Document ID: SEC-2007-0466-0001
Agency: sec
Document Type: Proposed Rule
Title: Interagency Proposal for Model Privacy Form Under the Gramm- Leach-Bliley Act
Posted Date: 2007-03-29T04:00Z

[Federal Register: March 29, 2007 (Volume 72, Number 60)]
[Proposed Rules]               
[Page 14939-15000]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29mr07-31]                         

[[Page 14939]]

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Part III

Department of the Treasury

Office of the Comptroller of the Currency

12 CFR Part 40

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Office of Thrift Supervision

12 CFR Part 573

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Federal Reserve System

12 CFR Part 216

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Federal Deposit Insurance Corporation

12 CFR Part 332

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National Credit Union Administration

12 CFR Part 716

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Federal Trade Commission

16 CFR Part 313

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Commodity Futures Trading Commission

17 CFR Part 160

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Securities and Exchange Commission

17 CFR Part 248

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Interagency Proposal for Model Privacy Form Under the Gramm-Leach-
Bliley Act; Proposed Rule

[[Page 14940]]

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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency

12 CFR Part 40

[Docket ID OCC-2007-0003]
RIN 1557-AC80

FEDERAL RESERVE SYSTEM

12 CFR Part 216

[Docket No. R-1280]

FEDERAL DEPOSIT INSURANCE CORPORATION

12 CFR Part 332

RIN 3064-AD16

DEPARTMENT OF THE TREASURY

Office of Thrift Supervision

12 CFR Part 573

[Docket ID OTS-2007-0005]
RIN 1550-AC12

NATIONAL CREDIT UNION ADMINISTRATION

12 CFR Part 716

RIN 3133-AC84

FEDERAL TRADE COMMISSION

16 CFR Part 313

[Project No. 034815]
RIN 3084-AA94

COMMODITY FUTURES TRADING COMMISSION

17 CFR Part 160

RIN 3038-AC04

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 248

[Release Nos. 34-55497, IA-2598, IC-27755; File No. S7-09-07]
RIN 3235-AJO6

 
Interagency Proposal for Model Privacy Form Under the Gramm-
Leach-Bliley Act

AGENCIES: Office of the Comptroller of the Currency, Treasury (OCC); 
Board of Governors of the Federal Reserve System (Board); Federal 
Deposit Insurance Corporation (FDIC); Office of Thrift Supervision, 
Treasury (OTS); National Credit Union Administration (NCUA); Federal 
Trade Commission (FTC); Commodity Futures Trading Commission (CFTC); 
and Securities and Exchange Commission (SEC).

ACTION: Proposed rule.

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SUMMARY: The OCC, Board, FDIC, OTS, NCUA, FTC, CFTC, and SEC (the 
Agencies) are proposing amendments to their rules that implement the 
privacy provisions of the Gramm-Leach-Bliley Act (GLB Act), Title V, 
Subtitle A. These rules require financial institutions to provide 
initial and annual privacy notices to their customers. As required 
under section 728 of the Financial Services Regulatory Relief Act of 
2006 (Regulatory Relief Act or Act), the Agencies are proposing a safe 
harbor model privacy form that financial institutions may use to 
provide disclosures under the privacy rules. Institutions that use 
notices based on the Sample Clauses currently contained in most of the 
privacy rules would lose the benefit of a safe harbor for compliance 
with respect to those notices if they are provided more than one year 
following the date of publication of a final rule. Similarly, 
institutions that use notices based on the Sample Clauses in the SEC's 
privacy rule could no longer rely on the guidance provided with respect 
to those notices if they are provided more than one year following the 
date of publication of a final rule.

DATES: Comments must be submitted on or before May 29, 2007.
    For information regarding the effective dates of the provisions 
proposed in this document, see the discussion under ``Proposed 
Effective Dates'' in the SUPPLEMENTARY INFORMATION section.

ADDRESSES: Because the Agencies will jointly review all of the comments 
submitted, interested parties may send comments to any of the Agencies 
and need not send comments (or copies) to all of the Agencies. 
Commenters are encouraged to use the title ``Model Privacy Form'' to 
facilitate the organization and distribution of comments among the 
Agencies. Interested parties are invited to submit written comments to:
    Office of the Comptroller of the Currency: You may submit comments 
by any of the following methods:
     Federal eRulemaking Portal--``Regulations.gov'': Go to 
http://www.regulations.gov, select ``Comptroller of the Currency'' from 

the agency drop-down menu, then click ``Submit.'' In the ``Docket ID'' 
column, select ``OCC-2007-0003'' to submit or view public comments and 
to view supporting and related materials for this notice of proposed 
rulemaking. The ``User Tips'' link at the top of the Regulations.gov 
home page provides information on using Regulations.gov, including 
instructions for submitting or viewing public comments, viewing other 
supporting and related materials, and viewing the docket after the 
close of the comment period.
     Mail: Office of the Comptroller of the Currency, 250 E 
Street, SW., Mail Stop 1-5, Washington, DC 20219.
     Hand Delivery/Courier: 250 E Street, SW., Attn: Public 
Information Room, Mail Stop 1-5, Washington, DC 20219.
    Instructions: You must include ``OCC'' as the agency name and 
``Docket Number OCC-2007-0003'' in your comment. In general, OCC will 
enter all comments received into the docket and publish them on 
Regulations.gov without change, including any business or personal 
information that you provide such as name and address information, e-
mail addresses, or phone numbers. Comments, including attachments and 
other supporting materials, received are part of the public record and 
subject to public disclosure. Do not enclose any information in your 
comment or supporting materials that you consider confidential or 
inappropriate for public disclosure.
    You may review comments and other related materials by any of the 
following methods:
     Viewing Comments Electronically: Go to http://www.regulations.gov
, select ``Comptroller of the Currency'' from the 

agency drop-down menu, then click ``Submit.'' In the ``Docket ID'' 
column, select ``OCC-2007-0003'' to view public comments for this 
notice of proposed rulemaking.
     Viewing Comments Personally: You may personally inspect 
and photocopy comments at the OCC's Public Information Room, 250 E 
Street, SW., Washington, DC. You can make an appointment to inspect 
comments by calling (202) 874-5043.
     Docket: You may also view or request available background 
documents and project summaries using the methods described above.
    Board of Governors of the Federal Reserve System: You may submit 
comments, identified by Docket No. R-1280, by any of the following 
methods:
     Agency Web Site: http://www.federalreserve.gov Follow the instructions for submitting comments at http://www.federalreserve.gov/.

.

[[Page 14941]]

     Federal eRulemaking Portal: http://www.regulations.gov. 

Follow the instructions for submitting comments.
number in the subject line of the message.
     Fax: 202/452-3819 or 202/452-3102.
     Mail: Jennifer J. Johnson, Secretary, Board of Governors 
of the Federal Reserve System, 20th Street and Constitution Avenue, 
NW., Washington, DC 20551.
    All public comments are available from the Board's Web site at 
http://www.federalreserve.gov/generalinfo/foia/ProposedRegs.cfm as 

submitted, unless modified for technical reasons. Accordingly, your 
comments will not be edited to remove any identifying or contact 
information. Public comments may also be viewed electronically or in 
paper in Room MP-500 of the Board's Martin Building (20th and C 
Streets, NW.,) between 9 a.m. and 5 p.m. on weekdays.
    FDIC: You may submit comments by any of the following methods:
    Agency Web Site: http://www.fdic.gov/regulations/laws/federal. 

Follow instructions for submitting comments on the Agency Web Site.
    E-mail: Comments@FDIC.gov. Include ``Model Privacy Form'' in the 
subject line of the message.
    Mail: Robert E. Feldman, Executive Secretary, Attention: Comments, 
Federal Deposit Insurance Corporation, 550 17th Street, NW., 
Washington, DC 20429.
    Hand Delivery/Courier: Guard station at the rear of the 550 17th 
Street Building (located on F Street) on business days between 7 a.m. 
and 5 p.m. (EST).
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 

instructions for submitting comments.
    Public Inspection: All comments received will be posted without 
change to http://www.fdic.gov/regulations/laws/federal including any 

personal information provided. Comments may be inspected and 
photocopied in the FDIC Public Information Center, 3501 North Fairfax 
Drive, Room E-1002, Arlington, VA 22226, between 9 a.m. and 5 p.m. 
(EST) on business days. Paper copies of public comments may be ordered 
from the Public Information Center by telephone at (877) 275-3342 or 
(703) 562-2200.
    Office of Thrift Supervision: You may submit comments, identified 
by OTS-2007-0005, by any of the following methods:
     Federal eRulemaking Portal: Go to http://www.regulations.gov
, select ``Office of Thrift Supervision'' from the 

agency drop-down menu, then click submit. Select Docket ID ``OTS-2007-
0005'' to submit or view public comments and to view supporting and 
related materials for this notice of proposed rulemaking. The ``User 
Tips'' link at the top of the page provides information on using 
Regulations.gov, including instructions for submitting or viewing 
public comments, viewing other supporting and related materials, and 
viewing the docket after the close of the comment period.
     Mail: Regulation Comments, Chief Counsel's Office, Office 
of Thrift Supervision, 1700 G Street, NW., Washington, DC 20552, 
Attention: OTS-2007-0005.
     Hand Delivery/Courier: Guard's Desk, East Lobby Entrance, 
1700 G Street, NW., from 9 a.m. to 4 p.m. on business days, Attention: 
Regulation Comments, Chief Counsel's Office, Attention: OTS-2007-0005.
    Instructions: All submissions received must include the agency name 
and docket number for this rulemaking. All comments received will be 
entered into the docket and posted on Regulations.gov without change, 
including any personal information provided. Comments, including 
attachments and other supporting materials received are part of the 
public record and subject to public disclosure. Do not enclose any 
information in your comment or supporting materials that you consider 
confidential or inappropriate for public disclosure.
    Viewing Comments Electronically: Go to http://www.regulations.gov, 

select ``Office of Thrift Supervision'' from the agency drop-down menu, 
then click ``Submit.'' Select Docket ID ``OTS-2007-0005'' to view 
public comments for this notice of proposed rulemaking.
    Viewing Comments On-Site: You may inspect comments at the Public 
Reading Room, 1700 G Street, NW., by appointment. To make an 
appointment for access, call (202) 906-5922, send an e-mail to 
public.info@ots.treas.gov, or send a facsimile transmission to (202) 

906-6518. (Prior notice identifying the materials you will be 
requesting will assist us in serving you.) We schedule appointments on 
business days between 10 a.m. and 4 p.m. In most cases, appointments 
will be available the next business day following the date we receive a 
request.
    National Credit Union Administration: Comments should be directed 
to Mary Rupp, Secretary of the Board. You may submit comments by any of 
the following methods (Please send comments by one method only):
     Federal eRulemaking Portal: http://www.regulations.gov. 

Follow the instructions for submitting comments.
     NCUA Web Site: http://www.ncua.gov/news/proposed_regs/proposed_regs.html.
 Follow the instructions for submitting comments.     E-mail: Address to regcomments@ncua.gov. Include ``[Your 
`[Your 
name] Comments on Proposed Rule Part 716 (Model Form for Privacy 
Notice)'' in the e-mail subject line.
     Fax: (703) 518-6319. Use the subject line described above 
for e-mail.
     Mail: Address to Mary Rupp, Secretary of the Board, 
National Credit Union Administration, 1775 Duke Street, Alexandria, 
Virginia 22314-3428.
     Hand Delivery/Courier: Same as mail address.
    Federal Trade Commission: All persons are invited to submit written 
comments. Comments should refer to ``Model Privacy Form, FTC File No. 
P034815'' to facilitate the organization of comments. Comments filed in 
paper form should include this reference both in the text and on the 
envelope, and should be mailed or delivered to: Federal Trade 
Commission/Office of the Secretary, Room 135 (Annex C), 600 
Pennsylvania Avenue, NW., Washington, DC 20580. Because paper mail in 
the Washington area and at the Commission is subject to delay, please 
consider submitting your comments in electronic form, as prescribed 
below. If the comment contains any material for which confidential 
treatment is requested, it must be filed in paper (rather than 
electronic) form, and the first page of the document must be clearly 
labeled ``Confidential.'' \1\ The FTC is requesting that any comment 
filed in paper form be sent by courier or overnight service, if 
possible.
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    \1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must also 
be accompanied by an explicit request for confidential treatment, 
including the factual and legal basis for the request, and must 
identify the specific portions of the comment to be withheld from 
the public record. The request will be granted or denied by the 
Commission's General Counsel, consistent with applicable law and the 
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
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    Comments filed in electronic form should be submitted by using the 
following Web link: https://secure.commentworks.com/ftc-modelform (and 

following the instructions on the Web-based form). To ensure that the 
Commission considers an electronic comment, you must file it on the 
Web-based form at the Web link https://secure.commentworks.com/ftc-modelform.
 If this notice appears at www.regulations.gov, you may also 

file an electronic comment through that

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Web site. The Commission will consider all comments that 
http://www.regulations.gov forwards to it.\2\ The FTC Act and other laws the 

Commission administers permit the collection of public comments to 
consider and use in this proceeding as appropriate. All timely and 
responsive public comments with all required fields completed, whether 
filed in paper or electronic form, will be considered by the 
Commission, and will be available to the public on the FTC Web site, to 
the extent practicable, at http://www.ftc.gov. As a matter of 

discretion, the Commission makes every effort to remove home contact 
information for individuals it receives from the public comments before 
placing those comments on the FTC Web site. More information, including 
routine uses permitted by the Privacy Act, may be found in the FTC's 
privacy policy, at http://www.ftc.gov/ftc/privacy.htm.

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    \2\ An electronic comment can be filed by (1) clicking on http://www.regulations.gov
; (2) selecting ``Federal Trade Commission'' at 

``Search for Open Regulations;'' (3) locating the summary of this 
notice; (4) clicking on ``Submit a Comment on this Regulation;'' and 
(5) completing the form. For a given electronic comment, any 
information placed in the following fields--``Title,'' ``First 
Name,'' ``Last Name,'' ``Organization Name,'' ``State,'' 
``Comment,'' and ``Attachment''--will be publicly available on the 
FTC Web site. The fields marked with an asterisk on the form are 
required in order for the FTC to fully consider a particular 
comment. Commenters may choose not to fill in one or more of these 
fields, but if they do so, their comments may not be considered.
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    Commodity Futures Trading Commission: Comments should be directed 
to Eileen Donovan, Acting Secretary of the Commission, Commodity 
Futures Trading Commission, Three Lafayette Centre, 1155 21st Street, 
NW., Washington, DC 20581. Comments may be sent by facsimile 
transmission to (202) 418-5528 or by e-mail to secretary@cftc.gov.
    Securities and Exchange Commission: Comments may be submitted by 
any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number S7-09-07 and ``Model Privacy Form'' on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov
). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number S7-09-07 and ``Model 
Privacy Form.'' This file number should be included on the subject line 
if e-mail is used. To help us process and review your comments more 
efficiently, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/proposed.shtml
). Comments are also available for public 

inspection and copying in the Commission's Public Reference Room, 100 F 
Street, NE., Washington, DC 20549. All comments received will be posted 
without change; we do not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly.

