providing a reasonable means and

opportunity to opt out, and

communicating the information only if

the consumer has not opted out.

Section l .10 Time by Which Opt Out

Must be Honored

Proposed section ll .10 explains

that if an institution provides a

consumer with an opt out notice, and

the consumer opts out, the institution

must comply as soon as reasonably

practicable after receiving the

consumer’s direction. Comment is

solicited on whether the Agencies

should establish a fixed number of

days—for example, 30 days—that would

be deemed a ‘‘reasonably practicable’’

period of time for complying with a

consumer’s opt out direction.

Section l.11 Duration of Opt Out

Proposed section ll.11 provides

that an opt out continues to apply to the

information and affiliates described in

the applicable opt out notice until

revoked by the consumer in writing, or

if the consumer agrees, electronically, as

long as the consumer continues to have

a relationship with the institution. If the

consumer’s relationship with the

institution terminates, the opt out will

continue to apply to this information.

However, a new notice and opportunity

to opt out must be provided if the

consumer establishes a new relationship

with the institution.

Section l .12 Prohibition Against

Discrimination

Proposed paragraph (a) reminds

institutions that they may not

‘‘discriminate against’’ a consumer who

is an ‘‘applicant’’ for credit because the

applicant opts out. The source of this

prohibition is the Equal Credit

Opportunity Act (ECOA; 15 U.S.C. 1691

et seq.), which bars discrimination on a

prohibited basis in any aspect of a credit

transaction; one prohibited basis is

exercising a right under the Consumer

Credit Protection Act, which includes

the FCRA. Proposed paragraph (b)

provides examples of prohibited

discrimination against an applicant.

Paragraph (c) notes that the terms

‘‘applicant’’ and ‘‘discriminate against’’

have the meaning ascribed to these

terms in 12 CFR part 202.

Appendix A

Appendix A, which is part of these

regulations, contains a sample notice,

part or all of which may be used to

facilitate compliance with the notice

requirements. Although use of the

sample notice is not required,

institutions using it properly to provide

notices will be deemed to be in

compliance.

The Agencies solicit comment on all

aspects of the proposed regulations,

including but not limited to those

highlighted above.

III. FDIC’s Electronic Public Comment

Site

The FDIC has included a page on its

web site to facilitate the submission of

electronic comments in response to this

general solicitation (the EPC site). The

EPC site provides an alternative to the

written letter and may be a more

convenient way for you to submit your

comments. Commenting through the

EPC site will assist the FDIC to more

accurately and efficiently analyze

comments submitted electronically. If

you submit your comments through the

EPC site your comments will receive the

same consideration that they would

receive if submitted in hard copy to the

FDIC’s street address. Information

provided through the EPC site will be

used by the FDIC only to assist in its

analysis of the proposed regulation. The

FDIC will not use an individual’s name

or any other personal identifier of an

individual to retrieve records or

information submitted through the EPC

site. Like comments submitted in hard

copy to the FDIC’s street address, EPC

site comments will be made available in

their entirety (including the

commenter’s name and address if the

commenter chooses to provide them) for

public inspection.

The EPC site will be available on the

FDIC’s home page at http://

www.fdic.gov. You will be able to

provide comments directly on any of the

sections of the proposed regulation as

well as the specific questions that have

been asked in the preceding

Supplementary Information section.

You will also be able to view the

regulation and Supplementary

Information sections that related to your

comments directly on the site. Because

the GLBA authorizes promulgation of

this regulation, the FDIC encourages you

to provide written comments in the

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63125

spaces provided. Written comments

enable the FDIC to thoughtfully

consider possible changes to the

proposed regulation.

The FDIC is also interested in your

feedback on the EPC site. We have

provided a space for you to comment on

the site itself. Answers to this question

will help the FDIC to evaluate the EPC

site for use in future rulemaking.

At the conclusion of the EPC site you

will have an opportunity to provide us

with your name, indicate whether you

are an individual, insured depository

institution, financial holding company,

community-based organization, trade

association, government agency, or

other, and provide the name of the

organization you represent, if

applicable. Whether you choose to

respond to these questions is entirely up

to you. Any responses received may

help the FDIC to better understand the

public comments it receives.

IV. Regulatory Analysis

Paperwork Reduction Act

The Agencies invite comment on: (1)

Whether the collections of information

contained in this notice of proposed

rulemaking are necessary for the proper

performance of each Agency’s functions,

including whether the information has

practical utility; (2) the accuracy of each

Agency’s estimate of the burden of the

proposed information collections; (3)

ways to enhance the quality, utility, and

clarity of the information to be

collected; (4) ways to minimize the

burden of the information collections on

respondents, including the use of

automated collection techniques or

other forms of information technology;

and (5) estimates of capital or start-up

costs and costs of operation,

maintenance, and purchases of services

to provide information. No person is

required to respond to these collections

of information unless the collections

display a currently valid Office of

Management and Budget (OMB) control

number. The Agencies are currently

requesting their respective control

numbers for these information

collections from OMB.

This proposed regulation contains

disclosure requirements for certain

financial institutions and their affiliates.

A financial institution that (a) has

affiliates, (b) does not wish to be

considered a consumer reporting

agency, and (c) wishes to share

consumer information (other than

transaction and experience information)

with its affiliates, must prepare and

provide a notice to all its consumers

advising them of their opportunity to

opt out of information sharing with

companies in the institution’s corporate

family. 12 CFR ll .4. If a financial

institution wishes to share information

in a way that is inconsistent with

notices previously given to consumers,

the institution must provide consumers

with revised notices. 12 CFR ll .11.

The proposed regulation also contains

consumer reporting provisions. In order

for consumers to opt out, they must

respond to the institution’s opt out

notices. 12 CFR ll .7. At any time

during their continued relationship with

the institution, consumers have the right

to change or update their opt out status

with the institution. 12 CFR ll .10.

FCRA was amended to include

disclosure and opt out provisions in

1996, but the Agencies were prohibited

from issuing implementing regulations

until 1999. Thus, the collections of

information contained in this proposed

rule are not new requirements. During

the past three years, financial

institutions have developed systems,

policies, and procedures to bring

themselves into compliance with the

1996 FCRA amendments. In estimating

the burden associated with the

collections of information in this

proposed regulation, the Agencies took

into account the fact that FCRA-related

disclosure and opt out requirements

have already become a usual and

customary practice for covered

institutions. However, because the

proposed rule is more explicit and

detailed than the statute, some

institutions may need to revise their

disclosure policies or their notices, and

consumers may need to respond to the

revised notices. The burden associated

with these changes to current practice is

represented in the estimates below. In

estimating burden, the Agencies also

assumed that if a financial institution

provides an opt out notice under the

FCRA, that notice must be included in

certain notices mandated by the GLBA

privacy provisions, and will not be sent

out separately. The collection of

information requirements contained in

this notice of proposed rulemaking will

be submitted to the Office of

Management and Budget for review in

accordance with the Paperwork

Reduction Act of 1995 (44 U.S.C. 3507).

The estimated number of bank

respondents includes the total

institutions supervised by each of the

Agencies that have certain affiliate

relationships. The requirements of the

regulation only apply to institutions that

share opt out information with affiliates

that do not wish to be consumer

reporting agencies; therefore, the

Agencies cannot currently predict with

certainty how many of these institutions

will be subject to the rule. The analysis

assumes that all institutions with

certain affiliates will in fact, choose to

share opt out information and thus be

subject to the rule.

The estimated number of consumers

who will receive opt out notices is the

sum of deposit and loan consumers, and

is derived from data in Board consumer

studies. Each Agency’s share of the total

number of consumers is based on the

share of total deposits, and consumer

and mortgage loans, held by institutions

supervised by the Agencies. Because

OTS collects different information about

consumer loans than the other Agencies,

OTS estimated the number of thrift

borrowers by dividing total consumer

loans outstanding by the average

balance, for different types of consumer

loans. The analysis assumes that

institutions will provide separate opt

out notices based on product lines such

as loans and deposit accounts, rather

than single, combined notices covering

all of the various relationships a

consumer may have with the institution.

The Agencies seek comment as to

whether institutions would likely send

separate or combined notices.

OCC: Comments on the collections of

information should be sent to the Office

of Management and Budget, Paperwork

Reduction Project (1557—to be

assigned), Washington, DC 20503, with

copies to Jessie Dunaway, Legislative

and Regulatory Activities Division

(1557—to be assigned), Office of the

Comptroller of the Currency, 250 E

Street, SW, Washington, DC 20219. The

likely respondents are national banks

that do not wish to be considered

consumer reporting agencies, but want

to share information (other than

transaction or experience information)

with their affiliates.

Estimated number of bank

respondents: 737.

Estimated average annual burden

hours per bank respondent: 8 hours.

Estimated number of consumer

respondents: 94,238,000.

Estimated average annual burden

hours per consumer respondent: 5

minutes.

Estimated total annual reporting

burden: 7,855,921 hours.

The number of consumer respondents

provided by the OCC represents a

conservative estimate based upon the

total number of consumers who will

receive an opt out notice. The OCC is

using these conservative estimates

because it lacks more precise data on

the number of consumers who will

exercise their opt out rights. The OCC

expects that the actual number of

consumer respondents will be lower

than the estimate provided above, and

invites comment on the number of

63126 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

consumers who will respond to the

FCRA opt out notices.

Board: In accordance with the

Paperwork Reduction Act of 1995 (44

U.S.C. 3506; 5 CFR 1320, appendix A.1),

the Board reviewed the notice of

proposed rulemaking under the

authority delegated to the Board by the

OMB. Comments on the collections of

information should be sent to Mary M.

West, Federal Reserve Board Clearance

Officer, Mail Stop 97, Board of

Governors of the Federal Reserve

System, Washington, DC 20551, with a

copy to the Office of Management and

Budget, Paperwork Reduction Project

(7100—to be assigned), Washington, DC

20503. The likely respondents are

member banks of the Federal Reserve

System (other than national banks),

branches and agencies of foreign banks

(other than Federal branches, Federal

agencies, and insured State branches of

foreign banks), commercial lending

companies owned or controlled by

foreign banks, and organizations

operating under section 25 or 25A of the

Federal Reserve Act, that do want to

share information (other than

transaction or experience information)

with their affiliates.

Estimated number of bank

respondents: 996.

Estimated average annual burden

hours per bank respondent: 8 hours.

Estimated number of consumer

respondents: 39,251,000.

Estimated average annual burden

hours per consumer respondent: five

minutes.

Estimated total annual reporting

burden: 3,278,885 hours.

FDIC: Comments on the collections of

information should be sent to Steven F.

Hanft, Office of the Executive Secretary,

Federal Deposit Insurance Corporation,

550 17th Street, NW., Washington, DC

20429, with a copy to the Office of

Management and Budget, Paperwork

Reduction Project (3064—to be

assigned), Washington, DC 20503. The

likely respondents are insured

nonmember banks with affiliates, that

do not wish to be considered consumer

reporting agencies, and do want to share

information (other than transaction or

experience information) with their

affiliates.

Estimated number of bank

respondents: 1,640.

Estimated average annual burden

hours per bank respondent: 8 hours.

Estimated number of consumer

respondents: 24,445,000.

Estimated average annual burden

hours per consumer respondent: five

minutes.

Estimated total annual reporting

burden: 2,049,389 hours.

OTS: Comments on the collection of

information should be sent to the

Dissemination Branch (1550—to be

assigned), Office of Thrift Supervision,

1700 G Street, NW, Washington, DC

20552, with a copy to the Office of

Management and Budget, Paperwork

Reduction Project (1550—to be

assigned), Washington, DC 20503. The

likely respondents are savings

associations with affiliates that do not

wish to be considered consumer

reporting agencies, and do want to share

information (other than transaction or

experience information) with their

affiliates, and consumers.

Estimated number of thrift

respondents: 762.

Estimated average annual burden

hours per thrift respondent: 8 hours.

Estimated number of consumer

respondents: 49,925,225.

Estimated average annual burden

hours per consumer respondent: .0833

hours (5 minutes).

Estimated total annual reporting

burden: 4,164,867 hours.

Regulatory Flexibility Act

OCC: Pursuant to section 605(b) of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.), the OCC certifies that this

proposal will not have a significant

economic impact on a substantial

number of small entities. Financial

institutions have had to notify their

consumers of the right to opt out of

affiliate sharing of certain information

since 1997. This rulemaking provides

guidance to national banks concerning

how they may comply with the statutory

requirements, but requires no new type

of disclosure or opt out system. While

existing forms may need to be modified,

these modifications are unlikely to

result in a significant economic impact

on a substantial number of small

entities.

