Feds propose marketing limitationsMortgagePress.comFACTA,FDIC,FCRA
The Federal Deposit Insurance Corporation, Board of Governors of
the Federal Reserve System, Office of the Comptroller of the
Currency, Office of Thrift Supervision and the National Credit
Union Administration have sought comment on the proposed rules that
implement Section 214 of the Fair and Accurate Credit Transactions
Act of 2003 (FACT Act). Comments were due on Aug. 16.
The FACT Act was signed into law on Dec. 4, 2003. In general,
the FACT Act amends the Fair Credit Reporting Act (FCRA) to enhance
the ability of consumers to combat identity theft, increase the
accuracy of consumer reports and allow consumers to exercise
greater control regarding the type and number of marketing
solicitations they receive. To promote increasingly efficient
national credit markets, the FACT Act establishes uniform national
standards in key areas of regulation regarding consumer report
information. The FACT Act authorizes a number of regulations on a
variety of measures covered in the act. The following notice of
proposed rulemaking (NPR) is authorized by Section 214 of the
The NPR contains the statutory requirement for financial
institutions to provide an opportunity for consumers to opt out of
marketing solicitations that are based on certain information
received from an affiliate. The proposal assigns responsibility for
providing this opt-out to the financial institution that
communicates the information about the consumer to its affiliates.
An opt-out is not required when an affiliated entity that will
market to the consumer:
†Has a pre-existing business relationship with the
†Already provides benefits to the consumer under an
employee benefit plan;
†Responds to a communication initiated by the consumer;
†Responds to an affirmative authorization or request by
The proposed rules contain examples of these exceptions. The
statute requires that a consumer's election to opt out be
applicable for five years. Some financial institutions may wish to
simply make the consumer's opt-out election effective indefinitely.
The NPR allows institutions to choose the method that is most
efficient and least burdensome to their operations. The NPR
contains the technical requirements for the content of opt-out
notices, as well as model forms for institutions.
For more information, visit www.fdic.gov.