FOR FURTHER INFORMATION CONTACT: OCC: Amy Friend, Assistant Chief 
Counsel, (202) 874-5200; Heidi Thomas, Special Counsel, Jonathan 
Mitchell, Attorney, Legislative and Regulatory Activities Division, 
(202) 874-5090; David H. Nebhut, Director, Policy Analysis, (202) 874-
5387; or Paul Utterback, NBE Compliance Specialist, (202) 874-4428, 
Office of the Comptroller of the Currency, 250 E Street, SW., 
Washington, DC 20219.
    Board: Adrianne Threatt, Counsel, Legal Division, (202) 452-3554; 
Jeanne Hogarth, Consumer Policies Program Manager, or Krista Ayoub, 
Senior Attorney, or Ky Tran-Trong, Counsel, Division of Consumer and 
Community Affairs, (202) 452-3667; or Michelle E. Shore, Federal 
Reserve Board Clearance Officer, (202) 452-3829 (for Paperwork 
Reduction Act questions only), Board of Governors of the Federal 
Reserve System, 20th Street and Constitution Avenue, NW., Washington, 
DC 20551.
    FDIC: David P. Lafleur, Senior Policy Analyst, Compliance Section, 
Division of Supervision and Consumer Protection, (202) 898-6569; or 
Ruth R. Amberg, Senior Counsel, (202) 898-3736, or Kimberly A. Stock, 
Attorney, (202) 898-3815, Legal Division; Federal Deposit Insurance 
Corporation, 550 17th Street, NW., Washington, DC 20429.
    OTS: Ekita Mitchell, Consumer Regulations Analyst, Examinations, 
Supervision, and Consumer Protection, (202) 906-6451; or Richard 
Bennett, Counsel, Regulations and Legislation Division, (202) 906-7409, 
1700 G Street, NW., Washington, DC 20552.
    NCUA: Regina Metz, Staff Attorney, (703) 518-6561, or Ross Kendall, 
Staff Attorney, Office of General Counsel, (703) 518-6562, National 
Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 
22314-3428.
    FTC: Loretta Garrison, Senior Attorney, Division of Privacy and 
Identity Protection, Bureau of Consumer Protection, (202) 326-3043, 
Federal Trade Commission, 600 Pennsylvania Avenue, NW., Stop NJ-3158, 
Washington, DC 20580.
    CFTC: Laura Richards, Senior Assistant General Counsel, (202) 418-
5126, or Gail B. Scott, Attorney, Office of General Counsel, (202) 418-
5139, Commodity Futures Trading Commission, Three Lafayette Centre, 
1155 21st Street, NW., Washington, DC 20581.
    SEC: Catherine McGuire, Chief Counsel, or Brice Prince, Special 
Counsel, Office of the Chief Counsel, Division of Market Regulation, 
(202) 551-5550; or Penelope Saltzman, Branch Chief, or Vincent Meehan, 
Senior Counsel, Office of Regulatory Policy, Division of Investment 
Management, (202) 551-6792, Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The Agencies are proposing amendments to 
each of their rules (which are consistent and comparable) that 
implement the privacy provisions of the GLB Act: 12 CFR part 40 (OCC); 
12 CFR part 216 (Board); 12 CFR part 332 (FDIC); 12 CFR part 573 (OTS); 
12 CFR part 716 (NCUA); 16 CFR part 313 (FTC); 17 CFR part 160 (CFTC); 
and 17 CFR part 248 (SEC) (collectively, the ``privacy rule'').\3\
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    \3\ Because each Agency's privacy rule has the same section 
numbers, relevant sections will be cited, for example, as ``section 
--.6'' unless otherwise noted.
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I. Background

    The Regulatory Relief Act was enacted on October 13, 2006.\4\ 
Section 728 of the Act directs the Agencies to ``jointly develop a 
model form which may be used, at the option of the financial 
institution, for the provision of disclosures under [section 503 of the 
GLB Act].'' \5\ The Regulatory Relief Act stipulates that the model 
form shall be a safe harbor for financial institutions

[[Page 14943]]

that elect to use it. Section 728 further directs that the model form 
shall:
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    \4\ Pub. L. 109-351 (Oct. 13, 2006), 120 Stat. 1966.
    \5\ Id., adding 15 U.S.C. 6803(e). Section 728 of the Regulatory 
Relief Act directs the agencies named in Section 504(a)(1) of the 
GLB Act, 15 U.S.C. 6804(a)(1), to develop a model form. The CFTC, 
which did not become subject to Title V of the GLB Act until 2000, 
is not named in that section. The Commodity Exchange Act (``CEA'') 
was amended in 2000 by the Commodity Futures Modernization Act of 
2000 to make the CFTC a ``federal functional regulator'' subject to 
the GLB Act Title V. See Section 5g of the CEA, 7 U.S.C. 7b-2. The 
CFTC interprets Section 728 of the Regulatory Relief Act as applying 
to it through Section 5g.
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    (A) Be comprehensible to consumers, with a clear format and design;
    (B) Provide for clear and conspicuous disclosures;
    (C) Enable consumers easily to identify the sharing practices of a 
financial institution and to compare privacy practices among financial 
institutions; and
    (D) Be succinct, and use an easily readable type font.
    The Agencies are required to propose a model form for public 
comment by April 11, 2007.

A. The Gramm-Leach-Bliley Act Privacy Notices

    Subtitle A of title V of the GLB Act, captioned Disclosure of 
Nonpublic Personal Information,\6\ requires each financial institution 
to provide a notice of its privacy policies and practices to its 
customers who are consumers.\7\ In general, the privacy notices must 
describe a financial institution's policies and practices with respect 
to disclosing nonpublic personal information about a consumer to both 
affiliated and nonaffiliated third parties.\8\ The notices also must 
provide a consumer a reasonable opportunity to direct the institution 
generally not to share nonpublic personal information \9\ about the 
consumer (that is, to ``opt out'') with nonaffiliated third parties 
other than as permitted by the statute (for example, sharing for 
everyday business purposes, such as processing transactions and 
maintaining customers' accounts, and in response to properly executed 
governmental requests).\10\ The privacy notice must provide, where 
applicable under the Fair Credit Reporting Act (FCRA), a notice and an 
opportunity for a consumer to opt out of certain information sharing 
among affiliates.\11\
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    \6\ Codified at 15 U.S.C. 6801-6809.
    \7\ 15 U.S.C. 6803(a). A ``customer'' means a consumer who has a 
``customer relationship with a financial institution.'' Privacy 
rule, section --.3(h), SEC section 248.3(j), CFTC section 160.3(k). 
A ``consumer'' is ``an individual who obtains, from a financial 
institution, financial products or services which are to be used 
primarily for personal, family, or household purposes, and also 
means the legal representative of such an individual.'' 15 U.S.C. 
6809(9); privacy rule, section --.3(e), SEC section 248.3(g)(1), 
CFTC section 160.3(h)(1).
    \8\ 15 U.S.C. 6803(a)-(c).
    \9\ 15 U.S.C. 6809(4). ``Nonpublic personal information'' is 
generally defined as personally identifiable financial information 
provided by a consumer to a financial institution, resulting from 
any transaction or any service performed for the consumer, or 
otherwise obtained by the financial institution. See privacy rule, 
sections --.3(n) and (o), SEC sections 248.3(t) and (u), CFTC 
sections 160.3(t) and (u).
    \10\ 15 U.S.C. 6802; privacy rule, sections --.14 and --.15.
    \11\ 15 U.S.C. 1681a(d)(2)(A)(iii) (FCRA); 15 U.S.C. 6803(c)(4) 
(GLB Act).
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    The privacy rule requires a financial institution to provide a 
privacy notice to its customers no later than when a customer 
relationship is formed and annually for as long as the relationship 
continues. The notice must accurately reflect the institution's 
information collection and disclosure practices and must include 
specific information. Section --.6 of the privacy rule requires the 
privacy notice to include the following:
    (1) The categories of nonpublic personal information that the 
institution collects;
    (2) With respect to both current and former customers, the 
categories of nonpublic personal information that it discloses and the 
categories of affiliates and nonaffiliated third parties to whom it 
discloses such information other than as permitted by the exceptions in 
sections --.14 and --.15;
    (3) Where the institution relies on the exception in section --.13 
to share nonpublic personal information (pertaining to joint 
marketing), the categories of information disclosed, and the categories 
of third parties with which the institution has contracted;
    (4) Where applicable, an explanation of the consumer's right under 
section --.10(a) to opt out of the disclosure of nonpublic personal 
information to nonaffiliated third parties and the methods by which the 
consumer may opt out;
    (5) Disclosures made under section 603(d)(2)(A)(iii) of the FCRA 
(pertaining to the ability to opt out of certain sharing with 
affiliates) and the applicable opt-out notice;
    (6) The institution's policies and practices with respect to 
protecting the confidentiality and security of nonpublic personal 
information; and
    (7) Where applicable, a statement that the institution discloses 
nonpublic personal information to nonaffiliated third parties pursuant 
to the section --.14 and --.15 exceptions.
    The privacy rule does not prescribe any specific format or 
standardized wording for these notices. Instead, institutions may 
design their own notices based on their individual practices provided 
they comply with the law and meet the ``clear and conspicuous'' 
standard in the statute and the privacy rule.\12\ The Appendix to the 
privacy rule contains model language (Sample Clauses) that institutions 
may use in privacy notices to satisfy the privacy rule.
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    \12\ 15 U.S.C. 6802, 6803; privacy rule, section --.3(b), SEC 
248.3(c).
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    Financial institutions first were required to distribute privacy 
notices to their customers by July 1, 2001.\13\ Many privacy notices in 
the initial effort were long and complex. In addition, because the 
privacy rule allows institutions flexibility in designing their privacy 
notices, notices have been formatted in various ways and as a result 
have been difficult to compare, even among financial institutions with 
identical privacy policies.
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    \13\ The CFTC was added by Section 5g of the Commodity Exchange 
Act, 7 U.S.C. 7b-2 (as amended by the Commodity Futures 
Modernization Act of 2000), on December 21, 2000, and privacy 
notices were required to be delivered to consumers by March 31, 
2002.
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    In response to broad-based concerns expressed by representatives of 
financial institutions, consumers, privacy advocates, and members of 
Congress, the Agencies conducted a workshop in December 2001 to provide 
a forum to consider how financial institutions could provide more 
useful privacy notices to consumers.\14\ The workshop featured panel 
presentations by financial institutions, consumer advocates, and 
communications experts, and highlighted key communication principles to 
improve the notices. A number of institutions, particularly those with 
complex information-sharing practices, described the challenges they 
faced in explaining their practices and the choices available to 
consumers in a simple fashion while meeting all of the legal 
requirements for notice. Some institutions described results of 
consumer testing and their efforts to make privacy notices clearer and 
more useful to consumers.
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    \14\ Get Noticed: Writing Effective Financial Privacy Notices, 
Interagency Public Workshop (Dec. 4, 2001), workshop transcripts and 
other supporting documents are available at http://www.ftc.gov/bcp/workshops/glb/index.html
.

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    On December 30, 2003, the Agencies published an Advance Notice of 
Proposed Rulemaking to Consider Alternative Forms of Privacy Notices 
under the Gramm-Leach-Bliley Act \15\ (ANPR) to solicit comment on a 
wide range of issues related to improving privacy notices. The Agencies 
sought, for example, comment on issues associated with the format, 
elements, and language used in privacy notices that would make the 
notices more accessible, readable, and useful, and whether to develop a 
model privacy notice that would be short and simple. The Agencies also 
solicited examples of

[[Page 14944]]

forms, model clauses, and other information, such as applicable 
research that has been conducted in this area. The ANPR stated that the 
Agencies expected that consumer testing would be a key component in the 
development of any specific proposals.
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    \15\ See Interagency Proposal to Consider Alternative Forms of 
Privacy Notices Under the Gramm-Leach-Bliley Act, 68 FR 75164 (Dec. 
30, 2003), available at http://www.ftc.gov/os/2003/12/031223anprfinalglbnotices.pdf
.

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    During January and February 2004, the Agencies met with a number of 
interested groups and individuals to discuss the issues raised in the 
ANPR.\16\ The Agencies received forty-four comments in response to the 
ANPR.\17\ While commenters expressed a variety of views on the 
questions posed in the ANPR, many commenters agreed that the Agencies 
should conduct consumer testing before proposing any alternative 
privacy notice.
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    \16\ Summaries of the outside meetings are available at http://www.ftc.gov/privacy/privacyinitiatives/financial_rule_inrp.html
.

    \17\ Public comments to the ANPR are available at http://www.ftc.gov/privacy/privacyinitiatives/financial_rule_inrp.html
.

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B. The Interagency Notice Project

    In the summer of 2004, six Agencies \18\ agreed to launch a project 
to fund consumer research (Notice Project). Their goals were to 
identify barriers to consumer understanding of current privacy notices 
and to develop an alternative privacy notice, or elements of a notice, 
that consumers could more easily use and understand compared to current 
notices. When the Agencies initiated this project, they contemplated 
conducting the consumer research in two sequential phases. The first 
phase was designed as qualitative testing, that is, form development 
research. This research involved a series of in-depth individual 
consumer interviews to develop an alternative privacy notice that would 
be easier for consumers to use and understand. The second phase was 
designed as quantitative testing, to test the effectiveness of the 
alternative privacy notice developed in phase one among a larger number 
of consumers. The first phase has been completed and resulted in the 
model notice we are proposing for comment today. The Agencies expect to 
conduct the second phase of testing after receipt of comments in 
response to this proposal.\19\
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    \18\ The six Agencies are the Board, FDIC, FTC, NCUA, OCC, and 
SEC. Information related to the Notice Project can be found at 
http://www.ftc.gov/privacy/privacyinitiatives/financial_rule_inrp.html
.

    \19\ OTS has joined the Notice Project for the phase two 
research.
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    In September 2004, the six Agencies selected Kleimann Communication 
Group, Inc. (Kleimann) as their contractor for the phase one form 
development research. The research objectives of the Notice Project 
included designing a privacy notice that consumers could understand and 
use, that facilitated comparison of sharing practices and policies 
across privacy notices, and that addressed all relevant legal 
requirements of the GLB Act and FCRA. At the outset of the research, 
the Agencies considered a range of possible options for the notice, 
including a short notice, a layered approach (highlighting key 
information upfront), as well as a longer fully-compliant notice. The 
Agencies limited the project to paper-based notices, reasoning that a 
successful paper notice could be readily adapted to another medium such 
as the Internet. The Agencies used a readable font \20\ and, in order 
not to confound the research findings on comprehension by introducing 
too many variables into the test notice, expressly did not use color, 
logos, or other graphical designs in the test notices. Instead, the 
Agencies focused on formulating and testing content that consumers 
could understand and use in order to develop a short, simplified 
privacy notice that met the research objectives.
---------------------------------------------------------------------------

    \20\ The text of the prototype notice is in 10 point BK Avenir 
Book font.
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    The form development phase culminated in an extensive research 
report released by the Agencies in March 2006. Prepared by Kleimann, 
``Evolution of a Prototype Financial Privacy Notice,'' details the 
process by which the Agencies and Kleimann developed an alternative 
privacy notice.\21\ As explained more fully in the Kleimann Report, 
over a one-year period, Kleimann conducted two focus groups followed by 
a series of 46 in-depth, individual interviews, conducted sequentially 
at seven sites around the country. The interviews tested consumers on 
their ability to comprehend, use, and compare notices based on 
variations in vocabulary, ordering of content, and format. The 
structure, content, ordering of the text information, and title of the 
proposed model form all reflect the research findings in the 
qualitative consumer testing.
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    \21\ See Kleimann Communication Group, Inc., Evolution of a 
Prototype Financial Privacy Notice: A Report on the Form Development 
Project (Feb. 28, 2006) (Kleimann Report). For a copy of the full 
report, go to http://www.ftc.gov/privacy/privacyinitiatives/ftcfinalreport060228.pdf For the executive summary, go to http://.