In addition, some of the requirements

in the proposed rule have been designed

to correspond to the requirements of the

privacy regulations. For example, under

both regulations, financial institutions,

in certain circumstances, must deliver

notices to consumers and to provide

consumers an opportunity to opt out of

certain information disclosures. This

proposed rule would allow financial

institutions to combine into one notice

the notice they must deliver under

FCRA and the notice that they must

deliver under the privacy regulations.

Also, institutions may combine their

consumers’ opt out responses into one

opt out response. By combining the

notices they deliver and the opt out

responses they process, financial

institutions will not need to produce

additional notices or to process

additional opt out responses under this

rule. Because the proposed rule is

designed to minimize FCRA’s burden on

financial institutions, and because the

FCRA requirements have been effective

since 1997, the OCC believes that this

proposed rule will not have a significant

economic impact on a substantial

number of small entities. For these

reasons, a regulatory flexibility analysis

is not required.

Board: Pursuant to section 605(b) of

the Regulatory Flexibility Act (5 U.S.C.

601 et seq.), the Board certifies that the

proposed rule will not have a significant

economic impact on a substantial

number of small entities. As further

discussed below, the proposed rule

implements law that has been in effect

for some time, corresponds as much as

feasible to the requirements of the

Board’s Regulation P, would allow

institutions to combine privacy and

FCRA notices to consumers, and would

allow institutions to combine

consumers’ responses to those notices.

Accordingly, a regulatory flexibility

analysis is not required.

Since 1997, the FCRA has provided

that the term ‘‘consumer report’’ does

not include any communication of other

information (meaning information that

is not transaction or experience

information) among persons related by

common ownership or affiliated by

corporate control, if it is clearly and

conspicuously disclosed to the

consumer that the information may be

communicated among such persons and

the consumer is given the opportunity,

before the time that the information is

initially communicated, to direct that

such information not be communicated

among such persons. The proposed

regulations would implement this

provision and would provide guidance

to certain Board-regulated institutions

on how to comply, but would not

substantively change existing law. No

new type of disclosure or opt-out system

would be required. While existing forms

may need to be modified, these

modifications are unlikely to result in a

significant economic impact on a

substantial number of small entities.

Additionally, the proposed rule is

designed to correspond as much as

feasible to the requirements of

Regulation P, which governs the privacy

of consumer financial information. Both

regulations implement statutory

provisions for the delivery of

information-sharing opt out notices to

consumers. The proposed rule would

facilitate compliance by financial

institutions with the requirement to

provide privacy notices and the use of

opt out notices under the FCRA by

allowing the two notices to be combined

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63127

in a single notice. Similarly, institutions

would be allowed to combine their

consumers’ opt out responses in a single

opt out response. By choosing to

combine the notices they deliver and

the opt out responses they process,

financial institutions will not need to

produce additional notices or to process

additional opt out responses under this

rule. For these reasons, a regulatory

flexibility analysis is not required.

FDIC: Pursuant to section 605(b) of

the Regulatory Flexibility Act (5 U.S.C.

601 et seq.), the FDIC certifies that the

proposed rule will not have a significant

economic impact on a substantial

number of small entities. This

conclusion is based on the following

facts. The FCRA has required financial

institutions to notify their consumers of

the right to opt out of affiliate sharing

of certain information since 1997.

However, prior to the GLBA, the

Agencies had no authority to issue rules

to provide financial institutions with

guidance to comply with the FCRA

requirements. This proposed

rulemaking does not substantively

change the existing statutory

requirements, but rather provides

guidance to financial institutions that

should minimize any burden associated

with complying with the subject FCRA

information sharing provisions. This

proposal requires no new type of

disclosure or opt out system. While

existing forms may need to be modified,

these modifications are unlikely to

result in a significant economic impact

on a substantial number of small

entities. The Agencies have attempted to

minimize any such economic impact by

including a sample notice, part or all of

which may be used to facilitate

compliance with the notice

requirements.

Further, this proposed rule is

designed to be consistent with the

requirements of the regulation

governing the privacy of consumer

financial information. Both rules

implement statutory requirements for

financial institutions, in certain

circumstances, to deliver notices to

consumers and to provide consumers an

opportunity to opt out of certain

information disclosures. The Agencies

have made the FCRA notice guidance

parallel to the privacy rule

requirements, thus facilitating the

delivery of a single notice to consumers.

Similarly, institutions may combine

their consumers’ opt out responses into

one opt out response. By combining the

notices they deliver and the opt out

responses they process, financial

institutions will not need to produce

additional notices or to process

additional opt out responses under this

rule.

For the above reasons, the FDIC

believes that this proposed rule will not

have a significant economic impact on

a substantial number of small entities,

and a regulatory flexibility analysis is

not required.

OTS: Pursuant to section 605(b) of the

Regulatory Flexibility Act (5 U.S.C. 601

et seq.), the Director of OTS certifies

that this proposed rulemaking would

not have a significant economic impact

on a substantial number of small

entities. The FCRA has required thrifts

to notify their consumers of the right to

opt out of affiliate sharing of certain

information since 1997. However, prior

to GLBA, OTS did not have authority to

issue rules to provide thrifts with

guidance to comply with the FCRA.

This proposed rulemaking does not

substantively change or add to the

existing statutory requirements. It

merely provides thrifts with guidance to

help minimize any burden associated

with complying with the FCRA

information sharing provisions. This

proposal requires no new type of

disclosure or opt out system. While

existing forms may need to be modified,

these modifications are unlikely to

result in a significant economic impact

on a substantial number of small

entities. The Agencies have attempted to

minimize any such economic impact by

including a sample notice, part or all of

which thrifts may use to facilitate the

notice requirements.

Further, this proposed rule is

designed to be consistent with the

requirements of the regulation

governing the privacy of consumer

financial information, 12 CFR part 573.

Both rules implement statutory

requirements for financial institutions,

in certain circumstances, to deliver

notices to consumers and to provide

consumers an opportunity to opt out of

certain information disclosures. The

Agencies have made the FCRA notice

guidance parallel to the privacy rule

requirements, thus facilitating the

delivery of a single notice to consumers.

Similarly, institutions may combine a

consumer’s opt out responses into one

opt out response. By combining the

notices they deliver and the opt out

responses they process, financial

institutions will not need to produce

additional notices or to process

additional opt out responses under this

rule. For these reasons, a regulatory

flexibility analysis is not required.

OCC and OTS Executive Order 12866

Determination

The OCC and OTS each has

determined that its portion of the

proposed rulemaking is not a significant

regulatory action under Executive Order

12866.

OCC and OTS Unfunded Mandates

Reform Act of 1995 Determination

Section 202 of the Unfunded

Mandates Reform Act of 1995, 2 U.S.C.

1532 (Unfunded Mandates Act) requires

that an agency prepare a budgetary

impact statement before promulgating a

rule that includes a Federal mandate

that may result in expenditure by State,

local, and tribal governments, in the

aggregate, or by the private sector, of

$100 million or more in any one year.

If a budgetary impact statement is

required, section 205 of the Unfunded

Mandates Act also requires an agency to

identify and consider a reasonable

number of regulatory alternatives before

promulgating a rule. The OCC and OTS

each has determined that this proposed

rule will not result in expenditures by

State, local, and tribal governments, or

by the private sector, of $100 million or

more. Accordingly, neither the OCC nor

the OTS has prepared a budgetary

impact statement or specifically

addressed the regulatory alternatives

considered.

V. Solicitation of Comments on Use of

Plain Language

Section 722 of the GLBA requires the

Federal banking agencies to use plain

language in all proposed and final rules

published after January 1, 2000. We

invite your comments on how to make

this proposed rule easier to understand.

For example:

• Have we organized the material to

suit your needs? If not, how could this

material be better organized?

• Are the requirements in the rule

clearly stated? If not, how could the rule

be more clearly stated?

• Do the regulations contain technical

language or jargon that is not clear? If

so, which language requires

clarification?

• Would a different format (grouping

and order of sections, use of headings,

paragraphing) make the regulation

easier to understand? If so, what

changes to the format would make the

regulation easier to understand?

• Would more, but shorter, sections

be better? If so, which sections should

be changed?

• What else could we do to make the

regulation easier to understand?

The Agencies solicit comment on

whether the inclusion of examples in

the regulation is appropriate. Elevating

the fact patterns to safe harbors in the

rule may generate certain problems over

time. For example, changes in

technology or practices may ultimately

63128 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

impact the fact patterns contained in the

examples and require changes to the

regulation. Are there alternative

methods to offer illustrative guidance of

the concepts portrayed by the examples?

List of Subjects

12 CFR Part 41

Banks, banking, Credit, National

banks, Reporting and recordkeeping

requirements.

12 CFR Part 222

Banks, banking, Credit, Federal

Reserve System, Reporting and

recordkeeping requirements, State

member banks.

12 CFR Part 334

Banks, banking, Credit, Reporting and

recordkeeping requirements.

12 CFR Part 571

Credit, Privacy, Reporting and

recordkeeping requirements, Savings

associations.

Office of the Comptroller of the

Currency

12 CFR Chapter I

Authority and Issuance

For the reasons set forth in the joint

preamble, the OCC proposes to amend

chapter I of title 12 of the Code of

Federal Regulations by adding a new

part 41 to read as follows:

PART 41—FAIR CREDIT REPORTING

Sec.

41.1 Purpose and scope.

41.2 Examples.

41.3 Definitions.

41.4 Communication of opt out information

to affiliates.

41.5 Contents of opt out notice.

41.6 Reasonable opportunity to opt out.

41.7 Reasonable means of opting out.

41.8 Delivery of opt out notices.

41.9 Revised opt out notice.

41.10 Time by which opt out must be

honored.

41.11 Duration of opt out.

41.12 Prohibition against discrimination.

Appendix A to Part 41—Sample Notice

Authority: 12 U.S.C. 93a; 15 U.S.C. 1681s.

§ 41.1 Purpose and scope.

(a) Purpose. This part governs the

collection, communication, and use, by

the institutions listed in paragraph (b)(2)

of this section, of certain information

bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living.

(b) Scope. (1) Information covered.

This part applies to information that is

used or expected to be used or collected

in whole or in part for the purpose of

serving as a factor in establishing a

consumer’s eligibility for credit,

insurance, employment, or any other

purpose authorized under section 604 of

the Fair Credit Reporting Act (15 U.S.C.

1681b).

(2) Institutions covered. This part

applies to national banks, and Federal

branches and Federal agencies of foreign

banks (collectively referred to as

‘‘bank’’).

(3) Relation to other laws. Nothing in

this part modifies, limits, or supersedes

the standards governing the privacy of

individually identifiable health

information promulgated by the

Secretary of Health and Human Services

under the authority of sections 262 and

264 of the Health Insurance Portability

and Accountability Act of 1996 (42

U.S.C. 1320d–1320d–8).

§ 41.2 Examples.

The examples used in this part and

the sample notice in appendix A to this

part are not exclusive. Compliance with

an example or use of the sample notice,

to the extent applicable, constitutes

compliance with this part.

§ 41.3 Definitions.

As used in this part, unless the

context requires otherwise:

(a) Act means the Fair Credit

Reporting Act (15 U.S.C. 1681 et seq.).

(b) Affiliate. (1) In general. The term

means any company that is related or

affiliated by common ownership, or

affiliated by corporate control or

common corporate control, with another

company.

(2) Related or affiliated by common

ownership or affiliated by corporate

control or common corporate control.

This means controlling, controlled by,

or under common control with, another

company.

(c) Clear and conspicuous. (1) In

general. The term means that a notice is

reasonably understandable and is

designed to call attention to the nature

and significance of the information it

contains.

(2) Examples. (i) Reasonably

understandable. A bank makes its

notice reasonably understandable if it:

(A) Presents the information in the

notice in clear and concise sentences,

paragraphs, and sections;

(B) Uses short explanatory sentences

or bullet lists whenever possible;

(C) Uses definite, concrete, everyday

words and active voice whenever

possible;

(D) Avoids multiple negatives;

(E) Avoids legal and highly technical

business terminology whenever

possible; and

(F) Avoids explanations that are

imprecise and are readily subject to

different interpretations.

