Opinion ID: 186573
Heading Depth: 2
Heading Rank: 2

Heading: The Commission's Interpretation

Text: 21 Upon the passage of the Act, the FTC, pursuant to the authority granted it in 15 U.S.C. § 6805(a)(7), undertook a rulemaking. In May 2000, the FTC concluded the rulemaking and issued regulations published at 65 Fed.Reg. 33,646 (codified at 16 C.F.R. pt. 313). Although the FTC relied in the first instance on Congress's definition of financial institution as an institution the business of which is engaging in financial activities, the Commission restated the definition: An institution that is significantly engaged in financial activities is a financial institution. 16 C.F.R. § 313.3(k)(1). 22 Like the statute, the regulations at no point describe the statutory or regulatory scheme as governing the practice of law as such. Indeed, the phrase practice of law never appears in part 313, and the word attorneys, while present in two places, appears in the context of describing persons to whom financial institutions can make release of customer information, if authorized, not in the context of defining financial institutions as including attorneys. Nonetheless, the breadth of the FTC's regulation, apparently taken in conjunction with statements to or by news media, caused concern among representatives of the bar. Therefore, various bar associations, including the American Bar Association, made inquiry of the Commission as to whether the Commission was taking a position that privacy provisions of the GLBA and the regulations made pursuant thereto governed attorneys engaged in the practice of law. 23 On April 8, 2002, the Director of the Bureau of Consumer Protection at the Commission sent a letter to the President and the Director of Governmental Affairs of the ABA in response to your correspondence regarding the application of Title V, Subtitle A, of the Gramm-Leach-Bliley Act, 15 U.S.C. 6801 et seq. . . . and the Federal Trade Commission's Rule, Privacy of Consumer Financial Information. . . to attorneys at law. (Citations omitted.) As part of the inquiry, the ABA had also requested exemption from the Act if the Commission purported to regulate the practice of law under the Act. That position has been abandoned by the bar associations during the course of this litigation, but was still a live question between the parties at the time of the FTC's communication to the ABA. Although recognizing that the bar associations' letters had question[ed] the appropriateness and utility of applying the GLB Act's privacy provisions to attorneys engaged in the practice of law, the Director only directly addressed the ABA's request for exemption. However, in rejecting that request, the Director made it plain that the Commission was purporting to regulate attorneys engaged in the practice of their profession and asserted that the GLB Act itself states that entities engaged in `financial activities' are subject to the Act. (emphasis supplied). 24 After some further negotiation, the bar associations brought the present litigation.