//.

FTCFinalReportExecutiveSummary.pdf.
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    The Agencies now are proposing the model privacy notice produced in 
the form development phase with some minor revisions (the proposed 
model form) for comment in accordance with the Regulatory Relief Act. 
The Agencies contemplate that the safe harbor for the proposed model 
form will be effective upon publication of the final rule in order to 
permit institutions that elect to use the form to do so immediately. 
The Agencies recognize that institutions may post their privacy notices 
on their Internet sites, as well as deliver paper or email versions to 
their customers. The Agencies contemplate that institutions that post a 
pdf version of the proposed model privacy form may obtain a safe 
harbor, but are requesting comment on whether to develop a Web-based 
design for financial institutions to use on their Internet sites, 
including comment on particular design and/or technical considerations.
    The Agencies believe that the proposed model form meets all the 
requirements of the Act and is easier to understand than most privacy 
notices currently being disseminated. The following section describes 
the proposed model form and highlights some key research findings. For 
more detailed information on the research methodology and the form 
development process, commenters are encouraged to review the full 
Kleimann Report. The Agencies also are proposing instructions on how 
institutions may obtain a safe harbor by using the proposed model form, 
including an explanation of aspects of the form that may and may not be 
varied.\22\ Institutions would not be able to vary content or format, 
other than as described in this proposal, to take advantage of the safe 
harbor. Moreover, institutions would not be able to include any other 
information in the proposed model form nor incorporate this model form 
into any other document.
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    \22\ While the model form would provide a safe harbor, 
institutions could continue to use other types of notices that vary 
from the model form so long as these notices comply with the privacy 
rule. For example, an institution could continue to use a simplified 
notice as described in section --.6(c)(5) (NCUA 716.6(e)(5)) of the 
privacy rule if it does not have affiliates and does not intend to 
share nonpublic personal information with nonaffiliated third 
parties outside of the exceptions provided in sections --.14 and 
--.15.
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II. The Proposed Model Form

A. The Structure

    The proposed model form has either two or three pages, depending on 
whether the financial institution provides an opt-out. While the 
research showed that page one alone was adequate for comprehension and 
usability, page one together with page two address the legal 
requirements of applicable Federal financial privacy laws and increase 
consumer comprehension. Each of the pages of the model form is printed 
separately and

[[Page 14945]]

only on one side of an 8.5 by 11 inch piece of paper because, during 
testing, consumers expressed a preference for the model which allowed 
them to view the information on pages one and two side-by-side.\23\ The 
proposed model form in Appendix A is designed to be customized by each 
financial institution that elects to use it by inserting, for example, 
the institution's name, contact information, and information about 
affiliates, nonaffiliates, or joint marketing partners, if any, with 
which it shares personal information. In addition, the disclosure table 
requires that each institution complete the responses in each of the 
boxes provided in a manner that accurately reflects its information 
sharing policies and practices.
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    \23\ The proposed model form has the opt-out options and 
instructions on a separate page. Staff of certain of the Agencies 
issued Frequently Asked Questions in December 2001 (Privacy FAQs), 
stating that a consumer should be able to detach a mail-in opt-out 
form from a privacy notice without removing text from the privacy 
policy. Otherwise, the institution may violate section --.9(e) of 
the privacy rule, which requires that a privacy policy must be 
provided in such a way that a customer can retain the text of the 
notices or obtain them later. See F.4 of the Privacy FAQs, available 
at http://www.ftc.gov/privacy/glbact/glb-faq.htm.

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    Below is one example of a completed model form for a fictional 
financial institution, Neptune, whose privacy policy provides for broad 
sharing in a manner that triggers consumer opt-out rights. For 
comparison, a second example is also provided for another fictional 
institution, Mars, whose privacy policy limits sharing and does not 
trigger consumer opt-out rights. Each of these institutions uses and 
shares personal information in different ways; thus, their responses in 
the disclosure table vary, as do the descriptions of their affiliates, 
nonaffiliates, or joint marketing partners in the definition 
section.\24\ Importantly, since Mars does not share in a way that 
triggers an opt-out, the opt-out form (page 3 of the proposed model 
form) is not required and so is not included in the Mars notice. Thus, 
not every institution subject to the privacy rule will have to provide 
page three of the model form; only those institutions whose privacy 
practices require delivery of an opt-out notice or those institutions 
that choose to provide opt-outs beyond those required by law.
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    \24\ The Agencies understand that many consumers are not 
familiar with institutions' information sharing practices. During 
the Notice Project's initial research, some consumers expressed 
concern about financial institutions changing their practices and 
policies without adequately informing consumers about such changes. 
A few consumers suggested that, at a minimum, the notices should be 
dated to reflect the most recent revision so consumers would know 
when the notice was last changed and could more easily identify the 
most recent policy statement. Changes to an institution's policy may 
be reflected in a revised notice under section --.8 of the privacy 
rule or in an annual notice. Some institutions highlight changes to 
their privacy notices in some distinctive way, so that consumers can 
readily identify the change. As discussed later in Section V, the 
Agencies invite comment on whether financial institutions should be 
required to alert consumers to changes in an institution's privacy 
practices as part of the proposed model form.

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[[Page 14946]]

Example 1. Neptune Model Privacy Form
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[[Page 14947]]

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[[Page 14948]]

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[[Page 14949]]

Example 2. Mars Model Privacy Form
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[[Page 14950]]

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[[Page 14951]]

Example 3. Illustration of Type Size for the Various Elements of the 
Model Form \25\

     
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    \25\ See infra note and accompanying text. This illustration 
displays the font sizes of the various elements in the model form.
[GRAPHIC] [TIFF OMITTED] TP29MR07.005

B. Page One--Background Information and the Disclosure Table

    Page one of the proposed model form has four parts: (1) The title; 
(2) an introductory section called the ``key frame,'' which provides 
context to help the consumer better understand the required 
disclosures; (3) a table that describes the types of sharing Federal 
law allows, which of those types of sharing the institution actually 
does, and whether the consumer can opt out of any type of the 
institution's sharing; and (4) the institution's contact information.
    The research showed that the title, ``FACTS What Does [name of 
financial

[[Page 14952]]

institution] Do With Your Personal Information,'' is more likely to 
catch consumers' attention so they will read the notice. The title can 
be used by all institutions regardless of their information sharing 
practices.
    The ``key frame,'' with its three short headings--Why, What, and 
How--is included because the research showed that, unless consumers 
have some basic facts about information sharing, they are less likely 
to understand why they are receiving a privacy notice and what to do 
with one. The ``Why'' box tells consumers that Federal law requires 
that the financial institution send the notice. The ``What'' box 
explains the types of personal information financial institutions 
collect and share.\26\ The ``How'' box explains that some information 
sharing is necessary for all institutions in order to provide the 
products and services that consumers request. It also briefly explains 
what information consumers will find in the disclosure table below. The 
research found that these particular headings and the bulleted 
explanations enhanced consumers' understanding of the purpose of the 
notice, enabled them to make an informed decision about the use of 
their personal information, and aided their overall comprehension.
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    \26\ The Agencies recognize that some financial institutions may 
not collect each type of information described in the ``What'' box. 
As reflected in the introductory clause, which states that the 
``information [collected] can include * * *,'' the standardized 
terms are designed to reflect the range of information typically 
collected by financial institutions required to provide privacy 
notices under the GLB Act and FCRA, rather than the specific 
information collected by each particular institution, and therefore, 
are not to be modified to reflect an institution's particular 
practices. The SEC's model privacy form reflects modified terms in 
the ``What'' box that are intended to include the range of 
information typically collected by brokers, dealers, investment 
advisers registered with the Commission, and investment companies.
---------------------------------------------------------------------------

    The disclosure table at the bottom of page one provides information 
about the financial institution's sharing practices. The research found 
that this table is the ``heart'' of the proposed model form, 
``enabl[ing] consumers to understand the details of their financial 
institution's sharing practices in the context of how other financial 
institutions can share. It is critical for comprehension and 
comparability.'' \27\ The table is featured on page one because it is 
one of the most important elements of the model form.
---------------------------------------------------------------------------

    \27\ See Kleimann Report, supra note , at v and 7.
---------------------------------------------------------------------------

    Key research findings were that providing this information in a 
table form greatly increased consumers' ability to readily identify and 
understand an institution's sharing practices and what, if any, choices 
they had to limit any of that sharing, and easily compare these 
practices and choices among institutions. The Agencies asked Kleimann 
to develop and test a ``prose'' version describing information sharing 
practices since such a format would be more comparable to notices 
currently used by financial institutions. However, the research found 
that the table design of the proposed model form outperformed the prose 
design on a variety of measures, including comprehension, 
comparability, and usability.\28\
---------------------------------------------------------------------------

    \28\ See id. at 185, 215, 256.
---------------------------------------------------------------------------

    The disclosure table includes a description of the possible types 
of sharing and uses of personal information and the associated opt-out 
choices that must be disclosed. The opt-out disclosures are required 
under: (1) Section 502(b) of the GLB Act (regarding certain sharing 
with nonaffiliated third parties); (2) section 603(d)(2)(A) of the FCRA 
(regarding sharing of creditworthiness and credit report information 
among affiliates); and (3) section 624 of the FCRA, as added by section 
214 of the Fair and Accurate Credit Transactions Act of 2003 (Fact 
Act), 15 U.S.C. 1681s-3 (use of that information for marketing).\29\ 
The table provides important context about what information sharing a 
financial institution actually does relative to what it could do. The 
research showed that the table, with its standardized content, 
facilitates easy comparison of information sharing practices among 
different institutions. The structure of the disclosure table and the 
reasons for sharing are designed to be consistent for all financial 
institutions.\30\ The institution-specific information lies in the 
answers to the questions within each of the boxes. Accordingly, even if 
a financial institution does not share for one of the reasons listed in 
the table (for example, it has no affiliates and therefore does not 
share with affiliates), the institution could not exclude that reason 
from the table, but would answer ``No'' under ``Does [name of financial 
institution] share?''
---------------------------------------------------------------------------

    \29\ Pub. L. 108-159, 117 Stat. 1952. Section 624 provides that 
information that may be shared among affiliates--including 
transaction and experience information and certain creditworthiness 
information--cannot be used for marketing purposes unless the 
consumer has received a notice of such use and an opportunity to opt 
out, and the consumer does not opt out. The Agencies have included 
language pertaining to this affiliate marketing provision and the 
related opt-out on the notice developed in the consumer research in 
response to comments to the ANPR. While the Agencies have not yet 
issued a final regulation implementing this provision of the FACT 
Act, they are coordinating this rulemaking with the affiliate 
marketing rulemaking to ensure that language addressing the section 
624 opt-out as incorporated in this model form (when finalized) 
would be deemed to comply with the affiliate marketing rule. 
Institutions would not be required to include reference to this 
provision until a final rule for section 624 is issued and becomes 
effective, and only in the event that institutions choose to 
consolidate the 624 notice and opt-out with the GLB Act privacy 
notice.
    \30\ The reasons for sharing are grouped into three main 
categories. The first three reasons describe what financial 
institutions do with their consumers' personal information. The next 
three reasons describe what a financial institution's affiliates do 
with that information. The last reason describes what nonaffiliated 
companies may do with the personal information, other than acting as 
a service provider to or acting jointly with the financial 
institution (that is, outside the exceptions provided in sections 
--.13, --.14, and --.15). This generally means marketing by the 
nonaffiliated company.
---------------------------------------------------------------------------

    The language used in the disclosure table is based on Kleimann's 
research. The simplified phrases describing information sharing 
practices were continually refined through the consumer testing process 
to allow consumers to better understand the information sharing and use 
possibilities. The laws governing the disclosure of consumers' personal 
information are not easily translated into short, comprehensible 
phrases that are also legally precise. Thus, the table in some cases 
uses more easily understandable short-hand terms to describe sharing 
practices required to be in the notice. For example, the table uses the 
term ``everyday business purposes'' to describe the sharing 
contemplated by the exceptions in sections --.14 and --.15 of the 
privacy rule, which does not trigger opt-out rights. The research found 
that consumers understood that ``everyday business purposes'' means 
that companies must share in some basic ways in order to provide the 
financial products or services that consumers request. The table also 
speaks in terms of the institution's own ``marketing purposes'' to 
capture the idea that nearly all, if not all, financial institutions 
share information in connection with marketing their own products and 
services to their customers (for example, with a service provider such 
as a bulk mailer or data processor) in a manner that does not trigger 
an opt-out right. With respect to the reasons for information sharing 
among affiliated companies that track the FCRA provisions \31\ (the 
sharing of ``transaction and experience information'' and the sharing 
of ``other information''), the disclosure table uses ``Information 
about your creditworthiness'' as a short-hand term for the statutory 
term ``other information.''
---------------------------------------------------------------------------

    \31\ See section 603(d)(2)(A) of the FCRA.
---------------------------------------------------------------------------

    The institution's contact information appears at the bottom of page 
one in

[[Page 14953]]

response to consumers' preferences expressed during testing.

C. Page Two--Supplemental Information

    The second page provides additional explanatory information that, 
in combination with page one, ensures that the notice includes all 
elements described in the GLB Act as implemented by the privacy rule. 
There is supplemental information in the form of Frequently Asked 
Questions (FAQs) \32\ at the top and definitions below.\33\ The 
research showed that although consumers generally understood the 
concepts of certain technical words, they found that the four 
definitions on page two provided helpful additional information that 
further clarified the nature and type of information sharing by a 
financial institution. Some of the definitions include institution-
specific information required by the GLB Act. For example, an 
institution that has affiliates must identify the categories of its 
affiliates after the definition. Likewise, an institution that has no 
affiliates can explain after the definition that it does not have 
affiliates.
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    \32\ Note that financial institutions should insert their names 
as indicated in the first three questions in this section.
    \33\ The FAQ box regarding sources of information does not 
permit a financial institution to customize the sources of 
information it collects. As with the standardized terms describing 
information the institution collects on page one, see supra note , 
the disclosure is intended to include the range of information 
sources typically used by institutions subject to the GLB Act and 
FCRA rather than the information sources used by each particular 
institution. The SEC's model form reflects additional terms in this 
box that are intended to include the range of sources of information 
typically used by brokers, dealers, investment advisers registered 
with the Commission, and investment companies.
---------------------------------------------------------------------------

    Examples of institution-specific information are shown for the last 
three definitions in the italicized print in both the Neptune and Mars 
forms. Thus, Neptune has affiliates with which it shares certain 
information and, under the definition of ``affiliates,'' Neptune 
includes information in italics that describes the categories of its 
affiliates. Since Mars has no affiliates, the Mars form states ``Mars 
has no affiliates.''