(ii) Designed to call attention. A bank

designs its notice to call attention to the

nature and significance of the

information it contains if it:

(A) Uses a plain-language heading to

call attention to the notice;

(B) Uses a typeface and type size that

are easy to read;

(C) Provides wide margins and ample

line spacing;

(D) Uses boldface or italics for key

words; and

(E) In a form that combines the bank’s

notice with other information, uses

distinctive type sizes, styles, and

graphic devices, such as shading or

sidebars.

(iii) Notice on a web page. If a bank

provides a notice on a web page, the

bank designs its notice to call attention

to the nature and significance of the

information it contains if the bank:

(A) Places either the notice, or a link

that connects directly to the notice and

that is labeled appropriately to convey

the importance, nature, and relevance of

the notice, on a page that consumers

access often, such as a page on which

transactions are conducted;

(B) Uses text or visual cues to

encourage scrolling down the page if

necessary to view the entire notice; and

(C) Ensures that other elements on the

web page (such as text, graphics, links,

or sound) do not detract attention from

the notice.

(d) Communication includes written,

oral, and electronic communication;

provided that the term includes

electronic communication to a

consumer only if the consumer agrees to

receive the communication

electronically.

(e) Company means any corporation,

limited liability company, business

trust, general or limited partnership,

association, or similar organization.

(f) Consumer means an individual.

(g) Consumer report. (1) In general.

The term means any written, oral, or

other communication of any

information by a consumer reporting

agency bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living which is used or expected to be

used or collected in whole or in part for

the purpose of serving as a factor in

establishing the consumer’s eligibility

for:

(i) Credit or insurance to be used

primarily for personal, family, or

household purposes;

(ii) Employment purposes; or

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(iii) Any other purpose authorized

under section 604 of the Act (15 U.S.C.

1681b).

(2) Exclusions. The term does not

include:

(i) Any report containing information

solely as to transactions or experiences

between the consumer and the person

making the report;

(ii) Any communication of that

information among affiliates;

(iii) Any communication among

affiliates of opt out information if the

conditions in §§ 41.4 through 41.9 are

satisfied;

(iv) Any authorization or approval of

a specific extension of credit directly or

indirectly by the issuer of a credit card

or similar device;

(v) Any report in which a person who

has been requested by a third party to

make a specific extension of credit

directly or indirectly to a consumer

conveys his or her decision with respect

to such request, if the third party

advises the consumer of the name and

address of the person to whom the

request was made, and the person

makes the disclosures to the consumer

required under section 615 of the Act

(15 U.S.C. 1681m); or

(vi) A communication described in

section 603(o) of the Act (15 U.S.C.

1681a(o)).

(h) Consumer reporting agency means

any person which, for monetary fees,

dues or on a cooperative nonprofit basis,

regularly engages in whole or in part in

the practice of assembling or evaluating

consumer credit information or other

information on consumers for the

purpose of furnishing consumer reports

to third parties, and which uses any

means or facility of interstate commerce

for the purpose of preparing or

furnishing consumer reports.

(i) Control of a company means:

(1) Ownership, control, or power to

vote 25 percent or more of the

outstanding shares of any class of voting

security of the company, directly or

indirectly, or acting through one or

more other persons;

(2) Control in any manner over the

election of a majority of the directors,

trustees, or general partners (or

individuals exercising similar functions)

of the company; or

(3) The power to exercise, directly or

indirectly, a controlling influence over

the management or policies of the

company, as the Office of the

Comptroller of the Currency determines.

(j) Opt out means a direction by a

consumer that a bank not communicate

opt out information about the consumer

to one or more of its affiliates.

(k) Opt out information means

information that:

(1) Bears on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living;

(2) Is used or expected to be used or

collected in whole or in part to serve as

a factor in establishing the consumer’s

eligibility for credit or another purpose

listed in section 604 of the Act (15

U.S.C. 1681b); and

(3) Is not a report containing

information solely as to transactions or

experiences between the consumer and

the person reporting or communicating

the information.

(l) Person means any individual,

partnership, corporation, trust, estate,

cooperative, association, government or

governmental subdivision or agency, or

other entity.

§ 41.4 Communication of opt out

information to affiliates.

A bank’s communication to its

affiliates of opt out information about a

consumer is not a consumer report if:

(a) The bank has provided the

consumer with an opt out notice;

(b) The bank has given the consumer

a reasonable opportunity and means,

before the bank communicates the

information to its affiliates, to opt out;

and

(c) The consumer has not opted out.

§ 41.5 Contents of opt out notice.

(a) In general. An opt out notice must

be clear and conspicuous, and must

accurately explain:

(1) The categories of opt out

information about the consumer that a

bank communicates to its affiliates;

(2) The categories of affiliates to

which the bank communicates the

information;

(3) The consumer’s ability to opt out;

and

(4) A reasonable means for the

consumer to opt out.

(b) Future communications. A bank’s

notice may describe:

(1) Categories of opt out information

about the consumer that the bank

reserves the right to communicate to its

affiliates in the future but does not

currently communicate; and

(2) Categories of affiliates to which the

bank reserves the right in the future to

communicate, but to which the bank

does not currently communicate, opt

out information about the consumer.

(c) Partial opt out. A bank may allow

a consumer to select certain opt out

information or certain affiliates, with

respect to which the consumer wishes

to opt out.

(d) Examples of categories of

information that a bank communicates.

(1) A bank satisfies the requirement to

categorize the opt out information that

it communicates if the bank lists the

categories in paragraph (d)(2) of this

section, as applicable, and a few

examples to illustrate the types of

information in each category. These

examples may include those in

paragraph (d)(3) of this section, if

applicable.

(2) Categories of opt out information

may include information:

(i) From a consumer’s application;

(ii) From a consumer credit report;

(iii) Obtained by verifying

representations made by a consumer; or

(iv) Provided by another person

regarding its employment, credit, or

other relationship with a consumer.

(3) Examples of information within a

category listed in paragraph (d)(2) of

this section include a consumer’s:

(i) Income;

(ii) Credit score or credit history with

others;

(iii) Open lines of credit with others;

(iv) Employment history with others;

(v) Marital status; and

(vi) Medical history.

(4) A bank does not satisfy the

requirement if it communicates or

reserves the right to communicate

individually identifiable health

information (as described in section

1171(6)(B) of the Social Security Act (42

U.S.C. 1320d(6)(B)) but omits

illustrative examples of this

information.

(e) Examples of categories of affiliates.

(1) A bank satisfies the requirement to

categorize the affiliates to which it

communicates opt out information if it

lists the categories in paragraph (e)(2) of

this section, as applicable, and a few

examples to illustrate the types of

affiliates in each category.

(2) Categories of affiliates may

include:

(i) Financial service providers; and

(ii) Non-financial companies.

(f) Sample notice. A sample notice is

included in appendix A to this part.

§ 41.6 Reasonable opportunity to opt out.

(a) In general. A bank provides a

reasonable opportunity to opt out if it

provides a reasonable period of time

following the delivery of the opt out

notice for the consumer to opt out.

(b) Examples of reasonable period of

time: (1) In person. A bank handdelivers an opt out notice to the

consumer and provides at least 30 days

from the date it delivered the notice.

(2) By mail. A bank mails an opt out

notice to a consumer and provides at

least 30 days from the date it mailed the

notice.

(3) By electronic means. A bank

notifies the consumer electronically,

63130 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

and it provides at least 30 days after the

date that the consumer acknowledges

receipt of the electronic notice.

(c) Continuing opportunity to opt out.

A consumer may opt out at any time.

§ 41.7 Reasonable means of opting out.

(a) General rule. A bank provides a

consumer with a reasonable means of

opting out if it provides a reasonably

convenient method to opt out.

(b) Reasonably convenient methods.

Examples of reasonably convenient

methods include:

(1) Designating check-off boxes in a

prominent position on the relevant

forms included with the opt out notice;

(2) Including a reply form together

with the opt out notice;

(3) Providing an electronic means to

opt out, such as a form that can be

electronically mailed or a process at the

bank’s web site, if the consumer agrees

to the electronic delivery of information;

or

(4) Providing a toll-free telephone

number that consumers may call to opt

out.

(c) Methods not reasonably

convenient. Examples of methods that

are not reasonably convenient include:

(1) Requiring a consumer to write his

or her own letter to a bank; or

(2) Referring in a revised notice to a

check-off box that a bank included with

a previous notice but that the bank does

not include with the revised notice.

(d) Requiring specific means of opting

out. A bank may require each consumer

to opt out through a specific means, as

long as that means is reasonable for that

consumer.

§ 41.8 Delivery of opt out notices.

(a) In general. A bank must deliver an

opt out notice so that each consumer

can reasonably be expected to receive

actual notice in writing or, if the

consumer agrees, electronically.

(b) Examples of expectation of actual

notice. (1) A bank may reasonably

expect that a consumer will receive

actual notice if it:

(i) Hand-delivers a printed copy of the

notice to the consumer;

(ii) Mails a printed copy of the notice

to the last known mailing address of the

consumer; or

(iii) For the consumer who conducts

transactions electronically, posts the

notice on its electronic site and requires

the consumer to acknowledge receipt of

the notice as a necessary step to

obtaining a particular product or

service;

(2) A bank may not reasonably expect

that a consumer will receive actual

notice if it:

(i) Only posts a sign in its branch or

office or generally publishes

advertisements presenting its notice; or

(ii) Sends the notice via electronic mail

to a consumer who does not obtain a

product or service from the bank

electronically.

(c) Oral description insufficient. A

bank may not provide an opt out notice

solely by orally explaining the notice,

either in person or over the telephone.

(d) Retention or accessibility. (1) In

general. A bank must provide an opt out

notice so that it can be retained or

obtained at a later time by the consumer

in writing or, if the consumer agrees,

electronically.

(2) Examples of retention or

accessibility. A bank provides the notice

so that it can be retained or obtained at

a later time if the bank:

(i) Hand-delivers a printed copy of the

notice to the consumer;

(ii) Mails a printed copy of the notice

to the last known address of the

consumer upon request of the

consumer; or

(iii) Makes the bank’s current notice

available on a web site (or a link to

another web site) for the consumer who

obtains a product or service

electronically and who agrees to receive

the notice at the web site.

(e) Joint notice with affiliates. A bank

may provide a joint notice with one or

more affiliates as long as the notice

identifies each person providing it and

is accurate with respect to each.

(f) Joint relationships. (1) In general.

Notwithstanding any other provision in

this part, if two or more consumers

jointly obtain a product or service from

a bank (joint consumers), the following

rules apply:

(i) The bank may provide a single

notice to all of the joint consumers.

(ii) Any of the joint consumers has the

opportunity to opt out.

(iii) The bank may treat an opt out

direction by a joint consumer either as:

(A) Applying to all of the joint

consumers; or

(B) Applying to that particular joint

consumer.

(iv) The bank must explain in its opt

out notice which of the two policies set

forth in paragraph (f)(1)(iii) of this

section it will follow.

(v) If the bank follows the policy set

forth in paragraph (f)(1)(iii)(B) of this

section, by treating the opt out of a joint

consumer as applying to that particular

joint consumer, the bank must also

permit:

(A) A joint consumer to opt out on

behalf of other joint consumers; and

(B) One or more joint consumers to

notify the bank of their opt out

directions in a single response.

(vi) A bank may not require all joint

consumers to opt out before it

implements any opt out direction.

(vii) If a bank receives an opt out by

a particular joint consumer that does not

apply to the others, the bank may

disclose information about the others as

long as no information is disclosed

about the consumer who opted out.

(2) Example. If consumers A and B,

who have different addresses, have a

joint checking account with a bank and

arrange for the bank to send statements

to A’s address, the bank may do any of

the following, but it must explain in its

opt out notice which opt out policy the

bank will follow. The bank may send a

single opt out notice to A’s address and:

(i) Treat an opt out direction by A as

applying to the entire account. If the

bank does so and A opts out, the bank

may not require B to opt out as well

before implementing A’s opt out

direction.

(ii) Treat A’s opt out direction as

applying to A only. If the bank does so,

it must also permit:

(A) A and B to opt out for each other;

and

(B) A and B to notify the bank of their

opt out directions in a single response

(such as on a single form) if they choose

to give separate opt out directions.

(iii) If A opts out only for A, and B

does not opt out, the bank may disclose

opt out information only about B, and

not about A and B jointly.

§ 41.9 Revised opt out notice.

