FOR IMMEDIATE RELEASE
ICBA Calls New Federal Plan for Financial Privacy Notices “A Step in the Right Direction”
Consumer Testing Needed to Determine Effectiveness
Washington, D.C. (May 29, 2007)—The Independent Community Bankers of America (ICBA) called a federal regulatory proposal to simplify consumer financial privacy notices a step in the right direction and agreed with the government that consumer testing - a step long favored by ICBA - is the best way to ensure the notices give consumers the information they want and need. ICBA made its comments in a letter to eight banking, consumer and financial regulatory agencies.
"Community banks find annual privacy notices unduly complex and often ignored by consumers," said Karen Thomas, ICBA executive vice president and director of government affairs. "This new proposal gets us moving in the right direction to provide plain language privacy notices to consumers."
ICBA strongly recommended that final rules provide guidance and parameters for companies to follow without being overly prescriptive. "A one-size-fits-all approach often leads to unnecessary and unintended consequences," said ICBA in its letter. For example, requiring one-sided 8 ½ by 11 sheets may not be the most effective way to communicate information but will definitely add to the costs of producing the disclosures.
ICBA also asked that the final rules be sufficiently flexible to allow individual companies to present the information in ways that are most meaningful for their own customers. For instance, underlining, use of all capital letters, different font styles, bolding and so forth can all be used effectively to provide clear disclosures. Homogenization through regulation creates an inflexibility that will make the disclosures less effective since all disclosures will look alike and therefore will be less likely to be read by consumers.
Rigid regulatory requirements could also prevent banks from developing new ways to make disclosures more effective and more appealing to consumers. A brightly colored folder would get more attention than a bland 8 ½-by-11 sheet of buff paper. If the forms are so bland that consumers ignore them, the disclosure loses its purpose. And, the more the disclosures look alike, the more difficult it will be for consumers to distinguish individual companies, undermining one of the key goals for the revisions: to make it easier for consumers to compare privacy policies.
Read ICBA's complete letter at www.icba.org.