D. Page Three--The Opt-Out Form

    The third page provides an opt-out form, for use by those financial 
institutions that share in a manner that triggers consumer opt-out 
rights under the GLB Act or FCRA (see the proposed model privacy form 
in Appendix A and the Neptune form). Institutions using the proposed 
model form must include page three in their notices only if they (1) 
share or use information in a manner that triggers an opt-out, or (2) 
choose to provide opt-outs beyond what is required by law.
    The opt-out page lists three common methods for opting out--by 
telephone, on the Web, and by mail--and summarizes the opt-out choices 
available to the consumer in a clear and easy-to-read format that the 
research found consumers appreciated. Financial institutions that 
provide opt-out forms are not required to provide all the opt-out 
choices and methods described in the Neptune opt-out form. The Agencies 
expect that institutions may need to tailor the opt-out page to reflect 
accurately the institution's particular practices.\34\ The model form, 
for example, includes information for the customer's account number as 
a means of identifying both the customer and account to which the opt-
out should apply. Institutions requiring consumers with multiple 
account numbers to list each account number to which the opt-out should 
apply should modify that portion of the form. Institutions requiring 
information other than an account number should modify that portion of 
the form. Institutions that allow more than 30 days from issuing the 
notice may insert that time period in place of the number ``30''. The 
proposed rule accordingly provides instructions explaining permissible 
variations to page three of the Neptune notice.
---------------------------------------------------------------------------

    \34\ See note 29. For institutions that choose to consolidate 
the 624 notice into the model form and offer this opt-out, the 
italicized language accompanying the affiliate sharing opt-out 
choice on page three of the proposed model form is required only if 
an institution wants to limit the time of the opt-out period, with 5 
years the minimum opt-out period required by the statute. Where an 
institution elects to limit the time period for which the opt-out is 
effective, it should look to the Agencies' affiliate marketing rule 
for guidance on the manner and form in which to provide any 
additional notice that would effectively permit a consumer to renew 
or extend the opt-out period.
---------------------------------------------------------------------------

E. Additional Opt-Outs in the Model Form

    The third column in the disclosure table in the proposed model form 
is intended to provide flexibility for financial institutions to 
include additional opt-out choices that are not required by Federal 
law. For example, a financial institution may give its customers the 
opportunity to limit sharing for joint marketing. In that case, the 
financial institution would answer the question ``Can you limit this 
sharing?'' in the far right column with ``Yes (Check your choices, p. 
3)'' and would describe the additional opt-out choice on its opt-out 
form, for example by stating, ``Do not share my personal information 
with other financial institutions to jointly market to me.'' Likewise, 
if a financial institution wanted to offer its customers the 
opportunity to opt out of its own marketing, it could provide for that 
option by answering ``Yes'' in the appropriate box of the disclosure 
table and by describing the opt-out choice on the opt-out form, for 
example by stating ``Do not share [or use] my personal information to 
market to me.'' To obtain the safe harbor for use of the proposed model 
form, an institution that uses the disclosure table to show any 
additional opt-out choice must include the opt-out form on page three 
to provide consumers with a method for opting out. The Agencies 
specifically invite comment on other opt-outs that financial 
institutions may provide, and on whether the Agencies should provide 
model language based on the opt-out provisions provided in the proposed 
model form.

F. Appearance of the Model Form

    In addition to the requirements that the proposed model form be 
comprehensible, clear and conspicuous, and allow for easy comparison of 
privacy practices among financial institutions, the law requires that 
the model form use an easily readable type font. The prototype notice 
developed in the Agencies' phase one research and shown here as the 
proposed model form, reflects consideration of a number of 
typographical factors in the design.\35\ Type size, type style, 
leading, x-height, serif versus sans serif,\36\ upper and lower case 
type, along with the page layout--all play an important role in 
designing a typeface that is highly readable. Consumers who saw the 
prototype notice during the research process commented on how easy the 
type was to see and read.\37\
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    \35\ The prototype notice developed in the consumer research is 
10 on 12 BK Avenir Book. The ``10 on 12'' means that the font size 
is 10 points, and the leading (that is, the additional space between 
the lines of type) is 2 points of spacing.
    \36\ Serif typeface has small strokes at the ends of the lines 
that form each letter. Sans serif typeface does not have those small 
strokes.
    \37\ Example 3 in this proposal illustrates the different font 
sizes used in the prototype notice for the title, headings, and key 
text. Thus, the word ``FACTS'' in the title is in 17-point type; the 
remainder of the title is in 11-point; the Why, Why, How, and 
Contact Us headings are in 14 point; the headings in the disclosure 
table, the reasons in the left column of the disclosure table, and 
the questions in the left column of the FAQs are in 10.5-point; and 
the text in the body of the form is in 10-point. This information 
shows the relative sizes of the various elements of the prototype 
and is intended only as a guide (and not a requirement) to those 
institutions that elect to use the proposed model form so that they 
can design the key elements, such as the headings and title, larger 
than the 10-point font size in the text.

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[[Page 14954]]

    All of these factors together affect the readability of a document. 
Therefore, in considering these various factors for the design of an 
easily readable type font, the Agencies are proposing 10-point font as 
the minimum type size and sufficient spacing between the lines of type 
(leading). The Agencies are further providing general guidance on type 
styles.
    Type size: The readability of type size is highly dependent on the 
selection of the type style. Some styles in 10-point font are more 
readable than others in 12-point font and appear larger because of 
their design. Accordingly, the Agencies are proposing 10-point type 
size as the minimum size for use on the model form.
    Leading: Leading is the spacing between lines of type, measured in 
points. If the line spacing is too narrow, the type is hard to read. In 
such a case, the ascenders (such as the upward line in the letter 
``h'') and descenders (such as the downward line in a ``g'') may touch, 
blending the lines of type and making it much harder to distinguish the 
letters on the page. Research on the legibility of typography indicates 
that people read faster when text is set with 1 to 4 points of 
leading.\38\ The Agencies are proposing a requirement that the leading 
used allow for sufficient spacing between the lines, but are not 
mandating a specific amount. Nevertheless, the Agencies are providing 
these general recommendations for use with the model form: 10- or 11-
point type should have between 1 and 3 points of leading. Twelve-point 
type should have between 2 and 4 points of leading.\39\
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    \38\ Karen A. Schriver, Dynamics In Document Design, 274 (1997).
    \39\ Id. at 262; see also James Hartley, Designing Instructional 
Text (1994); and Barbara Chaparro et al., Reading Online Text: A 
Comparison of Four White Space Layouts, 6(2) (2004).
---------------------------------------------------------------------------

    Type style and ``x''-height: Experts differ on the question of the 
most desirable type style. The model form uses both sans serif and 
``monoweight'' type, and upper and lower case lettering in the body of 
the form. While much of the printed material in the United States and 
western Europe uses serif styles, Web designers are increasingly using 
sans serif type, as they have found that serif type is harder to read 
in this new medium. These changes in Web design are also beginning to 
affect font styles in printed materials. Accordingly, some typography 
designers are now using sans serif typefaces, as well as type with a 
uniform thickness throughout the letter (monoweight typeface), finding 
such typefaces easier to read than those with variable thickness. While 
a variety of type styles would be suitable for the model notice, the 
Agencies caution that institutions that use idiosyncratic fonts or 
highly stylized typefaces will not meet the model form safe harbor 
standard.
    Larger x-height \40\ makes a font appear larger and thus more 
readable, and fonts with larger x-heights are better for smaller text. 
Research shows that our eyes ``scan the top of the letters'' x-heights 
during the normal reading process, so that is where the primary 
identification of each letter takes place.'' \41\ Generally, a font 
with an x-height ratio of around .66 is easier to read.\42\
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    \40\ The ``x-height'' is the height of the lower-case ``x'' in 
relation to full height letters, such as a capital G. X-height is 
critical to type legibility.
    \41\ Erik Spiekermann & E.M. Ginger, Stop Stealing Sheep & Find 
Out How Type Works, 93 (1993).
    \42\ See, e.g., Hewlett-Packard Corporation, Panose 
Classification Metrics Guide (2006), available at http://www.monotypeimaging.com/productsservices/pan2.aspx
.

---------------------------------------------------------------------------

    The Agencies are not mandating a particular type style or x-height 
in order for a financial institution to obtain a safe harbor. 
Nevertheless, based on the research, the Agencies are providing these 
general guidelines for type style in the model form: For typefaces with 
a smaller x-height, 11- or 12-point font should be used; for typefaces 
with a larger x-height, a 10-point font would be sufficient.\43\ Fonts 
that satisfy the type style and x-height guidelines for the proposed 
model form include sans serif fonts such as Tahoma, Century Gothic, 
Myriad, Avant Garde, Bk Avenir Book, ITS Franklin Gothic, Arial, and 
Gill Sans, and serif fonts such as the Chaparral Pro Family, Minion 
Pro, Garamond, Monotype Bodoni, and Monotype Century.\44\
---------------------------------------------------------------------------

    \43\ See Schriver, supra note at 264; see also pp. 258-59.
    \44\ A number of these font styles, including Arial, Tahoma, 
Century Gothic, Garamond, and Bodoni, are preloaded on commonly used 
operating systems with most new personal computers. The other font 
styles are commercially available as well.
---------------------------------------------------------------------------

    For ease of reference, the following table summarizes the 
recommendations discussed here for institutions that choose to use the 
model form and obtain the safe harbor.

----------------------------------------------------------------------------------------------------------------
                If                              Then use                    And use          And use font with
----------------------------------------------------------------------------------------------------------------
Font is 10-point.................  1-3 points leading...............  Monoweight          Large x-height sans
                                                                       typeface.           serif (around .66
                                                                                           ratio).
Font is 11-point.................  1-3 points leading...............  Monoweight          Smaller x-height is
                                                                       typeface.           acceptable; either
                                                                                           serif or sans serif
                                                                                           (less than .66 ratio
                                                                                           is acceptable).
Font is 12-point.................  2-4 points leading...............  Monoweight or       Smaller x-height is
                                                                       variable typeface.  acceptable; either
                                                                                           serif or sans serif
                                                                                           (less than .66 ratio
                                                                                           is acceptable).
----------------------------------------------------------------------------------------------------------------

G. Printing, Logos, and Color

    The Agencies recognize that financial institutions have a strong 
interest in ensuring that documents they provide to the public have a 
distinctive look that may be readily recognized by consumers. Thus, a 
financial institution that uses the proposed model form may include its 
corporate logo on any of the pages, so long as the logo design does not 
interfere with the readability of the model form or space constraints 
of each page.
    The model form used in the consumer testing was printed on 8.5 by 
11 inch non-glossy paper, using varying shades of black ink to achieve 
the black and gray tones in the published prototype. The Agencies 
propose printing each page of the model form on one side of an 8.5 by 
11 inch piece of paper so that each page of the model form can be 
viewed simultaneously. The Agencies seek comment on other formats that 
may achieve the readability and ease of use preferred by consumers.
    The Agencies propose that institutions using the model form use 
white or light color paper (such as cream) with black or suitable 
contrasting color ink. Spot color is permitted to achieve visual 
interest to the model form, so long as the color contrast is 
distinctive and the color does not detract from the form's readability. 
The Agencies seek comment on whether, how, and to what extent 
institutions that elect to use the model form will use logos and/or 
color.

[[Page 14955]]

III. The Sample Clauses

    The proposed model form is a standardized notice that would replace 
the Sample Clauses currently found in Appendix A of the privacy rule. 
It could be used by a financial institution at its option to comply 
with requirements for a clear and conspicuous privacy notice that meets 
the content requirements in sections --.6 and --.7 of the privacy 
rule.\45\ Research to date indicates that the language in the Sample 
Clauses is confusing, and accordingly, the Agencies propose to 
eliminate the Sample Clauses from the privacy rule.
---------------------------------------------------------------------------

    \45\ The Agencies are also proposing conforming amendments to 
sections --.2, --.6, and --.7 of the privacy rule and to the 
Appendix.
---------------------------------------------------------------------------

    However, to ease the compliance burden for those institutions that 
currently have privacy notices based on the Sample Clauses, the 
Agencies are proposing a transition period of one year after which 
financial institutions would no longer obtain a safe harbor by using 
the sample clauses. Privacy notices using the Sample Clauses that are 
delivered to consumers (either in paper form or by electronic delivery 
such as email) or, alternatively, are posted electronically to meet the 
annual notice requirement of section --.9(c), would have a safe harbor 
for one year. Privacy notices using the Sample Clauses that are 
delivered or posted electronically after the one-year transition period 
would no longer obtain the safe harbor. Since institutions are required 
to send notices annually to their customers, annual notices that are 
delivered to consumers (either in paper form or by electronic delivery 
such as email) within the transition period would continue to get the 
safe harbor until the next annual privacy notice is due one year 
later.\46\ The Sample Clauses would be rescinded one year after the 
transition period ends.
---------------------------------------------------------------------------

    \46\ For example, if an institution provides a notice using the 
Sample Clauses on day 361 after the effective date of the rule, it 
would continue to have the safe harbor for one year until its next 
annual notice is due. If an institution provides a notice using the 
Sample Clauses on day 369 after the effective date of the rule, it 
would not obtain the safe harbor. Privacy notices using the Sample 
Clauses posted on an institution's Web site to meet the annual 
notice requirements of section --.9(c) would no longer get the safe 
harbor beginning one year after the final rule becomes effective.
---------------------------------------------------------------------------

    The Agencies note that the SEC's privacy rule does not provide a 
safe harbor for financial institutions that use the Sample Clauses. 
Rather, the Sample Clauses provide guidance concerning the SEC privacy 
rule's application in ordinary circumstances.\47\ Consistent with this 
proposal, the SEC proposes that one year after the end of the 
transition period, the Sample Clauses would be rescinded and no longer 
provide guidance regarding the rule's application to financial 
institutions subject to the SEC's privacy rule.
---------------------------------------------------------------------------

    \47\ See SEC privacy rule, section 248.2(a). The facts and 
circumstances of each individual situation determine whether use of 
the Sample Clauses constitutes compliance with the SEC's privacy 
rule.
---------------------------------------------------------------------------

IV. Proposed Effective Dates

    The provisions of the final rule will be effective [DATE OF 
PUBLICATION OF THE FINAL RULE], with the following exceptions:
    Sec. --.6, paragraph (g) will be effective [DATE OF PUBLICATION OF 
THE FINAL RULE] until [DATE 2 YEARS AFTER PUBLICATION OF THE FINAL 
RULE].
    Newly redesignated Appendix B will be effective [DATE OF 
PUBLICATION OF THE FINAL RULE] until [DATE 2 YEARS AFTER PUBLICATION OF 
THE FINAL RULE].