If a bank has provided a consumer

with one or more opt out notices and

plans to communicate opt out

information to its affiliates about the

consumer other than as described in

those notices, the bank must provide the

consumer with a revised opt out notice

that complies with §§ 41.4 through 41.8.

§ 41.10 Time by which opt out must be

honored.

If a bank provides a consumer with an

opt out notice and the consumer opts

out, the bank must comply with the opt

out as soon as reasonably practicable

after the bank receives it.

§ 41.11 Duration of opt out.

An opt out remains effective until

revoked by the consumer in writing or

electronically, as long as the consumer

continues to have a relationship with

the bank. If the consumer’s relationship

with the bank terminates, the opt out

will continue to apply to this

information. However, a new notice and

opportunity to opt out must be provided

if the consumer establishes a new

relationship with the bank.

§ 41.12 Prohibition against discrimination.

(a) In general. If a consumer is an

applicant for credit, a bank must not

discriminate against the consumer if the

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63131

1 If the financial institution is using its web site

or an e-mail address as the only method by which

a consumer may opt out, the consumer must agree

to the electronic delivery of information.

consumer opts out of the bank’s

communication of opt out information

to it affiliates.

(b) Examples of discrimination

against an applicant. A bank

discriminates against an applicant if it:

(1) Denies the applicant credit

because the applicant opts out;

(2) Varies the terms of credit

adversely to the applicant such as by

providing less favorable pricing terms to

an applicant who opts out; or

(3) Applies more stringent credit

underwriting standards to the applicant

because the applicant opts out.

(c) Regulation B. The terms

‘‘applicant’’ and ‘‘discriminate against’’

in § 41.12 have the same meanings

ascribed to them in 12 CFR part 202.

Appendix A to Part 41—Sample Notice

This appendix contains a sample notice to

facilitate compliance with the notice

requirements of this part. An institution may

use applicable disclosures in this sample to

provide notices required by this part.

Notice of Your Opportunity To Opt Out of

Information Sharing With Companies in Our

Corporate Family

Information We Can Share With Our

Corporate Family About You—Unless You

Tell Us Not to

What Information: Unless you tell us not

to, [Financial Institution] may share with

companies in our corporate family

information about you including:

• Information we obtain from your

application, such as [provide illustrative

examples, such as ‘‘your income’’ or ‘‘your

marital status’’];

• Information we obtain from a consumer

report, such as [provide illustrative

examples, such as ‘‘your credit score or credit

history’’];

• Information we obtain to verify

representations made by you, such as

[provide illustrative examples, such as ‘‘your

open lines of credit’’]; and

• Information we obtain from a person

regarding its employment, credit, or other

relationship with you, such as [provide

illustrative examples, such as ‘‘your

employment history’’].

Shared With Whom: Companies in our

corporate family who may receive this

information are:

• Financial service providers, such as

[provide illustrative examples, such as

‘‘mortgage bankers, broker-dealers, and

insurance agents’’]; and

• Non-financial companies, such as

[provide illustrative examples, such as

‘‘retailers, direct marketers, airlines, and

publishers’’].

How To Tell Us Not To Share This

Information With Our Corporate Family

If you prefer that we not share this

information with companies in our corporate

family, you may direct us not to share this

information by doing the following [insert

one or more of the reasonable means of

opting out listed below 1]: [call us toll free at

{insert toll free number}]; or [visit our web

site at {insert web site address} and {provide

further instructions how to use the web site

option}]; or [e-mail us at {insert the e-mail

address}]; or [fill out and tear off the bottom

of this sheet and mail to the following

address: {insert address}]; or [check the

appropriate box on the attached form {attach

form} and mail to the following address:

{insert address}].

Note: Your direction in this paragraph

covers certain information about you that we

might otherwise share with our corporate

family. We may share other information

about you with our corporate family as

permitted by law.

Dated: September 22, 2000.

John D. Hawke, Jr.,

Comptroller of the Currency.

Federal Reserve System

12 CFR Chapter II

Authority and Issuance

For the reasons set forth in the joint

preamble, chapter II of title 12 of the

Code of Federal Regulations is proposed

to be amended by adding a new part 222

to read as follows:

PART 222 FAIR CREDIT REPORTING

(REGULATION V)

Sec.

222.1 Purpose and scope.

222.2 Examples.

222.3 Definitions.

222.4 Communication of opt out

information to affiliates.

222.5 Contents of opt out notice.

222.6 Reasonable opportunity to opt out.

222.7 Reasonable means of opting out.

222.8 Delivery of opt out notices.

222.9 Revised opt out notice.

222.10 Time by which opt out must be

honored.

222.11 Duration of opt out.

222.12 Prohibition against discrimination.

Appendix A to Part 222—Sample Notice

Authority: 15 U.S.C. 1681s.

§ 222.1 Purpose and scope.

(a) Purpose. This part governs the

collection, communication, and use, by

the institutions listed in paragraph (b)(2)

of this section, of certain information

bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living.

(b) Scope. (1) Information covered.

This part applies to information that is

used or expected to be used or collected

in whole or in part for the purpose of

serving as a factor in establishing a

consumer’s eligibility for credit,

insurance, employment, or any other

purpose authorized under section 604 of

the Fair Credit Reporting Act (15 U.S.C.

1681b).

(2) Institutions covered. This part

applies to member banks of the Federal

Reserve System (other than national

banks), branches and agencies of foreign

banks (other than Federal branches,

Federal agencies, and insured State

branches of foreign banks), commercial

lending companies owned or controlled

by foreign banks, and organizations

operating under section 25 or 25A of the

Federal Reserve Act (12 U.S.C. 601–

604a, 611–631).

(3) Relation to other laws. Nothing in

this part modifies, limits, or supersedes

the standards governing the privacy of

individually identifiable health

information promulgated by the

Secretary of Health and Human Services

under the authority of sections 262 and

264 of the Health Insurance Portability

and Accountability Act of 1996 (42

U.S.C. 1320d–1320d–8).

§ 222.2 Examples.

The examples used in this part and

the sample notice in appendix A to this

part are not exclusive. Compliance with

an example or use of the sample notice,

to the extent applicable, constitutes

compliance with this part.

§ 222.3 Definitions.

As used in this part, unless the

context requires otherwise:

(a) Act means the Fair Credit

Reporting Act (15 U.S.C. 1681 et seq.).

(b) Affiliate. (1) In general. The term

means any company that is related or

affiliated by common ownership, or

affiliated by corporate control or

common corporate control, with another

company.

(2) Related or affiliated by common

ownership or affiliated by corporate

control or common corporate control.

This means controlling, controlled by,

or under common control with, another

company.

(c) Clear and conspicuous. (1) In

general. The term means that a notice is

reasonably understandable and is

designed to call attention to the nature

and significance of the information it

contains.

(2) Examples. (i) Reasonably

understandable. You make your notice

reasonably understandable if you:

(A) Present the information in the

notice in clear and concise sentences,

paragraphs, and sections;

(B) Use short explanatory sentences or

bullet lists whenever possible;

63132 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

(C) Use definite, concrete, everyday

words and active voice whenever

possible;

(D) Avoid multiple negatives;

(E) Avoid legal and highly technical

business terminology whenever

possible; and

(F) Avoid explanations that are

imprecise and are readily subject to

different interpretations.

(ii) Designed to call attention. You

design your notice to call attention to

the nature and significance of the

information it contains if you:

(A) Use a plain-language heading to

call attention to the notice;

(B) Use a typeface and type size that

are easy to read;

(C) Provide wide margins and ample

line spacing;

(D) Use boldface or italics for key

words; and

(E) In a form that combines your

notice with other information, use

distinctive type sizes, styles, and

graphic devices, such as shading or

sidebars.

(iii) Notice on a web page. If you

provide a notice on a web page, you

design your notice to call attention to

the nature and significance of the

information it contains if you:

(A) Place either the notice, or a link

that connects directly to the notice and

that is labeled appropriately to convey

the importance, nature, and relevance of

the notice, on a page that consumers

access often, such as a page on which

transactions are conducted;

(B) Use text or visual cues to

encourage scrolling down the page if

necessary to view the entire notice; and

(C) Ensure that other elements on the

web page (such as text, graphics, links,

or sound) do not detract attention from

the notice.

(d) Communication includes written,

oral, and electronic communication;

provided that the term includes

electronic communication to a

consumer only if the consumer agrees to

receive the communication

electronically.

(e) Company means any corporation,

limited liability company, business

trust, general or limited partnership,

association, or similar organization.

(f) Consumer means an individual.

(g) Consumer report. (1) In general.

The term means any written, oral, or

other communication of any

information by a consumer reporting

agency bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living which is used or expected to be

used or collected in whole or in part for

the purpose of serving as a factor in

establishing the consumer’s eligibility

for:

(i) Credit or insurance to be used

primarily for personal, family, or

household purposes;

(ii) Employment purposes; or

(iii) Any other purpose authorized

under section 604 of the Act (15 U.S.C.

1681b).

(2) Exclusions. The term does not

include:

(i) Any report containing information

solely as to transactions or experiences

between the consumer and the person

making the report;

(ii) Any communication of that

information among affiliates;

(iii) Any communication among

affiliates of opt out information if the

conditions in §§ 222.4 through 222.9 are

satisfied;

(iv) Any authorization or approval of

a specific extension of credit directly or

indirectly by the issuer of a credit card

or similar device;

(v) Any report in which a person who

has been requested by a third party to

make a specific extension of credit

directly or indirectly to a consumer

conveys his or her decision with respect

to such request, if the third party

advises the consumer of the name and

address of the person to whom the

request was made, and the person

makes the disclosures to the consumer

required under section 615 of the Act

(15 U.S.C. 1681m); or

(vi) A communication described in

section 603(o) of the Act (15 U.S.C.

1681a(o)).

(h) Consumer reporting agency means

any person which, for monetary fees,

dues or on a cooperative nonprofit basis,

regularly engages in whole or in part in

the practice of assembling or evaluating

consumer credit information or other

information on consumers for the

purpose of furnishing consumer reports

to third parties, and which uses any

means or facility of interstate commerce

for the purpose of preparing or

furnishing consumer reports.

(i) Control of a company means:

(1) Ownership, control, or power to

vote 25 percent or more of the

outstanding shares of any class of voting

security of the company, directly or

indirectly, or acting through one or

more other persons;

(2) Control in any manner over the

election of a majority of the directors,

trustees, or general partners (or

individuals exercising similar functions)

of the company;

(3) The power to exercise, directly or

indirectly, a controlling influence over

the management or policies of the

company, as the Board determines.

(j) Opt out means a direction by a

consumer that you not communicate opt

out information about the consumer to

one or more of your affiliates.

(k) Opt out information means

information that:

(1) Bears on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living;

(2) Is used or expected to be used or

collected in whole or in part to serve as

a factor in establishing the consumer’s

eligibility for credit or another purpose

listed in section 604 of the Act (15

U.S.C. 1681b); and

(3) Is not a report containing

information solely as to transactions or

experiences between the consumer and

the person reporting or communicating

the information.

(1) Person means any individual,

partnership, corporation, trust, estate,

cooperative, association, government or

governmental subdivision or agency, or

other entity.

(m) You means a member bank of the

Federal Reserve System (other than a

national bank), a branch or agency of a

foreign bank (other than a Federal

branch, Federal agency, or insured State

branch of a foreign bank), a commercial

lending company owned or controlled

by a foreign bank, or an organization

operating under section 25 or 25A of the

Federal Reserve Act (12 U.S.C. 601–

604a, 611–631).

§ 222.4 Communication of opt out

information to affiliates.

Your communication to your affiliates

of opt out information about a consumer

is not a consumer report if:

(a) You have provided the consumer

with an opt out notice;

(b) You have given the consumer a

reasonable opportunity and means,

before you communicate the

information to your affiliates, to opt out;

and

(c) The consumer has not opted out.

§ 222.5 Contents of opt out notice.

(a) In general. An opt out notice must

be clear and conspicuous, and must

accurately explain:

(1) The categories of opt out

information about the consumer that

you communicate to your affiliates;

(2) The categories of affiliates to

which you communicate the

information;

(3) The consumer’s ability to opt out;

and

(4) A reasonable means for the

consumer to opt out.

(b) Future communications. Your

notice may describe:

(1) Categories of opt out information

about the consumer that you reserve the

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63133

right to communicate to your affiliates

in the future but do not currently

communicate; and

(2) Categories of affiliates to which

you reserve the right in the future to

communicate, but to which you do not

currently communicate, opt out

information about the consumer.

