Pursuant to the Fair and Accurate Transactions Act of 2003 (the FACT Act), on October 25, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision (the Banking Agencies) issued final rules with respect to the use by a financial institution of certain information received from an affiliate to market to consumers.
Generally, under the final rules, a financial institution may not obtain certain consumer eligibility information from an affiliate to solicit a consumer unless the (i) the consumer has been given notice that such activity may occur, (ii) the consumer has been given the ability to opt out of such solicitations, and (iii) the consumer has not exercised its opt out right. Pursuant to the regulation, the opt out period must be effective for a period of at least five years and, upon expiration of the opt out, the consumer must be given a renewal notice.
The regulation does not apply to a person using consumer eligibility information: (i) to make solicitations to a consumer with whom the person has a pre-existing business relationship; (ii) to perform services for another affiliate subject to certain conditions; (iii) in response to a communication initiated by the consumer; or (iv) to make a solicitation that has been authorized or requested by the consumer. According to the Banking Agencies’ press release, the Securities and Exchange Commission and the Federal Trade Commission will also issue similar releases.
The final rules are effective on January 1, 2008, and all covered entities must comply with the rules by October 1, 2008. http://www.federalreserve.gov/newsevents/press/bcreg/20071025a.htm