V. Request for Comments

    The Agencies seek comment on all aspects of the proposed model 
form. The Agencies also invite commenters to submit any additional 
consumer research that may inform the statutory requirements. 
Commenters proposing alternative model notices or elements of a notice 
should submit any available supporting consumer research and 
documentation demonstrating that these alternatives meet the statutory 
requirements. The Agencies expect to do additional testing before 
finalizing a model form. We solicit comment on particular approaches to 
consumer testing for the Agencies to consider.
    The Agencies particularly seek comment on the following issues:
A. Content of the Model Form
    1. Whether a commenter believes particular aspects of the form are 
not clear and conspicuous or comprehensible; and, if so, identify those 
aspects and explain in detail the basis for that conclusion.
    2. Whether financial institutions can accurately disclose their 
information sharing practices by using the standardized provisions and 
vocabulary in the proposed model form, including whether the proposed 
disclosure table provides a financial institution with sufficient 
flexibility to disclose its sharing practices, or any additional opt-
outs it offers, including a detailed explanation of why or why not.
    3. The extent to which modifications to the opt-out form are 
necessary for a financial institution to describe its information 
practices accurately, facilitate consumer use of the opt-out form, or 
offer additional opt-outs, including an explanation of the 
modifications that could be made to page one and/or page three in 
accordance with legal requirements and the intent to keep the table on 
the first page of the form.
    4. The extent to which financial institutions intend to incorporate 
the FCRA section 624 disclosure and opt-out for affiliate marketing in 
the model form, with an explanation of why or why not, and the time 
period they may offer to consumers for the opt-out period.
    5. Whether financial institutions should be required to alert 
consumers to changes in an institution's privacy practices as part of 
the model form.
B. Format of the Model Form
    1. Whether each page of the proposed model form should be required 
to be on a separate piece of paper or whether another format could also 
allow consumers to readily see all the information in the model form at 
the same time.
    2. Whether the guidance on easily readable type font in the 
instructions is helpful and/or sufficient for institutions that use the 
proposed model form.
    3. What size paper would be appropriate for the model form while 
conforming to the guidance for easily readable type font and layout.
    4. Whether financial institutions want to use color and/or logos on 
the proposed model form, and the manner and extent to which they would 
use them without conflicting with readability of the form and space 
requirements.
C. Additional Information
    1. The extent to which financial institutions subject to the GLB 
Act are likely to use the proposed model form, including a detailed 
explanation of why the commenter does or does not expect financial 
institutions to use the form.
    2. Particular approaches to additional consumer testing of the 
model form that the Agencies should consider.
    3. The proposal to replace the Sample Clauses with the proposed 
model form, including--(1) the transition period after which use of 
these clauses no longer qualifies for a safe harbor, or, for 
institutions subject to the SEC's privacy rule, guidance concerning the 
rule's application and (2) whether the Agencies should retain Sample 
Clauses A-1, A-3, and A-7, or develop model clauses to replace those 
sample clauses, for use as a safe harbor only by those institutions 
that provide the simplified notice described in section --.6(c)(5) 
(NCUA 716.6(e)(5)) of the privacy rule.
    4. Whether the Agencies should develop a Web-based design for those

[[Page 14956]]

financial institutions that would like to use an electronic version of 
the proposed model form, and if so, whether institutions have 
suggestions for particular design and/or technical considerations.
    5. Whether the Agencies should develop and make available on their 
Web sites a readily accessible and downloadable model form with 
``fillable'' fields for institutions that wish to use the model form to 
create their own privacy notices; if so, whether institutions would use 
this downloadable model form; and whether it would be useful, 
particularly for smaller institutions that want to obtain the safe 
harbor.
    6. Whether an SEC-regulated entity and an affiliated institution 
regulated by another Agency that intend to provide a joint privacy 
notice should be able to choose to rely on either the SEC model privacy 
form or the model privacy form proposed by the other Agency.\48\
---------------------------------------------------------------------------

    \48\ As noted above, see supra notes 26, 33, the SEC model 
privacy form provides slightly modified terms on pages one and two 
of the model form, which include the range of information typically 
collected by brokers, dealers, investment advisers registered with 
the SEC, and investment companies.
---------------------------------------------------------------------------

    7. The Agencies are aware that many institutions, but not all, 
currently request the customer to provide his or her account number or 
Social Security number (or other personal information, separately or in 
conjunction with such information) in order to opt out, whether by 
toll-free telephone, by electronic means such as e-mail, or by regular 
mail. Do institutions need that information in order to process opt-out 
requests, or would the customer's name and address alone, or the 
customer's name, address, and a truncated account number for a single 
account, be sufficient to process opt-out requests, including for 
customers with multiple accounts at the same institution? Should the 
Agencies consider omitting a line for such information on the opt-out 
page for the model privacy form in order to better protect customers 
and make it easier to opt out? Alternatively, should the opt-out page 
on the model form contain a line for a truncated account number or 
other identifying information?
    The SEC specifically requests the following additional comment from 
its regulated entities:
    1. Whether the standardized provisions and vocabulary in the 
proposed model form for SEC-regulated financial institutions are 
sufficient to allow these financial institutions accurately to disclose 
their information sharing practices, and specifically on the terms used 
in: (a) the description of the types of personal information that may 
be collected (in the key frame on page one), and (b) the examples of 
sources of information collection (in the FAQ on sharing practices on 
page two). The SEC requests that commenters who believe the proposed 
terms are not sufficient suggest alternative or additional terms that 
would be more accurate and explain why those terms would more 
accurately reflect typical information collection and sharing practices 
for brokers, dealers, investment advisers registered with the SEC, and 
investment companies.
    2. Whether institutions should be able to omit certain terms that 
may not apply to their information collection practices or their 
sources of information.

VI. Regulatory Flexibility Act

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612, 
requires an agency to provide an Initial Regulatory Flexibility 
Analysis (``IRFA'') with a proposed rule and a Final Regulatory 
Flexibility Analysis (``FRFA'') with the final rule, if any, unless the 
agency certifies that the rule would not have a significant economic 
impact on a substantial number of small entities. See 5 U.S.C. 603-605. 
Because the use of the model form issued in this proposal is optional, 
the Agencies do not expect that the rule will have a significant 
economic impact on a substantial number of small entities. However, 
because the statute creates a new safe harbor for institutions by 
replacing the Sample Clauses in the current rule, with a model form, we 
have determined that it is appropriate to publish the following IRFA in 
order to inquire into the impact of the proposed rule on small 
entities.

A. Reasons for the Proposed Action

    The Agencies are issuing this proposed rule for comment because the 
Regulatory Relief Act specifically requires them, no later than April 
11, 2007, to publish for comment a model form that financial 
institutions may use as a safe harbor to satisfy their notice 
requirements under the Agencies' existing privacy rule.

B. Objectives of, and Legal Basis for, the Proposed Action

    The goal of the proposed amendments is to satisfy the requirements 
of section 728 of the Regulatory Relief Act, which requires that the 
Agencies propose a model form that is comprehensible, clear and 
conspicuous, and succinct. The final model form that the Agencies adopt 
after reviewing comments would, if properly used, serve as a safe 
harbor for satisfying the privacy rule's requirements regarding content 
of privacy notices. The Act also requires that the proposed model form 
enable consumers easily to identify a financial institution's sharing 
practices and compare it with others.
    As indicated in Section I of this release, the amendments to 
Appendix A of the Agencies' privacy rule are proposed pursuant to the 
authority set forth in Sec.  503 (as amended by section 728 of the 
Regulatory Relief Act) and Sec.  504 of the GLB Act.\49\
---------------------------------------------------------------------------

    \49\ The SEC also is proposing the amendments under section 504 
of the GLB Act [15 U.S.C. 6804], section 23 of the Securities 
Exchange Act of 1934 [15 U.S.C. 78w], section 38(a) of the 
Investment Company Act of 1940 [15 U.S.C. 80a-37(a)], and section 
211 of the Investment Advisers Act of 1940 [15 U.S.C. 80b-11].
    The CFTC also is proposing the amendments under Section 504 of 
the GLB Act [15 U.S.C. 6804], and Sections 5g and 8a(5) of the 
Commodity Exchange Act [7 U.S.C. 7b-2, 12a(5)].
---------------------------------------------------------------------------

C. Small Entities Subject to the Proposed Rule Amendments

    The proposed amendments to Appendix A and conforming amendments to 
sections --.2, --.6, and --.7 of the Agencies' privacy rules could 
potentially affect financial institutions, including financial 
institutions that are small businesses or small organizations, that 
choose to rely on the proposed model privacy form as a safe harbor.
    1. OCC. The OCC estimates that 1,050 insured national banks, 
uninsured national banks and trust companies, and foreign branches and 
agencies are small entities for purpose of the Regulatory Flexibility 
Act.
    2. Board. The Board estimates that 473 state member banks are small 
entities for purposes of the Regulatory Flexibility Act.
    3. FDIC. The FDIC estimates that 3,302 state nonmember banks are 
small entities for purposes of the Regulatory Flexibility Act.
    4. OTS. The OTS estimates that 429 small savings associations are 
small entities for purposes of the Regulatory Flexibility Act.
    5. NCUA. The Regulatory Flexibility Act requires NCUA to prepare an 
analysis to describe any significant economic impact a regulation may 
have on a substantial number of small credit unions (primarily those 
under $10 million in assets). The NCUA estimates that 3,805 credit 
unions are small entities for purposes of the Regulatory Flexibility 
Act.
    6. FTC. Determining a precise estimate of the number of small 
entities that are financial institutions within the meaning of the 
proposed rule is not readily feasible. The GLB Act does not identify 
for purposes of the Commission's jurisdiction any specific

[[Page 14957]]

category of financial institution. In the absence of such information, 
there is no way to estimate precisely the number of affected entities 
that share nonpublic personal information with nonaffiliated third 
parties or that establish customer relationships with consumers and 
therefore assume greater disclosure obligations.
    7. CFTC. The CFTC is unable to determine a precise estimate of its 
registrants that are small entities, or that would be using the model 
form.
    8. SEC. The SEC estimates that 911 broker-dealers, 210 investment 
companies registered with the Commission, and 710 investment advisers 
registered with the Commission are small entities for purposes of the 
Regulatory Flexibility Act.\50\
---------------------------------------------------------------------------

    \50\ For purposes of the Regulatory Flexibility Act, under the 
Securities Exchange Act of 1934 a small entity is a broker or dealer 
that (i) had total capital of less than $500,000 on the date in its 
prior fiscal year as of which its audited financial statements were 
prepared or, if not required to file audited financial statements, 
on the last business day of its prior fiscal year, and (ii) is not 
affiliated with any person that is not a small entity and is not 
affiliated with any person that is not a small entity. 17 CFR 240.0-
1. Under the Investment Company Act of 1940, a ``small entity'' is 
an investment company that, together with other investment companies 
in the same group of related investment companies, has net assets of 
$50 million or less as of the end of its most recent fiscal year. 17 
CFR 270.0-10. Under the Investment Advisers Act of 1940, a small 
entity is an investment adviser that ``(i) manages less than $25 
million in assets, (ii) has total assets of less than $5 million on 
the last day of its most recent fiscal year, and (iii) does not 
control, is not controlled by, and is not under common control with 
another investment adviser that manages $25 million or more in 
assets, or any person that had total assets of $5 million or more on 
the last day of the most recent fiscal year.'' 17 CFR 275.0-7.
---------------------------------------------------------------------------

    Because use of the model privacy form would be entirely voluntary, 
the Agencies have no way to estimate how many small financial 
institutions would use it.\51\ The Agencies expect, however, that small 
financial institutions, particularly those that do not have permanent 
staff available to address compliance matters associated with the 
privacy rule, would be relatively more likely to rely on the model 
privacy form than larger institutions. We believe that most financial 
institutions currently have legal counsel review their privacy notices 
for compliance with the GLB Act, the FCRA, and the privacy rule. We 
believe that a financial institution that uses the model form for its 
privacy notice would need little, if any, review by legal counsel 
because the proposed regulation does not permit institutions to vary 
the form to obtain the benefit of a safe harbor, except as necessary to 
identify their sharing and opt-out policies.
---------------------------------------------------------------------------

    \51\ The Agencies have requested comment on the likelihood that 
financial institutions would use the model privacy form. See supra 
section V.
---------------------------------------------------------------------------

D. Reporting, Recordkeeping, and Other Compliance Requirements

    The proposed rule does not itself impose any additional 
recordkeeping, reporting, disclosure, or compliance requirements. 
Financial institutions, including small entities, have been required to 
provide notice to consumers about the institution's privacy policies 
and practices since July 1, 2001 (or March 31, 2002 in the case of the 
CFTC). The proposed amendments would not affect these requirements and 
financial institutions would be under no obligation to modify their 
current privacy notices as a result of the proposed amendments. 
Instead, the amendments propose a specific model privacy form that a 
financial institution may use to comply with notice requirements under 
the GLB Act, the FCRA (as amended by the FACT Act), and the privacy 
rule. Nonetheless, if the proposed amendments are adopted, some of the 
financial institutions that rely on the Sample Clauses in the current 
privacy rules' appendixes may wish to transition to the proposed model 
form and may incur some small, incremental costs in making this 
transition.\52\ The Agencies expect, however, that the availability of 
a standardized model form would offset these costs because the form's 
standardized formatting and language would make it easier for 
institutions to prepare and revise their privacy policies.
---------------------------------------------------------------------------

    \52\ We believe that institutions review their privacy policies 
annually, and the costs associated with this annual review, 
including professional costs, for compliance are likely to be the 
same as the costs to complete the proposed model form.
---------------------------------------------------------------------------

E. Duplicative, Overlapping, or Conflicting Federal Rules

    We believe there are no federal rules that duplicate, overlap, or 
conflict with the proposed amendments. In fact, the Agencies have 
designed the model form so that a financial institution may use it to 
satisfy disclosure requirements for both the GLB Act and the FCRA (as 
amended by the FACT Act).

F. Significant Alternatives

    The RFA directs the Agencies to consider significant alternatives 
that would accomplish the stated objectives, while minimizing any 
significant adverse impact on small entities. In connection with the 
proposed amendments, we considered the following alternatives:
    1. Different reporting or compliance standards. As noted above, the 
Regulatory Relief Act requires the Agencies to publish ``a'' model form 
that, among other things, will facilitate comparison of the information 
sharing practices of different financial institutions. In light of 
these statutory requirements, the Agencies are proposing only one model 
form, which includes alternative language in some places that allows a 
financial institution to accurately describe its particular information 
sharing practices. The specific model form that the Agencies are 
proposing was developed as part of a careful and thorough consumer 
testing process designed to produce a clear, comprehensible, and 
comparable notice. The proposed model form emerged as the most 
effective of several notice formats considered as part of this testing. 
Although the Agencies know of no other model privacy notice that has 
been developed in this manner, we are specifically inviting comments 
about alternative model notices or elements of notices, along with 
supporting research and documentation. The Agencies will carefully 
consider any such submissions before adopting a final model form.
    2. Clarification, consolidation, or simplification of reporting and 
compliance requirements. The Agencies believe that the proposed model 
form would simplify the reporting requirements for all entities, 
including small entities, that choose to use the model form. We 
anticipate that financial institutions that choose to use the proposed 
model form would spend less time preparing notices than if they had to 
draft one on their own. Because the model form was developed as part of 
a consumer testing process, it is difficult for the Agencies to further 
clarify, consolidate, or simplify the model notice without compromising 
the research findings.
    3. Performance rather than design standards. Section 728 of the 
Regulatory Relief Act specifically requires that the Agencies propose a 
model form. The model form is an alternative means of providing a 
privacy notice that institutions may choose to use. The privacy rule 
does not mandate the format of privacy notices; thus neither the rule 
nor the proposed amendment would impose a design standard.
    4. Exempting small entities. We believe that an exemption for small 
entities would not be appropriate or desirable. The Agencies note that 
the model form is available for use at the discretion of all financial 
institutions, including small institutions. Moreover, two key 
objectives of the proposed model form are that (1) consumers can 
understand an institution's information sharing practices and (2) they 
may more

[[Page 14958]]

easily compare financial institutions' sharing practices and policies 
across privacy notices. An exemption for small entities would directly 
conflict with both of these key objectives, particularly enabling 
comparison across notices.

G. Solicitation of Comments

    We encourage the submission of comments with respect to any aspect 
of this IRFA. In particular, we request comments regarding: (i) The 
number of small entities that would be affected by the proposed 
amendments; (ii) the existence or nature of the potential impact of the 
proposed amendments on small entities discussed in the analysis; (iii) 
how to quantify the impact of the proposed amendments; and (iv) the 
consideration of alternatives. Commenters are asked to describe the 
nature of any impact and provide empirical data supporting the extent 
of the impact. As noted above in Section V, the Agencies specifically 
request comment on whether a downloadable version of the proposed model 
form would be useful for financial institutions, and particularly small 
entities that would like to take advantage of the safe harbor. All 
comments on this IRFA will be considered in the preparation of the 
Final Regulatory Flexibility Analysis, if the proposed amendments are 
adopted.