(c) Partial opt out. You may allow a

consumer to select certain opt out

information or certain affiliates, with

respect to which the consumer wishes

to opt out.

(d) Examples of categories of

information that you communicate. (1)

You satisfy the requirement to

categorize the opt out information that

you communicate if you list the

categories in paragraph (d)(2) of this

section, as applicable, and a few

examples to illustrate the types of

information in each category. These

examples may include those in

paragraph (d)(3) of this section, if

applicable.

(2) Categories of opt out information

may include information:

(i) From a consumer’s application;

(ii) From a consumer credit report;

(iii) Obtained by verifying

representations made by a consumer; or

(iv) Provided by another person

regarding its employment, credit, or

other relationship with a consumer.

(3) Examples of information within a

category listed in paragraph (d)(2) of

this section include a consumer’s:

(i) Income;

(ii) Credit score or credit history with

others;

(iii) Open lines of credit with others;

(iv) Employment history with others;

(v) Marital status; and

(vi) Medical history.

(4) You do not satisfy the requirement

if you communicate or reserve the right

to communicate individually

identifiable health information (as

described in section 1171(6)(B) of the

Social Security Act (42 U.S.C.

1320d(6)(B)) but omit illustrative

examples of this information.

(e) Examples of categories of affiliates.

(1) You satisfy the requirement to

categorize the affiliates to which you

communicate opt out information if you

list the categories in paragraph (e)(2) of

this section, as applicable, and a few

examples to illustrate the types of

affiliates in each category.

(2) Categories of affiliates may

include:

(i) Financial service providers; and

(ii) Non-financial companies.

(f) Sample notice. A sample notice is

included in appendix A to this part.

§ 222.6 Reasonable opportunity to opt out.

(a) In general. You provide a

reasonable opportunity to opt out if you

provide a reasonable period of time

following the delivery of the opt out

notice for the consumer to opt out.

(b) Examples of reasonable period of

time: (1) In person. You hand-deliver an

opt out notice to the consumer and

provide at least 30 days from the date

you delivered the notice.

(2) By mail. You mail an opt out

notice to a consumer and provide at

least 30 days from the date you mailed

the notice.

(3) By electronic means. You notify

the consumer electronically, and you

provide at least 30 days after the date

that the consumer acknowledges receipt

of the electronic notice.

(c) Continuing opportunity to opt out.

A consumer may opt out at any time.

§ 222.7 Reasonable means of opting out.

(a) General rule. You provide a

consumer with a reasonable means of

opting out if you provide a reasonably

convenient method to opt out.

(b) Reasonably convenient methods.

Examples of reasonably convenient

methods include:

(1) Designating check-off boxes in a

prominent position on the relevant

forms included with the opt out notice;

(2) Including a reply form together

with the opt out notice;

(3) Providing an electronic means to

opt out, such as a form that can be

electronically mailed or a process at

your web site, if the consumer agrees to

the electronic delivery of information;

or

(4) Providing a toll-free telephone

number that consumers may call to opt

out.

(c) Methods not reasonably

convenient. Examples of methods that

are not reasonably convenient include:

(1) Requiring a consumer to write his

or her own letter to you; or

(2) Referring in a revised notice to a

check-off box that you included with a

previous notice but that you do not

include with the revised notice.

(d) Requiring specific means of opting

out. You may require each consumer to

opt out through a specific means, as

long as that means is reasonable for that

consumer.

§ 222.8 Delivery of opt out notices.

(a) In general. You must deliver an opt

out notice so that each consumer can

reasonably be expected to receive actual

notice in writing or, if the consumer

agrees, electronically.

(b) Examples of expectation of actual

notice. (1) You may reasonably expect

that a consumer will receive actual

notice if you:

(i) Hand-deliver a printed copy of the

notice to the consumer;

(ii) Mail a printed copy of the notice

to the last known mailing address of the

consumer; or

(iii) For the consumer who conducts

transactions electronically, post the

notice on your electronic site and

require the consumer to acknowledge

receipt of the notice as a necessary step

to obtaining a particular product or

service;

(2) You may not reasonably expect

that a consumer will receive actual

notice if you:

(i) Only post a sign in your branch or

office or generally publish

advertisements presenting your notice;

or

(ii) Send the notice via electronic mail

to a consumer who does not obtain a

product or service from you

electronically.

(c) Oral description insufficient. You

may not provide an opt out notice solely

by orally explaining the notice, either in

person or over the telephone.

(d) Retention or accessibility. (1) In

general. You must provide an opt out

notice so that it can be retained or

obtained at a later time by the consumer

in writing or, if the consumer agrees,

electronically.

(2) Examples of retention or

accessibility. You provide the notice so

that it can be retained or obtained at a

later time if you:

(i) Hand-deliver a printed copy of the

notice to the consumer;

(ii) Mail a printed copy of the notice

to the last known address of the

consumer upon request of the

consumer; or

(iii) Make your current notice

available on a web site (or a link to

another web site) for the consumer who

obtains a product or service

electronically and who agrees to receive

the notice at the web site.

(e) Joint notice with affiliates. You

may provide a joint notice with one or

more affiliates as long as the notice

identifies each person providing it and

is accurate with respect to each.

(f) Joint relationships. (1) In general.

Notwithstanding any other provision in

this part, if two or more consumers

jointly obtain a product or service from

you (joint consumers), the following

rules apply:

(i) You may provide a single notice to

all of the joint consumers.

(ii) Any of the joint consumers has the

opportunity to opt out.

(iii) You may treat an opt out

direction by a joint consumer either as:

(A) Applying to all of the joint

consumers; or

(B) Applying to that particular joint

consumer.

(iv) You must explain in your opt out

notice which of the two policies set

63134 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

1 If the financial institution is using its web site

or an e-mail address as the only method by which

a consumer may opt out, the consumer must agree

to the electronic delivery of information.

forth in paragraph (f)(1)(iii) of this

section you will follow.

(v) If you follow the policy set forth

in paragraph (f)(1)(iii)(B) of this section,

by treating the opt out of a joint

consumer as applying to that particular

joint consumer, you must also permit:

(A) A joint consumer to opt out on

behalf of other joint consumers; and

(B) One or more joint consumers to

notify you of their opt out directions in

a single response.

(vi) You may not require all joint

consumers to opt out before you

implement any opt out direction.

(vii) If you receive an opt out by a

particular joint consumer that does not

apply to the others, you may disclose

information about the others as long as

no information is disclosed about the

consumer who opted out.

(2) Example. If consumers A and B,

who have different addresses, have a

joint checking account with you and

arrange for you to send statements to A’s

address, you may do any of the

following, but you must explain in your

opt out notice which opt out policy you

will follow. You may send a single opt

out notice to A’s address and:

(i) Treat an opt out direction by A as

applying to the entire account. If you do

so and A opts out, you may not require

B to opt out as well before

implementing A’s opt out direction.

(ii) Treat A’s opt out direction as

applying to A only. If you do so, you

must also permit:

(A) A and B to opt out for each other;

and

(B) A and B to notify you of their opt

out directions in a single response (such

as on a single form) if they choose to

give separate opt out directions.

(iii) If A opts out only for A, and B

does not opt out, you may disclose opt

out information only about B, and not

about A and B jointly.

§ 222.9 Revised opt out notice.

If you have provided a consumer with

one or more opt out notices and plan to

communicate opt out information to

your affiliates about the consumer other

than as described in those notices, you

must provide the consumer with a

revised opt out notice that complies

with §§ 222.4 through 222.8.

§ 222.10 Time by which opt out must be

honored.

If you provide a consumer with an opt

out notice and the consumer opts out,

you must comply with the opt out as

soon as reasonably practicable after you

receive it.

§ 222.11 Duration of opt out.

An opt out remains effective until

revoked by the consumer in writing or

electronically, as long as the consumer

continues to have a relationship with

you. If the consumer’s relationship with

you terminates, the opt out will

continue to apply to this information.

However, a new notice and opportunity

to opt out must be provided if the

consumer establishes a new relationship

with you.

§ 222.12 Prohibition against

discrimination.

(a) In general. If a consumer is an

applicant for credit, you must not

discriminate against the consumer if the

consumer opts out of your

communication of opt out information

to your affiliates.

(b) Examples of discrimination

against an applicant. You discriminate

against an applicant if you:

(1) Deny the applicant credit because

the applicant opts out;

(2) Vary the terms of credit adversely

to the applicant such as by providing

less favorable pricing terms to an

applicant who opts out; or

(3) Apply more stringent credit

underwriting standards to the applicant

because the applicant opts out.

(c) Regulation B. The terms

‘‘applicant’’ and ‘‘discriminate against’’

in § 222.12 have the same meanings

ascribed to them in 12 CFR part 202.

Appendix A to Part 222—Sample

Notice

This appendix contains a sample notice to

facilitate compliance with the notice

requirements of this part. An institution may

use applicable disclosures in this sample to

provide notices required by this part.

Notice of Your Opportunity to Opt Out of

Information Sharing With Companies in Our

Corporate Family

Information We Can Share With Our

Corporate Family About You—Unless You

Tell Us Not To

What Information: Unless you tell us not

to, [Financial Institution] may share with

companies in our Corporate family

information about you including:

• Information we obtain from your

application, such as [provide illustrative

examples, such as ‘‘your income’’ or ‘‘your

marital status’’];

• Information we obtain from a consumer

report, such as [provide illustrative examples,

such as ‘‘your credit score or credit history’’];

• Information we obtain to verify

representations made by you, such as

[provide illustrative examples, such as ‘‘your

open lines of credit’’]; and

• Information we obtain from a person

regarding its employment, credit, or other

relationship with you, such as [provide

illustrative examples, such as ‘‘your

employment history’’].

Shared With Whom: Companies in our

corporate family who may receive this

information are:

• Financial service providers, such as

[provide illustrative examples, such as

‘‘mortgage bankers, broker-dealers, and

insurance agents’’]; and

• Non-financial companies, such as

[provide illustrative examples, such as

‘‘retailers, direct marketers, airlines, and

publishers’’].

How To Tell Us Not To Share This

Information With Our Corporate Family

If you prefer that we not share this

information with companies in our corporate

family, you may direct us not to share this

information by doing the following [insert

one or more of the reasonable means of

opting out listed below 1]: [call us toll free at

{insert toll free number}]; or [visit our web

site at {insert web site address} and {provide

further instructions how to use the web site

option}]; or [e-mail us at {insert the e-mail

address}]; or [fill out and tear off the bottom

of this sheet and mail to the following

address: {insert address}]; or [check the

appropriate box on the attached form {attach

form} and mail to the following address:

{insert address}].

Note: Your direction in this paragraph

covers certain information about you that we

might otherwise share with our corporate

family. We may share other information

about you with our corporate family as

permitted by law.

By order of the Board of Governors of the

Federal Reserve System, October 11, 2000.

Jennifer J. Johnson,

Secretary of the Board.

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

For the reasons set out in the joint

preamble, chapter III of title 12 of the

Code of Federal Regulations is proposed

to be amended by adding a new part 334

to read as follows:

PART 334—FAIR CREDIT REPORTING

Sec.

334.1 Purpose and scope.

334.2 Examples.

334.3 Definitions.

334.4 Communication of opt out

information to affiliates.

334.5 Contents of opt out notice.

334.6 Reasonable opportunity to opt out.

334.7 Reasonable means of opting out.

334.8 Delivery of opt out notices.

334.9 Revised opt out notice.

334.10 Time by which opt out must be

honored.

334.11 Duration of opt out.

334.12 Prohibition against discrimination.

Appendix A to Part 222—Sample Notice

Authority: 15 U.S.C. 1681s; 12 U.S.C.

1819(a)(Tenth).

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63135

§ 334.1 Purpose and scope.

(a) Purpose. This part governs the

collection, communication, and use, by

the institutions listed in paragraph (b)(2)

of this section, of certain information

bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living.

(b) Scope. (1) Information covered.

This part applies to information that is

used or expected to be used or collected

in whole or in part for the purpose of

serving as a factor in establishing a

consumer’s eligibility for credit,

insurance, employment, or any other

purpose authorized under section 604 of

the Fair Credit Reporting Act (15 U.S.C.

1681b).

(2) Institutions covered. This part

applies to banks insured by the FDIC

(other than members of the Federal

Reserve System) and insured state

branches of foreign banks.