VII. Paperwork Reduction Act

    The final rules governing the privacy of consumer financial 
information contain disclosures that are considered collections of 
information under the Paperwork Reduction Act (PRA, 44 U.S.C. 3501 et 
seq.). Before the Agencies issued their privacy rules, they obtained 
approval from OMB for the collections. OMB control numbers for the 
collections appear below. These proposed rules do not introduce any new 
collections of information into the Agencies' privacy rules, nor do 
they amend the rules in a way that substantively modifies the 
collections of information that OMB has approved. Therefore, no PRA 
submissions to OMB are required.
    OCC: Control number 1557-0216.
    Board: Control number 7100-0294.
    FDIC: Control number 3064-0136.
    OTS: Control number 1550-0103.
    NCUA: Control number 3133-0163 (NCUA in separate submissions to OMB 
is currently in the process of requesting reinstatement, with revisions 
due to the decrease in the number of respondent credit unions, to this 
number.)
    FTC: Control number 3084-0121.
    SEC: Control number 3235-0537.
    CFTC: Control number 3038-0055.

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 Executive Order 13132 Determination

    The OCC and OTS each has determined that its portion of the 
proposed rulemaking does not have any federalism implications, as 
required by Executive Order 13132.

NCUA Executive Order 13132 Determination

    Executive Order 13132 encourages independent regulatory agencies to 
consider the impact of their actions on State and local interests. In 
adherence to fundamental federalism principles, the NCUA, an 
independent regulatory agency as defined in 44 U.S.C. 3502(5) 
voluntarily complies with the Executive Order. The proposed rule would 
not have substantial direct effects on the States, on the connection 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government. 
The NCUA has determined that this proposed rule does not constitute a 
policy that has federalism implications for purposes of the Executive 
Order.

OCC and OTS Unfunded Mandates Reform Act of 1995 Determination

    Section 202 of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4 (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. However, the Unfunded Mandates 
Act provisions do not apply to regulations that incorporate 
requirements specifically set forth in law. Because this notice of 
proposed rulemaking is issued pursuant to section 728 of the Regulatory 
Relief Act, the OTS and OCC are not required to conduct an Unfunded 
Mandates Analysis for this rulemaking. Nevertheless, 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.

SEC Cost Benefit Analysis

    The SEC is sensitive to the costs and benefits imposed by its 
rules. As discussed above, the amendments the Agencies are proposing 
today would replace the sample clauses included in Regulation S-P's 
Appendix A (17 CFR part 248, appendix A) with a model privacy form that 
financial institutions could choose to provide to consumers. The 
proposed amendments are designed to implement section 728 of the 
Regulatory Relief Act. This Act directs the Agencies to ``jointly 
develop a model form which may be used, at the option of the financial 
institution, for the provision of disclosures under [section 503 of the 
GLB Act].'' Use of the model form would be voluntary so a financial 
institution could itself determine the benefits and costs in deciding 
whether using the model form would be suitable for its business and 
customers. Moreover, a financial institution that elected to use the 
model privacy form would benefit from the safe harbor it provides for 
disclosures required under the GLB Act. There would be no incremental 
costs of the information requirements for the proposed model privacy 
form because the disclosures are already required under Regulation S-P. 
However, financial institutions could incur some personnel costs in 
implementing the proposed model form. We expect these would be minimal 
because the language and format in the form are standardized and 
particularly if the form could be downloaded from a Web site.\53\ 
Financial institutions can only customize very limited sections of the 
model privacy form. Insofar as the Sample Clauses in current Regulation 
S-P may have some value to some financial institutions, their phase-out 
under the proposed amendments to the rule could create some costs to 
those institutions. If financial institutions, including SEC-regulated 
institutions, make widespread use of the model privacy form, we 
anticipate that consumers will benefit from notices that are more 
comprehensible and easier to compare and use.
---------------------------------------------------------------------------

    \53\ We have asked for comment in section V on whether a 
downloadable version of the model form would be useful.

---------------------------------------------------------------------------

[[Page 14959]]

A. Benefits
    We anticipate that brokers, dealers, investment advisers registered 
with the SEC, and investment companies would benefit from the proposed 
model privacy form's standardized formatting and language. The notice 
requirements of Regulation S-P have been effective since July 1, 2001, 
and would not be altered by the proposed amendments, but new brokers, 
dealers, investment companies, and registered investment advisers would 
be able to use the model privacy form without investing the time and 
resources previously necessary to develop their own notices. We believe 
that institutions currently review their Regulation S-P privacy 
policies annually. To the extent that these institutions are required 
to change their policies to reflect changes in their privacy practices, 
they may find it easier to use the proposed model privacy form as a 
revised or annual privacy notice rather than to revise their existing 
notices. In addition, the SEC expects that revisions to an 
institution's privacy policies would be easier to record in the model 
form's standardized format. The SEC also anticipates that a financial 
institution that chooses to use the model notice would need little, if 
any, ongoing review by legal counsel because an institution cannot vary 
the form except as necessary to identify certain specific sharing and 
opt-out policies.
    Appendix A of Regulation S-P currently contains sample clauses that 
the SEC has said provide guidance in ordinary circumstances. The SEC 
has said, however, that the ``facts and circumstances of each 
individual situation'' will determine whether ``use of a sample 
clause'' constitutes compliance.\54\ In contrast, if the proposed 
amendments are adopted, SEC-regulated institutions would benefit from 
the certainty that proper use of the model notice entitles them to a 
safe harbor for disclosures required under the GLB Act and FCRA.
---------------------------------------------------------------------------

    \54\ See 17 CFR 248.2(a).
---------------------------------------------------------------------------

    Finally, as discussed more fully in section I.B above, the proposed 
model form was developed in an extensive consumer research testing 
process that evaluated consumers' ability to comprehend, use, and 
compare privacy notices. The SEC anticipates therefore that if 
financial institutions choose to use the proposed model form, 
consumers' comprehension and their ability to use and compare privacy 
policies would be enhanced. Institutions also might benefit from 
consumers' enhanced ability to understand and use the notices to the 
extent that consumers have more trust and confidence in an 
institution's privacy policies because the consumers understand those 
policies.
B. Costs
    While the proposed amendments would not affect Regulation S-P's 
substantive requirements, and financial institutions would be under no 
obligation to modify their current privacy notices, we believe that 
financial institutions that elect to use the model privacy form could 
incur some small, incremental costs in making the transition from their 
current notices to the proposed model form. These costs could include 
staff time to review the model form and its instructions and complete 
the proposed form. As noted above, we anticipate there would be minimal 
computer costs associated with using the form, particularly if the form 
could be downloaded from a Web site. We also believe that a financial 
institution that would use the model privacy form would need little, if 
any, review by legal counsel because almost all the disclosures in the 
form are mandated. Institution-specific information consists of contact 
information, ``yes'' or ``no'' answers and brief descriptions, as 
necessary, of the types of entities with which they share information. 
Moreover, we believe that financial institutions currently review their 
privacy polices annually, and we anticipate that the costs associated 
with this annual review would likely be the same as the costs of 
completing the model form. Although there may be some costs to firms 
that currently rely on the sample clauses for guidance in preparing 
their privacy notices, we expect those costs to be minimal. As noted 
above, we believe that financial institutions take approximately the 
same time to prepare a notice using the proposed form as they currently 
take to review annual notices. Moreover, the Agencies are proposing to 
give financial institutions one year in which they can continue to rely 
on the Sample Clauses as guidance, which should allow time to minimize 
the costs of transition for institutions that would transition to the 
model privacy form. The SEC requests commenters to provide data on 
these and any other costs of transition or implementation, and to 
specify the type of financial institution (broker, dealer, investment 
adviser registered with the Commission, or investment company) that 
would incur the estimated costs.
    As discussed above, we cannot estimate the number of institutions 
that would take advantage of the safe harbor. Accordingly, we cannot 
estimate the overall costs to broker-dealers, investment advisers 
registered with the Commission, and investment companies that may use 
the proposed model form.
C. Request for Comments
    The SEC requests comment on the potential costs and benefits of the 
proposed amendments to Appendix A of Regulation S-P. The SEC 
specifically requests comment on the costs of each item discussed above 
that institutions could incur in using the model form and whether any 
of those costs would differ if the form were downloadable from a Web 
site. Commenters should specify the type of institution associated with 
estimates of cost and benefits. The SEC encourages commenters to 
identify, discuss, analyze, and supply relevant data regarding any 
additional costs and benefits. For purposes of the Small Business 
Regulatory Enforcement Fairness Act of 1996,\55\ the SEC also requests 
information regarding the potential impact of the proposals on the U.S. 
economy on an annual basis.
---------------------------------------------------------------------------

    \55\ Pub. L. 104-121, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

SEC Consideration of Burden on Competition

    Securities Exchange Act Section 23(a)(2) requires the SEC, in 
adopting rules under that Act, to consider the impact that any such 
rule would have on competition.\56\ Section 23(a)(2) also prohibits the 
SEC from adopting any rule that would impose a burden on competition 
not necessary or appropriate in furtherance of the purposes of the 
Securities Exchange Act.
---------------------------------------------------------------------------

    \56\ See 15 U.S.C. 78w(a)(2).
---------------------------------------------------------------------------

    As discussed above, the proposed amendments to Regulation S-P, 
including the proposed model form, are designed to comply with section 
728 of the Regulatory Relief Act, mandating that the Agencies propose a 
model form that is comprehensible, clear and conspicuous, and succinct. 
If adopted, SEC-regulated institutions would be able to use the model 
form in order to comply with the notice requirements under the GLB Act, 
the FCRA, and Regulation S-P.
    The SEC does not expect the proposed amendments to have a 
significant impact on competition, and believes that any effect on 
competition would be favorable. Use of the proposed model form would be 
voluntary, permitting a financial institution to determine whether 
using the model form would enhance its competitive position. All 
brokers and dealers, investment companies, and registered investment 
advisers would be able to use the model form and take advantage of the 
safe

[[Page 14960]]

harbor. Other financial institutions would be able to use the form and 
take advantage of the safe harbor under comparable rules proposed by 
the other Agencies. Under the Regulatory Relief Act, the Agencies have 
worked in consultation in order to ensure the consistency and 
comparability of the proposed amendments. Therefore, all financial 
institutions would have the same opportunity to use the model form and 
rely on the safe harbor.
    Further, if financial institutions choose to use the proposed model 
form, the proposed amendments could promote competition by enabling 
consumers more easily to understand and compare competing institutions' 
privacy policies. The SEC also anticipates that the proposed model 
form's standardized formatting would reduce the relative burden of 
compliance on smaller financial institutions, allowing them to compete 
more effectively with larger institutions that are more likely to have 
a dedicated compliance staff. As such, the SEC expects any small impact 
on competition caused by the proposed amendments would be beneficial. 
We request comment on whether the proposal, if adopted, would have an 
impact or burden on competition. Commenters are requested to provide 
empirical data and other factual support for their views if possible.

NCUA: The Treasury and General Government Appropriations Act, 1999--
Assessment of Federal Regulations and Policies on Families

    The NCUA has determined that this proposed rule would not affect 
family well-being within the meaning of section 654 of the Treasury and 
General Government Appropriations Act, 1999, Pub. L. 105-277, 112 Stat. 
2681 (1998).

CFTC Cost-Benefit Analysis

    Section 15 of the Commodity Exchange Act requires the CFTC to 
consider the costs and benefits of its action before issuing a new 
regulation under the Act. The CFTC understands that, by its terms, 
section 15 does not require the CFTC to quantify the costs and benefits 
of a new regulation or to determine whether the benefits of the 
proposed regulation outweigh its costs. Nor does it require that each 
proposed rule be analyzed piecemeal or in isolation when that rule is a 
component of a larger package of rules or rule revisions. Rather, 
section 15 simply requires the CFTC to ``consider the costs and 
benefits'' of its action.
    Section 15 further specifies that costs and benefits shall be 
evaluated in light of five broad areas of market and public concern: 
Protection of market participants and the public; efficiency, 
competitiveness, and financial integrity of futures markets; price 
discovery; sound risk management practices; and other public interest 
considerations. Accordingly, the CFTC could in its discretion give 
greater weight to any one of the five enumerated areas of concern and 
could in its discretion determine that, notwithstanding its costs, a 
particular rule was necessary or appropriate to protect the public 
interest or to effectuate any of the provisions or to accomplish any of 
the purposes of the Act.
    The CFTC has considered the costs and benefits of the proposed 
model form as a totality. The form provides a voluntary alternative 
means of complying with existing requirements of the privacy provisions 
of the GLB Act and section 5g of the CEA, and thus imposes no mandatory 
new costs. The CFTC solicits comment on the transitional costs that may 
be incurred by institutions electing to use the model form, including 
costs in addition to those already imposed. The CFTC believes that the 
model form should benefit futures industry consumer customers in better 
understanding a financial institution's privacy policies, and may 
facilitate customers in comparing the privacy policies of financial 
institutions. The Commission invites public comment on its application 
of the cost-benefit provision. Commenters also are invited to submit 
any data that they may have quantifying the costs and benefits of the 
proposed rules with their comment letters.

List of Subjects

12 CFR Part 40

    Banks, banking, Consumer protection, National banks, Privacy, 
Reporting and recordkeeping requirements.

12 CFR Part 216

    Banks, banking, Consumer protection, Foreign banking, Holding 
companies, Privacy, Reporting and recordkeeping requirements.

12 CFR Part 332

    Banks, banking, Consumer protection, Foreign banking, Privacy, 
Reporting and recordkeeping requirements.

12 CFR Part 573

    Consumer protection, Privacy, Reporting and recordkeeping 
requirements, Savings associations.

12 CFR Part 716

    Consumer protection, Credit unions, Privacy, Reporting and 
recordkeeping requirements.

16 CFR Part 313

    Consumer protection, Credit, Privacy, Reporting and recordkeeping 
requirements, Trade practices.

17 CFR Part 160

    Brokers, Consumer protection, Privacy, Reporting and recordkeeping 
requirements.

17 CFR Part 248

    Brokers, Consumer protection, Investment companies, Privacy, 
Reporting and recordkeeping requirements, Securities.

Office of the Comptroller of the Currency

12 CFR Chapter I

Authority and Issuance

    For the reasons set forth in the joint preamble, part 40 of chapter 
I of title 12 of the Code of Federal Regulations is proposed to be 
revised as follows:

PART 40--PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. The authority citation for part 40 continues to read as follows:

    Authority: 12 U.S.C. 93a; 15 U.S.C. 6801 et seq.

    2. Revise Sec.  40.2 to read as follows:

Sec.  40.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  40.6 and 40.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    3. In Sec.  40.6, revise paragraph (f) and add paragraph (g) to 
read as follows:

Sec.  40.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  40.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.

[[Page 14961]]

    4. In Sec.  40.7, add paragraph (i) to read as follows:

Sec.  40.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  40.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

Appendix A to Part 40--Model Privacy Form

A. The Model Privacy Form
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B. General Instructions

1. How the Model Privacy Form Is Used

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 40.6 and 40.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14964]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p.3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 40.14 and 40.15 of this part, the financial 
institution must answer ``Yes'' to the sharing of such information 
and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 40.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 40.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p.3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 40.7 and 40.10(a) of this part. Financial 
institutions that do not share for this reason must answer ``No'' in 
the middle column and ``We don't share'' in the right column. 
Financial institutions that do share for this reason must answer 
``Yes'' in the middle column and ``Yes (check your choices, p. 3)'' 
corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p.3)'' as to the availability of the opt-
out.