(3) Relation to other laws. Nothing in

this part modifies, limits, or supersedes

the standards governing the privacy of

individually identifiable health

information promulgated by the

Secretary of Health and Human Services

under the authority of sections 262 and

264 of the Health Insurance Portability

and Accountability Act of 1996 (42

U.S.C. 1320d–1320d–8).

§ 334.2 Examples.

The examples used in this part and

the sample notice in appendix A to this

part are not exclusive. Compliance with

an example or use of the sample notice,

to the extent applicable, constitutes

compliance with this part.

§ 334.3 Definitions.

As used in this part, unless the

context requires otherwise:

(a) Act means the Fair Credit

Reporting Act (15 U.S.C. 1681 et seq.).

(b) Affiliate. (1) In general. The term

means any company that is related or

affiliated by common ownership, or

affiliated by corporate control or

common corporate control, with another

company.

(2) Related or affiliated by common

ownership or affiliated by corporate

control or common corporate control.

This means controlling, controlled by,

or under common control with, another

company.

(c) Clear and conspicuous. (1) In

general. The term means that a notice is

reasonably understandable and is

designed to call attention to the nature

and significance of the information it

contains.

(2) Examples. (i) Reasonably

understandable. You make your notice

reasonably understandable if you:

(A) Present the information in the

notice in clear and concise sentences,

paragraphs, and sections;

(B) Use short explanatory sentences or

bullet lists whenever possible;

(C) Use definite, concrete, everyday

words and active voice whenever

possible;

(D) Avoid multiple negatives;

(E) Avoid legal and highly technical

business terminology whenever

possible; and

(F) Avoid explanations that are

imprecise and are readily subject to

different interpretations.

(ii) Designed to call attention. You

design your notice to call attention to

the nature and significance of the

information it contains if you:

(A) Use a plain-language heading to

call attention to the notice;

(B) Use a typeface and type size that

are easy to read;

(C) Provide wide margins and ample

line spacing;

(D) Use boldface or italics for key

words; and

(E) In a form that combines your

notice with other information, use

distinctive type sizes, styles, and

graphic devices, such as shading or

sidebars.

(iii) Notice on a web page. If you

provide a notice on a web page, you

design your notice to call attention to

the nature and significance of the

information it contains if:

(A) You place either the notice, or a

link that connects directly to the notice

and that is labeled appropriately to

convey the importance, nature, and

relevance of the notice, on a page that

consumers access often, such as a page

on which transactions are conducted;

(B) You use text or visual cues to

encourage scrolling down the page if

necessary to view the entire notice; and

(C) You ensure that other elements on

the web page (such as text, graphics,

links, or sound) do not detract attention

from the notice.

(d) Communication includes written,

oral, and electronic communication;

provided that the term includes

electronic communication to a

consumer only if the consumer agrees to

receive the communication

electronically.

(e) Company means any corporation,

limited liability company, business

trust, general or limited partnership,

association, or similar organization.

(f) Consumer means an individual.

(g) Consumer report. (1) In general.

The term means any written, oral, or

other communication of any

information by a consumer reporting

agency bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living which is used or expected to be

used or collected in whole or in part for

the purpose of serving as a factor in

establishing the consumer’s eligibility

for:

(i) Credit or insurance to be used

primarily for personal, family, or

household purposes;

(ii) Employment purposes; or

(iii) Any other purpose authorized

under section 604 of the Act (15 U.S.C.

1681b).

(2) Exclusions. The term does not

include:

(i) Any report containing information

solely as to transactions or experiences

between the consumer and the person

making the report;

(ii) Any communication of that

information among affiliates;

(iii) Any communication among

affiliates of opt out information if the

conditions in §§ 334.4 through 334.9 are

satisfied;

(iv) Any authorization or approval of

a specific extension of credit directly or

indirectly by the issuer of a credit card

or similar device;

(v) Any report in which a person who

has been requested by a third party to

make a specific extension of credit

directly or indirectly to a consumer

conveys his or her decision with respect

to such request, if the third party

advises the consumer of the name and

address of the person to whom the

request was made, and the person

makes the disclosures to the consumer

required under section 615 of the Act

(15 U.S.C. 1681m); or

(vi) A communication described in

section 603(o) of the Act (15 U.S.C.

1681a(o)).

(h) Consumer reporting agency means

any person which, for monetary fees,

dues or on a cooperative nonprofit basis,

regularly engages in whole or in part in

the practice of assembling or evaluating

consumer credit information or other

information on consumers for the

purpose of furnishing consumer reports

to third parties, and which uses any

means or facility of interstate commerce

for the purpose of preparing or

furnishing consumer reports.

(i) Control of a company means:

(1) Ownership, control, or power to

vote 25 percent or more of the

outstanding shares of any class of voting

security of the company, directly or

indirectly, or acting through one or

more other persons;

(2) Control in any manner over the

election of a majority of the directors,

63136 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

trustees, or general partners (or

individuals exercising similar functions)

of the company; or

(3) The power to exercise, directly or

indirectly, a controlling influence over

the management or policies of the

company, as the FDIC determines.

(j) Opt out means a direction by a

consumer that you not communicate opt

out information about the consumer to

one or more of your affiliates.

(k) Opt out information means

information that:

(1) Bears on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living;

(2) Is used or expected to be used or

collected in whole or in part to serve as

a factor in establishing the consumer’s

eligibility for credit or another purpose

listed in section 604 of the Act (15

U.S.C. 1681b); and

(3) Is not a report containing

information solely as to transactions or

experiences between the consumer and

the person reporting or communicating

the information.

(l) Person means any individual,

partnership, corporation, trust, estate,

cooperative, association, government or

governmental subdivision or agency, or

other entity.

(m) You means banks insured by the

FDIC (other than members of the

Federal Reserve System) and insured

state branches of foreign banks.

§ 334.4 Communication of opt out

information to affiliates.

Your communication to your affiliates

of opt out information about a consumer

is not a consumer report if:

(a) You have provided the consumer

with an opt out notice;

(b) You have given the consumer a

reasonable opportunity and means,

before you communicate the

information to your affiliates, to opt out;

and

(c) The consumer has not opted out.

§ 334.5 Contents of opt out notice.

(a) In general. An opt out notice must

be clear and conspicuous, and must

accurately explain:

(1) The categories of opt out

information about the consumer that

you communicate to your affiliates;

(2) The categories of affiliates to

which you communicate the

information;

(3) The consumer’s ability to opt out;

and

(4) A reasonable means for the

consumer to opt out.

(b) Future communications. Your

notice may describe:

(1) Categories of opt out information

about the consumer that you reserve the

right to communicate to your affiliates

in the future but do not currently

communicate; and

(2) Categories of affiliates to which

you reserve the right in the future to

communicate, but to which you do not

currently communicate, opt out

information about the consumer.

(c) Partial opt out. You may allow a

consumer to select certain opt out

information or certain affiliates, with

respect to which the consumer wishes

to opt out.

(d) Examples of categories of

information that you communicate. (1)

You satisfy the requirement to

categorize the opt out information that

you communicate if you list the

categories in paragraph (d)(2) of this

section, as applicable, and a few

examples to illustrate the types of

information in each category. These

examples may include those in

paragraph (d)(3) of this section, if

applicable.

(2) Categories of opt out information

may include information:

(i) From a consumer’s application;

(ii) From a consumer credit report;

(iii) Obtained by verifying

representations made by a consumer;

and

(iv) Provided by another person

regarding its employment, credit, or

other relationship with a consumer.

(3) Examples of information within a

category listed in paragraph (d)(2) of

this section include a consumer’s:

(i) Income;

(ii) Credit score or credit history with

others;

(iii) Open lines of credit with others;

(iv) Employment history with others;

(v) Marital status; and

(vi) Medical history.

(4) You do not satisfy the requirement

if you communicate or reserve the right

to communicate individually

identifiable health information (as

described in section 1171(6)(B) of the

Social Security Act (42 U.S.C.

1320d(6)(B)) but omit illustrative

examples of this information.

(e) Examples of categories of affiliates.

(1) You satisfy the requirement to

categorize the affiliates to which you

communicate opt out information if you

list the categories in paragraph (e)(2) of

this section, as applicable, and a few

examples to illustrate the types of

affiliates in each category.

(2) Categories of affiliates may

include:

(i) Financial service providers; and

(ii) Non-financial companies.

(f) Sample notice. A sample notice is

included in appendix A to this part.

§ 334.6 Reasonable opportunity to opt out.

(a) In general. You provide a

reasonable opportunity to opt out if you

provide a reasonable period of time

following the delivery of the opt out

notice for the consumer to opt out.

(b) Examples of reasonable period of

time: (1) In person. You hand-deliver an

opt out notice to the consumer and

provide at least 30 days from the date

you delivered the notice.

(2) By mail. You mail an opt out

notice to a consumer and provide at

least 30 days from the date you mailed

the notice.

(3) By electronic means. You notify

the consumer electronically, and you

provide at least 30 days after the date

that the consumer acknowledges receipt

of the electronic notice.

(c) Continuing opportunity to opt out.

A consumer may opt out at any time.

§ 334.7 Reasonable means of opting out.

(a) General rule. You provide a

consumer with a reasonable means of

opting out if you provide a reasonably

convenient method to opt out.

(b) Reasonably convenient methods.

Examples of reasonably convenient

methods include:

(1) Designating check-off boxes in a

prominent position on the relevant

forms included with the opt out notice;

(2) Including a reply form together

with the opt out notice;

(3) Providing an electronic means to

opt out, such as a form that can be

electronically mailed or a process at

your web site, if the consumer agrees to

the electronic delivery of information;

or

(4) Providing a toll-free telephone

number that consumers may call to opt

out.

(c) Methods not reasonably

convenient. Examples of methods that

are not reasonably convenient include:

(1) Requiring a consumer to write his

or her own letter to you; or

(2) Referring in a revised notice to a

check-off box that you included with a

previous notice but that you do not

include with the revised notice.

(d) Requiring specific means of opting

out. You may require each consumer to

opt out through a specific means, as

long as that means is reasonable for that

consumer.

§ 334.8 Delivery of opt out notices.

(a) In general. You must deliver an opt

out notice so that each consumer can

reasonably be expected to receive actual

notice in writing or, if the consumer

agrees, electronically.

(b) Examples of expectation of actual

notice. (1) You may reasonably expect

that a consumer will receive actual

notice if you:

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63137

(i) Hand-deliver a printed copy of the

notice to the consumer;

(ii) Mail a printed copy of the notice

to the last known mailing address of the

consumer; or

(iii) For the consumer who conducts

transactions electronically, post the

notice on your electronic site and

require the consumer to acknowledge

receipt of the notice as a necessary step

to obtaining a particular product or

service;

(2) You may not reasonably expect

that a consumer will receive actual

notice if you:

(i) Only post a sign in your branch or

office or generally publish

advertisements presenting your notice;

or

(ii) Send the notice via electronic mail

to a consumer who does not obtain a

product or service from you

electronically.

(c) Oral description insufficient. You

may not provide an opt out notice solely

by orally explaining the notice, either in

person or over the telephone.

(d) Retention or accessibility. (1) In

general. You must provide an opt out

notice so that it can be retained or

obtained at a later time by the consumer

in writing or, if the consumer agrees,

electronically.

(2) Examples of retention or

accessibility. You provide the notice so

that it can be retained or obtained at a

later time if you:

(i) Hand-deliver a printed copy of the

notice to the consumer;

(ii) Mail a printed copy of the notice

to the last known address of the

consumer upon request of the

consumer; or

(iii) Make your current notice

available on a web site (or a link to

another web site) for the consumer who

obtains a product or service

electronically and who agrees to receive

the notice at the web site.

(e) Joint notice with affiliates. You

may provide a joint notice with one or

more affiliates as long as the notice

identifies each person providing it and

is accurate with respect to each.

(f) Joint relationships. (1) In general.

Notwithstanding any other provision in

this part, if two or more consumers

jointly obtain a product or service from

you (joint consumers), the following

rules apply:

(i) You may provide a single notice to

all of the joint consumers.

(ii) Any of the joint consumers has the

opportunity to opt out.

(iii) You may treat an opt out

direction by a joint consumer either as:

(A) Applying to all of the joint

consumers; or

(B) Applying to that particular joint

consumer.

(iv) You must explain in your opt out

notice which of the two policies set

forth in paragraph (f)(1)(iii) of this

section you will follow.

(v) If you follow the policy set forth

in paragraph (f)(1)(iii)(B) of this section,

by treating the opt out of a joint

consumer as applying to that particular

joint consumer, you must also permit:

(A) A joint consumer to opt out on

behalf of other joint consumers; and

(B) One or more joint consumers to

notify you of their opt out directions in

a single response.

(vi) You may not require all joint

consumers to opt out before you

implement any opt out direction.

(vii) If you receive an opt out by a

particular joint consumer that does not

apply to the others, you may disclose

information about the others as long as

no information is disclosed about the

consumer who opted out.

(2) Example. If consumers A and B,

who have different addresses, have a

joint checking account with you and

arrange for you to send statements to A’s

address, you may do any of the

following, but you must explain in your

opt out notice which opt out policy you

will follow. You may send a single opt

out notice to A’s address and:

(i) Treat an opt out direction by A as

applying to the entire account. If you do

so and A opts out, you may not require

B to opt out as well before

implementing A’s opt out direction.

(ii) Treat A’s opt out direction as

applying to A only. If you do so, you

must also permit:

(A) A and B to opt out for each other;

and

(B) A and B to notify you of their opt

out directions in a single response (such

as on a single form) if they choose to

give separate opt out directions.

(iii) If A opts out only for A, and B

does not opt out, you may disclose opt

out information only about B, and not

about A and B jointly.

§ 334.9 Revised opt out notice.

If you have provided a consumer with

one or more opt out notices and plan to

communicate opt out information to

your affiliates about the consumer, other

than as described in those notices, you

must provide the consumer with a

revised opt out notice that complies

with §§ 334.4 through 334.8.

§ 334.10 Time by which opt out must be

honored.

If you provide a consumer with an opt

out notice and the consumer opts out,

you must comply with the opt out as

soon as reasonably practicable after you

receive it.

§ 334.11 Duration of opt out.

An opt out remains effective until

revoked by the consumer in writing or

electronically, as long as the consumer

continues to have a relationship with

the institution. If the consumer’s

relationship with the institution

terminates, the opt out will continue to

apply to this information. However, a

new notice and opportunity to opt out

must be provided if the consumer

establishes a new relationship with the

institution.

§ 334.12 Prohibition against

discrimination.

(a) In general. If a consumer is an

applicant for credit, you must not

discriminate against the consumer if the

consumer opts out of the your

communication of opt out information

to your affiliates.

(b) Examples of discrimination

against an applicant. You discriminate

against an applicant if you:

(1) Deny the applicant credit because

the applicant opts out;

(2) Vary the terms of credit adversely

to the applicant such as by providing

less favorable pricing terms to an

applicant who opts out; or

(3) Apply more stringent credit

underwriting standards to the applicant

because the applicant opts out.

(c) Regulation B. The terms

‘‘applicant’’ and ‘‘discriminate against’’

in § 334.12 have the same meanings

ascribed to them in 12 CFR part 202.

Appendix A to Part 334—Sample

Notice

This appendix contains a sample notice to

facilitate compliance with the notice

requirements of this part. An institution may

use applicable disclosures in this sample to

provide notices required by this part.

Notice of Your Opportunity To Opt Out of

Information Sharing With Companies in Our

Corporate Family

Information We Can Share With Our

Corporate Family About You—Unless You

Tell Us Not to

What Information: Unless you tell us not

to, [Financial Institution] may share with

companies in our corporate family

information about you including:

• Information we obtain from your

application, such as [provide illustrative

examples, such as ‘‘your income’’ or ‘‘your

marital status’’];

• Information we obtain from a consumer

report, such as [provide illustrative examples,

such as ‘‘your credit score or credit history’’];

• Information we obtain to verify

representations made by you, such as

[provide illustrative examples, such as ‘‘your

open lines of credit’’]; and

• Information we obtain from a person

regarding its employment, credit, or other

relationship with you, such as [provide

63138 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

1 If the financial institution is using its web site

or an e-mail address as the only method by which

a consumer may opt out, the consumer must agree

to the electronic delivery of information.

illustrative examples, such as ‘‘your

employment history’’].

Shared With Whom: Companies in our

corporate family who may receive this

information are:

• Financial service providers, such as

[provide illustrative examples, such as

‘‘mortgage bankers, broker-dealers, and

insurance agents’’]; and

• Non-financial companies, such as

[provide illustrative examples, such as

‘‘retailers, direct marketers, airlines, and

publishers’’].

How To Tell Us Not To Share This

Information With Our Corporate Family

If you prefer that we not share this

information with companies in our corporate

family, you may direct us not to share this

information by doing the following [insert

one or more of the reasonable means of

opting out listed below1]: [call us toll free at

{insert toll free number}]; or [visit our web

site at {insert web site address} and {provide

further instructions how to use the web site

option}]; or [e-mail us at {insert the e-mail

address}]; or [fill out and tear off the bottom

of this sheet and mail to the following

address: {insert address}]; or [check the

appropriate box on the attached form {attach

form} and mail to the following address:

{insert address}].

Note: Your direction in this paragraph

covers certain information about you that we

might otherwise share with our corporate

family. We may share other information

about you with our corporate family as

permitted by law.

By order of the Board of Directors, Federal

Deposit Insurance Corporation.

Dated at Washington, D.C., this 25th day of

September, 2000.

Robert E. Feldman,

Executive Secretary.

Office of Thrift Supervision

12 CFR Chapter V

Authority and Issuance

For the reasons set out in the joint

preamble, OTS proposes to amend

chapter V of title 12 of the Code of

Federal Regulations by adding a new

part 571 to read as follows:

PART 571—FAIR CREDIT REPORTING

Sec.

571.1 Purpose and scope.

571.2 Examples.

571.3 Definitions.

571.4 Communication of opt out

information to affiliates.

571.5 Content of opt out notice.

571.6 Reasonable opportunity to opt out.

571.7 Reasonable means of opting out.

571.8 Delivery of opt out notice.

571.9 Revised opt out notice.

571.10 Time by which opt out must be

honored.

571.11 Duration of opt out.

571.12 Prohibition against discrimination.

Appendix A to Part 571—Sample Notice

Authority: 12 U.S.C. 1462a, 1463, 1464,

1467a, 1828; 15 U.S.C. 1681s.

§ 571.1 Purpose and scope.

(a) Purpose. This part governs the

collection, communication, and use, by

the institutions listed in paragraph (b)(2)

of this section, of certain information

bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living.

(b) Scope. (1) Information covered.

This part applies to information that is

used or expected to be used or collected

in whole or in part for the purpose of

serving as a factor in establishing a

consumer’s eligibility for credit,

insurance, employment, or any other

purpose authorized under section 604 of

the Fair Credit Reporting Act (15 U.S.C.

1681b).

(2) Institutions covered. This part

applies to savings associations whose

deposits are insured by the Federal

Deposit Insurance Corporation.

(3) Relation to other laws. Nothing in

this part modifies, limits, or supersedes

the standards governing the privacy of

individually identifiable health

information promulgated by the

Secretary of Health and Human Services

under the authority of sections 262 and

264 of the Health Insurance Portability

and Accountability Act of 1996 (42

U.S.C. 1320d–1320d–8).

§ 571.2 Examples.

The examples used in this part and

the model form in appendix A to this

part are not exclusive. Compliance with

an example or use of the sample notice,

to the extent applicable, constitutes

compliance with this part.

§ 571.3 Definitions.

As used in this part, unless the

context requires otherwise:

(a) Act means the Fair Credit

Reporting Act (15 U.S.C. 1681 et seq.).

(b) Affiliate. (1) In general. The term

means any company that is related or

affiliated by common ownership, or

affiliated by corporate control or

common corporate control, with another

company.

(2) Related or affiliated by common

ownership or affiliated by corporate

control or common corporate control.

This means controlling, controlled by,

or under common control with, another

company.

(c) Clear and conspicuous. (1) In

general. The term means that a notice is

reasonably understandable and is

designed to call attention to the nature

and significance of the information it

contains.

(2) Examples. (i) Reasonably

understandable. You make your notice

reasonably understandable if you:

(A) Present the information in the

notice in clear and concise sentences,

paragraphs, and sections;

(B) Use short explanatory sentences or

bullet lists whenever possible;

(C) Use definite, concrete, everyday

words and active voice whenever

possible;

(D) Avoid multiple negatives;

(E) Avoid legal and highly technical

business terminology whenever

possible; and

(F) Avoid explanations that are

imprecise and are readily subject to

different interpretations.

(ii) Designed to call attention. You

design your notice to call attention to

the nature and significance of the

information it contains if you:

(A) Use a plain-language heading to

call attention to the notice;

(B) Use a typeface and type size that

are easy to read;

(C) Provide wide margins and ample

line spacing;

(D) Use boldface or italics for key

words; and

(E) In a form that combines your

notice with other information, use

distinctive type sizes, styles, and

graphic devices, such as shading or

sidebars.

(iii) Notice on a web page. If you

provide a notice on a web page, you

design your notice to call attention to

the nature and significance of the

information it contains if:

(A) You place either the notice, or a

link that connects directly to the notice

and that is labeled appropriately to

convey the importance, nature, and

relevance of the notice, on a page that

consumers access often, such as a page

on which transactions are conducted;

(B) You use text or visual cues to

encourage scrolling down the page if

necessary to view the entire notice; and

(C) You ensure that other elements on

the web page (such as text, graphics,

links, or sound) do not detract attention

from the notice.

(d) Communication includes written,

oral, and electronic communication;

provided that the term includes

electronic communication to a

consumer only if the consumer agrees to

receive the communication

electronically.

(e) Company means any corporation,

limited liability company, business

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trust, general or limited partnership,

association, or similar organization.

(f) Consumer means an individual.

(g) Consumer report. (1) In general.

The term means any written, oral, or

other communication of any

information by a consumer reporting

agency bearing on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living which is used or expected to be

used or collected in whole or in part for

the purpose of serving as a factor in

establishing the consumer’s eligibility

for:

(i) Credit or insurance to be used

primarily for personal, family, or

household purposes;

(ii) Employment purposes; or

(iii) Any other purpose authorized

under section 604 of the Act (15 U.S.C.

1681b).

(2) Exclusions. The term does not

include:

(i) Any report containing information

solely as to transactions or experiences

between the consumer and the person

making the report;

(ii) Any communication of that

information among affiliates;

(iii) Any communication among

affiliates of opt out information if the

conditions in §§ 571.4 through 571.9 are

satisfied;

(iv) Any authorization or approval of

a specific extension of credit directly or

indirectly by the issuer of a credit card

or similar device;

(v) Any report in which a person who

has been requested by a third party to

make a specific extension of credit

directly or indirectly to a consumer

conveys his or her decision with respect

to such request, if the third party

advises the consumer of the name and

address of the person to whom the

request was made, and the person

makes the disclosures to the consumer

required under section 615 of the Act

(15 U.S.C. 1681m); or

(vi) A communication described in

section 603(o) of the Act (15 U.S.C.

1681a(o)).

(h) Consumer reporting agency means

any person which, for monetary fees,

dues or on a cooperative nonprofit basis,

regularly engages in whole or in part in

the practice of assembling or evaluating

consumer credit information or other

information on consumers for the

purpose of furnishing consumer reports

to third parties, and which uses any

means or facility of interstate commerce

for the purpose of preparing or

furnishing consumer reports.

(i) Control of a company means:

(1) Ownership, control, or power to

vote 25 percent or more of the

outstanding shares of any class of voting

security of the company, directly or

indirectly, or acting through one or

more other persons;

(2) Control in any manner over the

election of a majority of the directors,

trustees, or general partners (or

individuals exercising similar functions)

of the company; or

(3) The power to exercise, directly or

indirectly, a controlling influence over

the management or policies of the

company, as OTS determines.

(j) Opt out means a direction by a

consumer that you not communicate opt

out information about the consumer to

one or more of your affiliates.

(k) Opt out information means

information that:

(1) Bears on a consumer’s credit

worthiness, credit standing, credit

capacity, character, general reputation,

personal characteristics, or mode of

living;

(2) Is used or expected to be used or

collected in whole or in part to serve as

a factor in establishing the consumer’s

eligibility for credit or another purpose

listed in section 604 of the Act (15

U.S.C. 1681b); and

(3) Is not a report containing

information solely as to transactions or

experiences between the consumer and

the person reporting or communicating

the information.