3. Page Two

    (a) General instructions for the Definitions. The financial 
institution must customize the space below the last three 
definitions in this section (affiliates, nonafffiliates, and joint 
marketing). This specific information must be in italicized 
lettering to set off the information from the standardized 
definitions.
    (b) Affiliates. As required by section 40.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 40.14 
and 40.15 of this part, the institution must identify the types of 
nonaffiliated third parties with which it shares or state ``[name of 
financial institution] does not share with nonaffiliates so they can 
market to you.'' in italicized lettering where [nonaffiliate 
information] appears. A financial institution that shares with 
nonaffiliated third parties as described here must use, as 
applicable, the following format: ``Nonaffiliates we share with can 
include [list categories of companies such as mortgage companies, 
insurance companies, direct marketing companies, and nonprofit 
organizations].''
    (d) Joint Marketing. As required by section 40.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.

[[Page 14965]]

    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 40--Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

Federal Reserve System

12 CFR Chapter II

Authority and Issuance

    For the reasons set forth in the joint preamble, the Board proposes 
to amend part 216 of chapter II of title 12 of the Code of Federal 
Regulations as follows:

PART 216--PRIVACY OF CONSUMER FINANCIAL INFORMATION (REGULATION P)

    1. The authority citation for part 216 continues to read as 
follows:

    Authority: 15 U.S.C. 6801 et seq.

    2. Revise Sec.  216.2 to read as follows:

Sec.  216.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  216.6 and 216.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    3. In Sec.  216.6, revise paragraph (f) and add paragraph (g) to 
read as follows:

Sec.  216.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  216.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.
    4. In Sec.  216.7, add paragraph (i) to read as follows:

Sec.  216.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  216.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

Appendix A to Part 216--Model Privacy Form

A. The Model Privacy Form

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B. General Instructions

1. How the Model Privacy Form Is Used

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 216.6 and 216.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14969]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p. 3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 216.14 and 216.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 216.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 216.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p. 3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 216.7 and 216.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p. 3)'' as to the availability of the 
opt-out.

3. Page Two

    (a) General instructions for the Definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonafffiliates, 
and joint marketing). This specific information must be in 
italicized lettering to set off the information from the 
standardized definitions.
    (b) Affiliates. As required by section 216.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
216.14 and 216.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (d) Joint Marketing. As required by section 216.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.

[[Page 14970]]

    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 216--Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

Federal Deposit Insurance Corporation

12 CFR Chapter III

Authority and Issuance

    For the reasons set forth in the joint preamble, the Federal 
Deposit Insurance Corporation proposes to amend part 332 of chapter III 
of title 12 of the Code of Federal Regulations as follows:

PART 332--PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. The authority citation for part 332 continues to read as 
follows:

    Authority: 12 U.S.C. 1819 (Seventh and Tenth); 15 U.S.C. 6801 et 
seq.

    2. Revise Sec.  332.2 to read as follows:

Sec.  332.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  332.6 and 332.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    3. In Sec.  332.6, revise paragraph (f) and add paragraph (g) to 
read as follows:

Sec.  332.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  332.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.
    4. In Sec.  332.7 add paragraph (i) to read as follows:

Sec.  332.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  332.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

Appendix A to Part 332--Model Privacy Form

A. The Model Privacy Form

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[GRAPHIC] [TIFF OMITTED] TP29MR07.014

B. General Instructions

1. How the Model Privacy Form Is Used

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 332.6 and 332.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14974]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p. 3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 332.14 and 332.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 332.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 332.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p. 3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 332.7 and 332.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p. 3)'' as to the availability of the 
opt-out.

3. Page Two

    (a) General instructions for the Definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonaffiliates, 
and joint marketing). This specific information must be in 
italicized lettering to set off the information from the 
standardized definitions.
    (b) Affiliates. As required by section 332.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
332.14 and 332.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (d) Joint Marketing. As required by section 332.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.

[[Page 14975]]

    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 332--Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

Office of Thrift Supervision

12 CFR Chapter V

Authority and Issuance

    For the reasons set forth in the joint preamble, the Office of 
Thrift Supervision proposes to amend part 573 of Chapter V of title 12 
of the Code of Federal Regulations as follows:

PART 573--PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. The authority citation for part 573 continues to read as 
follows:

    Authority: 12 U.S.C. 1462a; 1463, 1464, 1828; 15 U.S.C. 6801 et 
seq.

    2. Revise Sec.  573.2 to read as follows:

Sec.  573.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  573.6 and 573.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    3. In Sec.  573.6, revise paragraph (f) and add paragraph (g) to 
read as follows:

Sec.  573.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  573.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.
    4. In Sec.  573.7, add paragraph (i) to read as follows:

Sec.  573.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  573.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

Appendix A to Part 573--Model Privacy Form

A. The Model Privacy Form

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B. General Instructions

1. How the Model Privacy Form Is Used

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 573.6 and 573.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14979]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p. 3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 573.14 and 573.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 573.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 573.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p. 3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 573.7 and 573.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p. 3)'' as to the availability of the 
opt-out.

3. Page Two

    (a) General instructions for the Definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonafffiliates, 
and joint marketing). This specific information must be in 
italicized lettering to set off the information from the 
standardized definitions.
    (b) Affiliates. As required by section 573.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
573.14 and 573.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (d) Joint Marketing. As required by section 573.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.

[[Page 14980]]

    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out `` by telephone, on the Web, 
and by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italic, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 573--Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

National Credit Union Administration

12 CFR Chapter V

Authority and Issuance

    For the reasons set forth in the joint preamble, the National 
Credit Union Administration proposes to amend part 716 of Chapter V of 
title 12 of the Code of Federal Regulations as follows:

PART 716--PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. The authority citation for part 716 continues to read as 
follows:

    Authority: 12 U.S.C. 1751 et seq.; 15 U.S.C. 6801 et seq.

    2. Revise Sec.  716.2 to read as follows:

Sec.  716.2  Model privacy form and examples.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  716.6 and 716.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    3. In Sec.  716.6, add paragraphs (f) and (g) to read as follows:

Sec.  716.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  716.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.
    4. In Sec.  716.7 add paragraph (i) to read as follows:

Sec.  716.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  716.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

[[Page 14981]]

Appendix A to Part 716--Model Privacy Form

A. The Model Privacy Form
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B. General Instructions

1. How the Model Privacy Form Is Used

    The model form may be used, at the option of a financial 
institution, including a group of affiliates that use a common 
privacy notice, to meet the content requirements of the privacy 
notice and opt-out notice set forth in sections 716.6 and 716.7 of 
this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14984]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p. 3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 716.14 and 716.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 716.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 716.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p. 3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 716.7 and 716.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p.3)'' as to the availability of the opt-
out.

3. Page Two

    (a) General instructions for the definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonaffiliates, 
and joint marketing). This specific information must be in 
italicized lettering to set off the information from the 
standardized definitions.
    (b) Affiliates. As required by section 716.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
716.14 and 716.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (d) Joint Marketing. As required by section 716.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].'' 

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) Share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-

[[Page 14985]]

out form must be provided on a separate page of the model form.
    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 716--Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

Federal Trade Commission

16 CFR Chapter I

Authority and Issuance

    For the reasons set forth in the joint preamble, the Federal Trade 
Commission proposes to amend part 313 of chapter I of title 16 of the 
Code of Federal Regulations as follows:

PART 313--PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. The authority citation for part 313 continues to read as 
follows:

    Authority: 15 U.S.C. 6801 et seq.
    2. Revise Sec.  313.2 to read as follows:

Sec.  313.2  Model privacy form and rules of construction.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  313.6 and 313.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    (c) Compliance. For non-federally insured credit unions, compliance 
with an example contained in 12 CFR part 716, to the extent applicable, 
constitutes compliance with this part. For intrastate securities 
broker-dealers and investment advisors not registered with the 
Securities and Exchange Commission, compliance with an example 
contained in 17 CFR part 248, to the extent applicable, constitutes 
compliance with this part.
    3. In Sec.  313.6, revise paragraph (f) and add paragraph (g) to 
read as follows:

Sec.  313.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  313.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.
    4. In Sec.  313.7 add paragraph (i) to read as follows:

Sec.  313.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  313.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

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Appendix A to Part 313--Model Privacy Form

A. The Model Privacy Form
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B. General Instructions

1. How the model privacy form is used.

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 313.6 and 313.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14989]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p. 3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 313.14 and 313.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 313.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 313.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p. 3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 313.7 and 313.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p. 3)'' as to the availability of the 
opt-out.
    3. Page Two
    (a) General instructions for the Definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonafffiliates, 
and joint marketing). This specific information must be in 
italicized lettering to set off the information from the 
standardized definitions.
    (b) Affiliates. As required by section 313.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
313.14 and 313.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].'' 
    (d) Joint Marketing. As required by section 313.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.

[[Page 14990]]

    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 313-Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

Commodity Futures Trading Commission

17 CFR Chapter I

Authority and Issuance

    For the reasons set forth in the joint preamble, the Commodity 
Futures Trading Commission proposes to amend part 160 of chapter I of 
title 17 of the Code of Federal Regulations as follows:

PART 160--PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. The authority citation for part 160 continues to read as 
follows:

    Authority: 7 U.S.C. 7b-2 and 12a(5); 15 U.S.C. 6801 et seq.

    2. Revise Sec.  160.2 to read as follows:

Sec.  160.2  Model privacy form and rules of construction.

    (a) Model privacy form. Use of the model privacy form in Appendix A 
of this part, consistent with the instructions in Appendix A, 
constitutes compliance with the notice content requirements of 
Sec. Sec.  160.6 and 160.7 of this part, although use of the model 
privacy form is not required.
    (b) Examples. The examples in this part are not exclusive. 
Compliance with an example, to the extent applicable, constitutes 
compliance with this part.
    (c) Substituted compliance.
    (1) Any person or entity otherwise subject to this part that is 
subject to and in compliance with the Securities and Exchange 
Commission Regulation S-P, 17 CFR part 248, will be deemed to be in 
compliance with this part.
    (2) Any commodity trading advisor otherwise subject to this part 
that is registered or required to be registered as an investment 
adviser in the state in which it maintains its principal office and 
place of business as defined in Sec.  275.203A-3 of this title, and 
that is subject to and in compliance with 16 CFR part 313, will be 
deemed to be in compliance with this part.
    3. In Sec.  160.6, revise paragraph (f) and add paragraph (g) to 
read as follows:

Sec.  160.6  Information to be included in privacy notices.

* * * * *
    (f) Model privacy form. Pursuant to Sec.  160.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. Use of a sample clause in a privacy notice provided on or before 
[DATE ONE YEAR FOLLOWING THE DATE OF PUBLICATION OF THE FINAL RULE], to 
the extent applicable, constitutes compliance with this part.
    4. In Sec.  160.7 add paragraph (i) to read as follows:

Sec.  160.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model privacy form. Pursuant to Sec.  160.2(a) of this part, a 
model privacy form that meets the notice content requirements of this 
section is included in Appendix A of this part.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A as Appendix B.
    6. Add new Appendix A to read as follows:

Appendix A to Part 160--Model Privacy Form

A. The Model Privacy Form

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B. General Instructions

1. How the Model Privacy Form Is Used

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 160.6 and 160.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681-1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The Contents of the Model Privacy Form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.
    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

[[Page 14994]]

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p.3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 160.14 and 160.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 160.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 160.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes `` 
information about transactions and experiences. This provision 
applies to sharing of certain information with an institution's 
affiliates, as contemplated by sections 603(d)(2)(A) (i) and (ii) of 
the FCRA. The financial institution must answer ``Yes'' or ``No'' in 
the middle column. An institution that does not share for this 
reason must answer ``We don't share'' in the right column. An 
institution that does not have any affiliates will also use this 
answer. Institutions that share for this reason may or may not elect 
to provide an opt-out and must provide the corresponding answer in 
the right column as described in paragraph C.2.(a) of this 
Instruction.
    (5) For our affiliates' everyday business purposes `` 
information about creditworthiness. This provision applies to the 
sharing of certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
model form to satisfy their obligations under this part must include 
this reason for sharing as set forth in the model form in order to 
obtain the benefit of the safe harbor. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p.3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 160.7 and 160.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p.3)'' as to the availability of the opt-
out.

3. Page Two

    (a) General instructions for the Definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonafffiliates, 
and joint marketing). This specific information must be in 
italicized lettering to set off the information from the 
standardized definitions.
    (b) Affiliates. As required by section 160.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
160.14 and 160.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (d) Joint Marketing. As required by section 160.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) Share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.

[[Page 14995]]

    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    7. Amend newly redesignated Appendix B by adding a new sentence 
immediately after the heading:

Appendix B to Part 160--Sample Clauses

    This Appendix only applies to privacy notices provided until the 
date that is on or before one year following the date of final 
publication of this rule. * * *
* * * * *

Securities and Exchange Commission

Statutory Authority

    The Commission is proposing to amend Regulation S-P pursuant to 
authority set forth in section 728 of the Regulatory Relief Act [Pub. 
L. 109-351], section 504 of the GLB Act [15 U.S.C. 6804], section 23 of 
the Securities Exchange Act [15 U.S.C. 78w], section 38(a) of the 
Investment Company Act [15 U.S.C. 80a-37(a)], and section 211 of the 
Investment Advisers Act [15 U.S.C. 80b-11].

Text of Proposed Amendments

    For the reasons set forth in the preamble, the Commission proposes 
to amend Title 17, Chapter II of the Code of Federal Regulations as 
follows:

PART 248--REGULATION S-P: PRIVACY OF CONSUMER FINANCIAL INFORMATION

    1. Revise the authority citation for part 248 to read as follows:

    Authority: 15 U.S.C. 78q; 78w; 78mm; 80a-30(a); 80a-37; 80b-4; 
80b-11; 1681w; and 6801-6809.

    2. Revise Sec.  248.2 to read as follows:

Sec.  248.2  Model privacy form; rule of construction.

    (a) Model privacy form. Use of Form S-P (see Appendix A of this 
part), consistent with the instructions to the form, constitutes 
compliance with the notice content requirements of Sec. Sec.  248.6 and 
248.7 of this part, although use of Form S-P is not required.
    (b) Examples. The examples in this part provide guidance concerning 
the rule's application in ordinary circumstances. The facts and 
circumstances of each individual situation, however, will determine 
whether compliance with an example, to the extent practicable, 
constitutes compliance with this part.
    (c) Substituted compliance with CFTC financial privacy rules by 
futures commission merchants and introducing brokers. Except with 
respect to Sec.  248.30(b), any futures commission merchant or 
introducing broker (as those terms are defined in the Commodity 
Exchange Act (7 U.S.C. 1, et seq.)) registered by notice with the 
Commission for the purpose of conducting business in security futures 
products pursuant to section 15(b)(11)(A) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o(b)(11)(A)) that is subject to and in 
compliance with the financial privacy rules of the Commodity Futures 
Trading Commission (17 CFR part 160) will be deemed to be in compliance 
with this part.
* * * * *
    3. Amend Sec.  248.6 by revising paragraph (f) and adding paragraph 
(g) to read as follows:

Sec.  248.6  Information to be included in privacy notices.