(l) Person means any individual,

partnership, corporation, trust, estate,

cooperative, association, government or

governmental subdivision or agency, or

other entity.

(m) You means savings associations

whose deposits are insured by the

Federal Deposit Insurance Corporation.

§ 571.4 Communication of opt out

information to affiliates.

Your communication to your affiliates

of opt out information about a consumer

is not a consumer report if:

(a) You have provided the consumer

with an opt out notice;

(b) You have given the consumer a

reasonable opportunity and means,

before you communicate the

information to your affiliates, to opt out;

and

(c) The consumer has not opted out.

§ 571.5 Content of opt out notice.

(a) In general. An opt out notice must

be clear and conspicuous, and must

accurately explain:

(1) The categories of opt out

information about the consumer that

you communicate to your affiliates;

(2) The categories of affiliates to

which you communicate the

information;

(3) The consumer’s ability to opt out;

and

(4) A reasonable means for the

consumer to opt out.

(b) Future communications. Your

notice may describe:

(1) Categories of opt out information

about the consumer that you reserve the

right to communicate to your affiliates

in the future but do not currently

communicate; and

(2) Categories of affiliates to which

you reserve the right in the future to

communicate, but to which you do not

currently communicate, opt out

information about the consumer.

(c) Partial opt out. You may allow a

consumer to select certain opt out

information or certain affiliates, with

respect to which the consumer wishes

to opt out.

(d) Examples of categories of

information that you communicate. (1)

You satisfy the requirement to

categorize the opt out information that

you communicate if you list the

categories in paragraph (d)(2) of this

section, as applicable, and a few

examples to illustrate the types of

information in each category. These

examples may include those in

paragraph (d)(3) of this section, if

applicable.

(2) Categories of opt out information

may include information:

(i) From a consumer’s application;

(ii) From a consumer credit report;

(iii) Obtained by verifying

representations made by a consumer; or

(iv) Provided by another person

regarding its employment, credit, or

other relationship with a consumer.

(3) Examples of information within a

category listed in paragraph (d)(2) of

this section include a consumer’s:

(i) Income;

(ii) Credit score or credit history with

others;

(iii) Open lines of credit with others;

(iv) Employment history with others;

(v) Marital status; and

(vi) Medical history.

(4) You do not satisfy the requirement

if you communicate or reserve the right

to communicate individually

identifiable health information (as

described in section 1171(6)(B) of the

Social Security Act (42 U.S.C.

1320d(6)(B)) but omit illustrative

examples of this information.

(e) Examples of categories of affiliates.

(1) You satisfy the requirement to

categorize the affiliates to which you

communicate opt out information if you

list the categories in paragraph (e)(2) of

this section, as applicable, and a few

examples to illustrate the types of

affiliates in each category.

(2) Categories of affiliates may

include:

(i) Financial service providers; and

63140 Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules

(ii) Non-financial companies.

(f) Sample notice. A sample notice is

included in appendix A to this part.

§ 571.6 Reasonable opportunity to opt out.

(a) In general. You provide a

reasonable opportunity to opt out if you

provide a reasonable period of time

following the delivery of the opt out

notice for the consumer to opt out.

(b) Examples of reasonable period of

time: (1) In person. You hand-deliver an

opt out notice to the consumer and

provide at least 30 days from the date

you delivered the notice.

(2) By mail. You mail an opt out

notice to a consumer and provide at

least 30 days from the date you mailed

the notice.

(3) By electronic means. You notify

the consumer electronically, and you

provide at least 30 days after the date

that the consumer acknowledges receipt

of the electronic notice.

(c) Continuing opportunity to opt out.

A consumer may opt out at any time.

§ 571.7 Reasonable means of opting out.

(a) General rule. You provide a

consumer with a reasonable means of

opting out if you provide a reasonably

convenient method to opt out.

(b) Reasonably convenient methods.

Examples of reasonably convenient

methods include:

(1) Designating check-off boxes in a

prominent position on the relevant

forms included with the opt out notice;

(2) Including a reply form together

with the opt out notice;

(3) Providing an electronic means to

opt out, such as a form that can be

electronically mailed or a process at

your web site, if the consumer agrees to

the electronic delivery of information;

or

(4) Providing a toll-free telephone

number that consumers may call to opt

out.

(c) Methods that are not reasonably

convenient. Examples of methods that

are not reasonably convenient include:

(1) Requiring a consumer to write his

or her own letter to you; or

(2) Referring in a revised notice to a

check-off box that you included with a

previous notice but that you do not

include with the revised notice.

(d) Requiring specific means of opting

out. You may require each consumer to

opt out through a specific means, as

long as that means is reasonable for that

consumer.

§ 571.8 Delivery of opt out notice.

(a) In general. You must deliver an opt

out notice so that each consumer can

reasonably be expected to receive actual

notice in writing or, if the consumer

agrees, electronically.

(b) Examples of expectation of actual

notice. (1) You may reasonably expect

that a consumer will receive actual

notice if you:

(i) Hand-deliver a printed copy of the

notice to the consumer;

(ii) Mail a printed copy of the notice

to the last known mailing address of the

consumer; or

(iii) For the consumer who conducts

transactions electronically, post the

notice on your electronic site and

require the consumer to acknowledge

receipt of the notice as a necessary step

to obtaining a particular product or

service;

(iv) You may not reasonably expect

that a consumer will receive actual

notice if you:

(A) Only post a sign in your branch

or office or generally publish

advertisements presenting your notice;

or

(B) Send the notice via electronic mail

to a consumer who does not obtain a

product or service from you

electronically.

(c) Oral description insufficient. You

may not provide an opt out notice solely

by orally explaining the notice, either in

person or over the telephone.

(d) Retention or accessibility. (1) In

general. You must provide an opt out

notice so that it can be retained or

obtained at a later time by the consumer

in writing or, if the consumer agrees,

electronically.

(2) Examples of retention or

accessibility. You provide the notice so

that it can be retained or obtained at a

later time if you:

(i) Hand-deliver a printed copy of the

notice to the consumer;

(ii) Mail a printed copy of the notice

to the last known address of the

consumer upon request of the

consumer; or

(iii) Make your current notice

available on a web site (or a link to

another web site) for the consumer who

obtains a product or service

electronically and who agrees to receive

the notice at the web site.

(e) Joint notice with affiliates. You

may provide a joint notice with one or

more affiliates as long as the notice

identifies each person providing it and

is accurate with respect to each.

(f) Joint relationships. (1) In general.

Notwithstanding any other provision in

this part, if two or more consumers

jointly obtain a product or service from

you (joint consumers), the following

rules apply:

(i) You may provide a single notice to

all of the joint consumers.

(ii) Any of the joint consumers has the

opportunity to opt out.

(iii) You may treat an opt out

direction by a joint consumer either as:

(A) Applying to all of the joint

consumers; or

(B) Applying to that particular joint

consumer.

(iv) You must explain in your opt out

notice which of the two policies set

forth in paragraph (f)(1)(iii) of this

section you will follow.

(v) If you follow the policy set forth

in paragraph (f)(1)(iii)(B) of this section,

by treating the opt out of a joint

consumer as applying to that particular

joint consumer, you must also permit:

(A) A joint consumer to opt out on

behalf of other joint consumers; and

(B) One or more joint consumers to

notify you of their opt out directions in

a single response.

(vi) You may not require all joint

consumers to opt out before you

implement any opt out direction.

(vii) If you receive an opt out by a

particular joint consumer that does not

apply to the others, you may disclose

information about the others as long as

no information is disclosed about the

consumer who opted out.

(2) Example. If consumers A and B,

who have different addresses, have a

joint checking account with you and

arrange for you to send statements to A’s

address, you may do any of the

following, but you must explain in your

opt out notice which opt out policy you

will follow. You may send a single opt

out notice to A’s address and:

(i) Treat an opt out direction by A as

applying to the entire account. If you do

so and A opts out, you may not require

B to opt out as well before

implementing A’s opt out direction.

(ii) Treat A’s opt out direction as

applying to A only. If you do so, you

must also permit:

(A) A and B to opt out for each other;

and

(B) A and B to notify you of their opt

out directions in a single response (such

as on a single form) if they choose to

give separate opt out directions.

(iii) If A opts out only for A, and B

does not opt out, you may disclose opt

out information only about B, and not

about A and B jointly.

§ 571.9 Revised opt out notice.

If you have provided a consumer with

one or more opt out notices and plan to

communicate opt out information to

your affiliates about the consumer, other

than as described in those notices, you

must provide the consumer with a

revised opt out notice that complies

with §§ 571.4 through 571.8.

§ 571.10 Time by which opt out must be

honored.

If you provide a consumer with an opt

out notice and the consumer opts out,

Federal Register / Vol. 65, No. 204 / Friday, October 20, 2000 / Proposed Rules 63141

1 If the financial institution is using its web site

or an e-mail address as the only method by which

a consumer may opt out, the consumer must agree

to the electronic delivery of information.

you must comply with the opt out as

soon as reasonably practicable after you

receive it.

§ 571.11 Duration of opt out.

An opt out remains effective until

revoked by the consumer in writing or

electronically, as long as the consumer

continues to have a relationship with

the institution. If the consumer’s

relationship with the institution

terminates, the opt out will continue to

apply to this information. However, a

new notice and opportunity to opt out

must be provided if the consumer

establishes a new relationship with the

institution.

§ 571.12 Prohibition against

discrimination.

(a) In general. You must not

discriminate against a consumer who is

an applicant for credit because the

consumer opts out of your

communication of opt out information

to your affiliates.

(b) Examples of discrimination

against an applicant. You discriminate

against an applicant if you:

(1) Deny the applicant credit because

the applicant opts out;

(2) Vary the terms of credit adversely

to the applicant such as by providing

less favorable pricing terms to an

applicant who opts out; or

(3) Apply more stringent credit

underwriting standards to the applicant

because the applicant opts out.

(c) Regulation B. The terms

‘‘applicant’’ and ‘‘discriminate against’’

in this section have the same meanings

ascribed to them in 12 CFR part 202.

Appendix A to Part 571—Sample

Notice

This appendix contains a sample notice to

facilitate compliance with the notice

requirements of this part. An institution may

use applicable disclosures in this sample to

provide notices required by this part.

Notice of Your Opportunity to Opt Out of

Information Sharing With Companies in Our

Corporate Family

Information We Can Share With Our

Corporate Family About You—Unless You

Tell Us Not to

What Information: Unless you tell us not

to, [Financial Institution] may share with

companies in our corporate family

information about you including:

• Information we obtain from your

application, such as [provide illustrative

examples, such as ‘‘your income’’ or ‘‘your

marital status’’];

• Information we obtain from a consumer

report, such as [provide illustrative examples,

such as ‘‘your credit score or credit history’’];

• Information we obtain to verify

representations made by you, such as

[provide illustrative examples, such as ‘‘your

open lines of credit’’]; and

• Information we obtain from a person

regarding its employment, credit, or other

relationship with you, such as [provide

illustrative examples, such as ‘‘your

employment history’’].

Shared With Whom: Companies in our

corporate family who may receive this

information are:

• Financial service providers, such as

[provide illustrative examples, such as

‘‘mortgage bankers, broker-dealers, and

insurance agents’’]; and

• Non-financial companies, such as

[provide illustrative examples, such as

‘‘retailers, direct marketers, airlines, and

publishers’’].

How To Tell Us Not To Share This

Information With Our Corporate Family

If you prefer that we not share this

information with companies in our corporate

family, you may direct us not to share this

information by doing the following [insert

one or more of the reasonable means of

opting out listed below1]: [call us toll free at

{insert toll free number}]; or [visit our web

site at {insert web site address} and {provide

further instructions how to use the web site

option}]; or [e-mail us at {insert the e-mail

address}]; or [fill out and tear off the bottom

of this sheet and mail to the following

address: {insert address}]; or [check the

appropriate box on the attached form {attach

form} and mail to the following address:

{insert address}].

Note: Your direction in this paragraph

covers certain information about you that we

might otherwise share with our corporate

family. We may share other information

about you with our corporate family as

permitted by law.

Dated: September 29, 2000.

By the Office of Thrift Supervision.

Ellen Seidman,

Director.

[FR Doc. 00–26601 Filed 10–19–00; 8:45 am]

BILLING CODE 4810–33–P; 6210–01P; 6714–01–P; 6720–

01–P