* * * * *
    (f) Model Form S-P. Pursuant to Sec.  248.2(a) and Appendix A of 
this part, Form S-P meets the notice content requirements of this 
section.
    (g) Sample clauses. Sample clauses illustrating some of the notice 
content required by this section are included in Appendix B of this 
part. The sample clauses in Appendix B of this part provide guidance 
concerning the rule's application in ordinary circumstances in a 
privacy notice provided on or before [ONE YEAR FOLLOWING THE DATE OF 
PUBLICATION OF THE FINAL RULE]. The facts and circumstances of each 
individual situation, however, will determine whether compliance with a 
sample clause constitutes compliance with this part.
    4. Amend Sec.  248.7 by adding paragraph (i) to read as follows:

Sec.  248.7  Form of opt-out notice to consumers; opt-out methods.

* * * * *
    (i) Model Form S-P. Pursuant to Sec.  248.2(a) and Appendix A of 
this part, Form S-P meets the notice content requirements of this 
section.

Appendix A [Redesignated as Appendix B]

    5. Redesignate Appendix A to Part 248 as Appendix B.
    6. Add new Appendix A to read as follows:

Appendix A to Part 248--Form S-P

    (1) Any person may obtain a copy of Form S-P prescribed for use 
in this part by written request to the Securities and Exchange 
Commission, 100 F Street, NE., Washington, DC 20549. Any person also 
may view this form at: [Web site URL].
    (2) Use of Form S-P by brokers, dealers, and investment 
companies, and investment

[[Page 14996]]

advisers registered with the Commission constitutes compliance with 
the notice content requirements of Sec. Sec.  248.6 and 248.7 of 
this part.
    7. Form S-P (referenced in Appendix A of this part) is added to 
read as follows:

    Note: The text of Form S-P does not, and this amendment will 
not, appear in the Code of Federal Regulations.

Securities and Exchange Commission--Form S-P

A. Model Privacy Form
[GRAPHIC] [TIFF OMITTED] TP29MR07.027

[[Page 14997]]

[GRAPHIC] [TIFF OMITTED] TP29MR07.028

[[Page 14998]]

[GRAPHIC] [TIFF OMITTED] TP29MR07.029

B. General Instructions

1. How the Model Privacy Form is Used

    The model form may be used, at the option of a financial 
institution, including a group of financial holding company 
affiliates that use a common privacy notice, to meet the content 
requirements of the privacy notice and opt-out notice set forth in 
sections 248.6 and 248.7 of this part.
    (Note that disclosure of certain information, such as assets, 
income, and information from a consumer reporting agency, may give 
rise to obligations under the Fair Credit Reporting Act [15 U.S.C. 
1681--1681x] (FCRA), such as a requirement to permit a consumer to 
opt out of disclosures to affiliates or designation as a consumer 
reporting agency if disclosures are made to nonaffiliated third 
parties.)

2. The contents of the model privacy form

    The model form consists of two or three pages, depending on 
whether a financial institution shares in a manner that requires it 
to provide a third page with opt-out information.
    (a) Page One. The first page consists of the following 
components:
    (1) The title.
    (2) The key frame (Why?, What?, How?).
    (3) The disclosure table (``Reasons we can share your personal 
information'').
    (4) Contact information.
    (b) Page Two. The second page consists of the following 
components:
    (1) The title.
    (2) The Frequently Asked Questions on sharing practices.
    (3) The definitions.
    (c) Page Three. The third page consists of a financial 
institution's opt-out form.

3. The Format of the Model Privacy Form

    The model form is a standardized form, including page layout, 
page content, format, style, pagination, and shading. No other 
information may be included in the model form, and the model form 
may be modified only as described below.
    (a) Easily readable type font. Financial institutions that use 
the model form must use an easily readable type font. Easily 
readable type font includes a minimum of 10-point font and 
sufficient spacing between the lines of type.
    (b) Logo. A financial institution may include a corporate logo 
on any page of the notice, so long as it does not interfere with the 
readability of the model form or the space constraints of each page.

[[Page 14999]]

    (c) Page size and orientation. Each page of the model form must 
be printed on one side of an 8.5 by 11 inch paper in portrait 
orientation.
    (d) Color. The model form may be printed on white or light color 
paper (such as cream) with black or suitable contrasting color ink. 
Spot color may be used to achieve visual interest, so long as the 
color contrast is distinctive and the color does not detract from 
the readability of the model form.

C. Information Required in the Model Privacy Form

    The model form is a standardized form, and institutions seeking 
to obtain the safe harbor through use of the model form may modify 
the form only as described below:

1. Name of the Institution or Group of Affiliated Institutions 
Providing the Notice

    Include the name of the financial institution or group of 
affiliated institutions providing the notice on the form wherever 
[name of financial institution] appears. Contact information, such 
as the institution's toll-free telephone number, Web address, or 
mailing address, or other contact information, should be inserted as 
appropriate, wherever [toll-free telephone] or [web address] or 
[mailing address] appear.

2. Page One

    (a) General instructions for the disclosure table. There are 
reasons for sharing or using personal information listed in the left 
column of the disclosure table. Each of these reasons correlates to 
certain legal provisions described below. In the middle column, each 
institution must provide a ``Yes'' or ``No'' response in each box 
that accurately reflects its information sharing policies and 
practices with respect to the reason listed on the left. Each 
institution also must complete each box in the right column as to 
whether a consumer can limit such sharing. If an institution answers 
``No'' to sharing for a particular reason in the middle column, it 
must answer ``We don't share'' in the corresponding right column. If 
an institution answers ``Yes'' to sharing for a particular reason in 
the middle column, it must, in the right column, answer either 
``No'' if it does not offer an opt-out or ``Yes (Check your choices, 
p.3)'' if it does offer an opt-out. Except for the sixth row (``For 
our affiliates to market to you''), an institution must list all 
reasons for sharing, and complete the middle and right columns of 
the disclosure table.
    (b) Specific disclosures and corresponding legal provisions.
    (1) For our everyday business purposes. Because all financial 
institutions share information for everyday business purposes, as 
contemplated by sections 248.14 and 248.15 of this part, the 
financial institution must answer ``Yes'' to the sharing of such 
information and ``No'' to the availability of an opt-out.
    (2) For our marketing purposes. The financial institution must 
answer ``Yes'' or ``No'' in the middle column. An institution that 
does not share for this reason must answer ``We don't share'' in the 
right column. An institution that shares for this reason may or may 
not elect to provide an opt-out and must provide the corresponding 
answer in the right column as described in paragraph C.2.(a) of this 
Instruction. This provision includes service providers contemplated 
by section 248.13 of this part.
    (3) For joint marketing with other financial companies. As 
contemplated by section 248.13 of this part, the financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that shares for 
this reason may or may not elect to provide an opt-out and must 
provide the corresponding answer in the right column as described in 
paragraph C.2.(a) of this Instruction.
    (4) For our affiliates' everyday business purposes--information 
about transactions and experiences. This provision applies to 
sharing of certain information with an institution's affiliates, as 
contemplated by sections 603(d)(2)(A)(i) and (ii) of the FCRA. The 
financial institution must answer ``Yes'' or ``No'' in the middle 
column. An institution that does not share for this reason must 
answer ``We don't share'' in the right column. An institution that 
does not have any affiliates will also use this answer. Institutions 
that share for this reason may or may not elect to provide an opt-
out and must provide the corresponding answer in the right column as 
described in paragraph C.2.(a) of this Instruction.
    (5) For our affiliates' everyday business purposes--information 
about creditworthiness. This provision applies to the sharing of 
certain information with an institution's affiliates, as 
contemplated by section 603(d)(2)(A)(iii) of the FCRA. The financial 
institution must answer ``Yes'' or ``No'' in the middle column. An 
institution that does not share for this reason must answer ``We 
don't share'' in the right column. An institution that does not have 
any affiliates will also use this answer. Institutions that share 
for this reason must provide an opt-out and must provide the 
appropriate answer in the right column as described in paragraph 
C.2.(a) of this Instruction.
    (6) For our affiliates to market to you. This provision applies 
to information shared among affiliates that is used by those 
affiliates for marketing, as contemplated by section 624 of the 
FCRA. Following the effective date of the rules implementing section 
624, institutions that elect to incorporate this provision into the 
notice required under this part must include this reason for sharing 
as set forth in the model form. Institutions whose affiliates 
receive such information and use it for marketing must answer 
``Yes'' in the middle column, and ``Yes (Check your choices, p.3)'' 
in the right column corresponding to the availability of an opt-out. 
Institutions whose affiliates receive such information and do not 
use it for marketing may elect to include this provision in the 
model form and answer ``No'' in the middle column and ``We don't 
share'' in the right column; however, institutions whose affiliates 
receive such information and do not use it for marketing are not 
required to use this provision. Institutions that do not have 
affiliates and elect to include this provision in their notice will 
answer ``No'' in the middle column and ``We don't share'' in the 
right column.
    (7) For nonaffiliates to market to you. This provision applies 
to sharing under sections 248.7 and 248.10(a) of this part. 
Financial institutions that do not share for this reason must answer 
``No'' in the middle column and ``We don't share'' in the right 
column. Financial institutions that do share for this reason must 
answer ``Yes'' in the middle column and ``Yes (check your choices, 
p. 3)'' corresponding to the availability of an opt-out.
    (8) Additional opt-outs. A financial institution may customize 
the model form to offer opt-outs beyond those required under Federal 
law, so long as the additional information falls within the space 
constraints of the model form. If the institution chooses to offer 
its customers an opt-out for its own marketing or for joint 
marketing, for example, it can provide for that option by stating: 
``Yes (Check your choices, p.3)'' as to the availability of the opt-
out.

3. Page Two

    (a) General instructions for the Definitions.
    The financial institution must customize the space below the 
last three definitions in this section (affiliates, nonafffiliates, 
and joint marketing).
    This specific information must be in italicized lettering to set 
off the information from the standardized definitions.
    (b) Affiliates. As required by section 248.6(a)(3) of this part, 
the financial institution must identify the categories of its 
affiliates or state ``[name of financial institution] has no 
affiliates'' in italicized lettering where [affiliate information] 
appears. A financial institution that shares with affiliates must 
use, as applicable, the following format: ``Our affiliates include 
companies with a [name of financial institution] name; financial 
companies such as [list companies]; and nonfinancial companies, such 
as [list companies].''
    (c) Nonaffiliates. If the financial institution shares with 
nonaffiliated third parties outside the exceptions in sections 
248.14 and 248.15 of this part, the institution must identify the 
types of nonaffiliated third parties with which it shares or state 
``[name of financial institution] does not share with nonaffiliates 
so they can market to you.'' in italicized lettering where 
[nonaffiliate information] appears. A financial institution that 
shares with nonaffiliated third parties as described here must use, 
as applicable, the following format: ``Nonaffiliates we share with 
can include [list categories of companies such as mortgage 
companies, insurance companies, direct marketing companies, and 
nonprofit organizations].''
    (d) Joint Marketing. As required by section 248.13 of this part, 
the financial institution must identify the types of financial 
institutions with which it engages in joint marketing or state 
``[name of financial institution] doesn't jointly market.'' in 
italicized lettering where [joint marketing] appears. A financial 
institution that shares with joint marketing partners must use, as 
applicable, the following format: ``Our joint marketing partners 
include [list categories of companies such as credit card 
companies].''

[[Page 15000]]

4. Page Three

    Opt-out form. Financial institutions must use page three only if 
they: (1) Share or use information in a manner that triggers an opt-
out; or (2) choose to provide an opt-out (as disclosed in the table 
on page 1) in addition to what is required by law. The model opt-out 
form must be provided on a separate page of the model form.
    (a) Contact us. The section describes three common methods by 
which a consumer exercises an opt-out--by telephone, on the Web, and 
by mail. Financial institutions may customize this section to 
provide for the particular opt-out methods and options the 
institution provides. For example, if an institution offers opting 
out by telephone and the Web but not by mail, it would provide only 
telephone and Web information as shown in the model form in the 
``Contact Us'' box. Only institutions that allow more than 30 days 
after providing the notice before sharing information may change the 
number of days in the lower right hand section of the box.
    (b) Check your choices. Institutions must display the applicable 
opt-out options in the ``Check your choices'' box shown on this 
page. If an institution chooses not to offer an opt-out by mail, it 
must delete the boxes for name, address, account number, and mailing 
directions in the lower right-hand corner of the model form. 
Financial institutions that only offer one or two of the opt-out 
options listed on the model form must list only those options from 
the model form that apply to their practices and correspond 
accurately to the disclosures on page one. Thus, if an institution 
does not share in a manner that requires an opt-out for sharing with 
nonaffiliates, it must not include that opt-out option on page three 
of the model form. Institutions requiring information from consumers 
on the opt-out form other than an account number should modify that 
designation in the ``Check your choices'' box. Institutions that 
require customers with multiple accounts to identify each account to 
which the opt-out should apply should modify that portion of the 
model form.
    (c) Section 624 opt-out. If the financial institution's 
affiliates use information for marketing pursuant to section 624 of 
the FCRA, and the institution elects to consolidate that opt-out 
notice in the model form, it must include that disclosure and opt-
out election as shown in the model form. Institutions that elect to 
limit the time for the affiliate marketing opt-out, consistent with 
the requirements of section 624, must adhere to the requirements of 
that section and the Agencies' implementing rule with respect to any 
subsequent notice and opt-out. Institutions that elect to limit the 
opt-out period must include a statement in italics, as shown on the 
model form, that states the period of time for which the opt-out 
applies.
    (d) Additional opt-outs. A financial institution that uses the 
disclosure table to indicate any opt-out choices available to 
consumers beyond those required by Federal law must include those 
opt-outs on page three of the model form. For example, if the 
financial institution discloses in the table that it offers an opt-
out for joint marketing, the institution must revise the opt-out 
form on page three to reflect the availability of an opt-out, such 
as by adding a check-off box with the words ``Do not share my 
personal information with other financial institutions to jointly 
market to me.'' Likewise, if a financial institution chooses to 
offer its customers an opt-out for its marketing, it can provide for 
that option in the disclosure table and on the opt-out form by 
adding a check-off box with the words ``Do not share [or use] my 
personal information to market to me.''

    8. Amend newly designated Appendix B by adding a new sentence 
immediately after the heading to read as follows:

Appendix B to Part 248--Sample Clauses

    This appendix provides guidance only for privacy notices provided 
on or before [ONE YEAR AFTER THE PUBLICATION DATE OF THE FINAL RULE]. * 
* *
* * * * *

    Dated: March 9, 2007.
John C. Dugan,
Comptroller of the Currency.
    By order of the Board of Governors of the Federal Reserve 
System, March 16, 2007.
Jennifer J. Johnson,
Secretary of the Board.
    By order of the Board of Directors.

    Dated at Washington, DC, this 20th day of March, 2007.

Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
    Dated: March 19, 2007.

    By the Office of Thrift Supervision.
John M. Reich,
Director.
    By the National Credit Union Administration Board on March 15, 
2007.
Mary Rupp,
Secretary of the Board.
    The Federal Trade Commission.

    Dated: March 20, 2007.

    By direction of the Commission.
Donald S. Clark,
Secretary.
    Dated: March 20, 2007.
Eileen A. Donovan,
Acting Secretary of the Commodity Futures Trading Commission.
    By the Securities and Exchange Commission.

    Dated: March 20, 2007.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 07-1476 Filed 3-28-07; 8:45 am]

BILLING CODE 4810-33-P