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Last news: January 1, 1970 00:59:59
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Federal Agencies Issue Final Rules On Fighting Identity Theft
February 15, 2008 18:11:40
Several federal regulatory agencies have adopted final rules requiring financial institutions and other creditors to adopt policies aimed at fighting identity theft. The rules require the adoption of an Identity Theft Prevention Program, and took effect January 1, 2008, although covered financial institutions and other creditors have until November 1, 2008 to comply.
The final rules implement sections 114 and 315 of the Fair and Accurate Credit Transactions Act (FACTA), and apply to "each financial institution and creditor that holds any consumer account, or other account for which there is a reasonably foreseeable risk of identity theft." The Program must include reasonable policies and procedures for detecting, preventing, and mitigating identity theft and enable a financial institution or creditor to: - identify relevant patterns, practices, and specific forms of activity that are "red flags" signaling possible identity theft and incorporate those red flags into the Program;
- detect red flags that have been incorporated into the Program;
- respond appropriately to any red flags that are detected to prevent and mitigate identity theft; and
- ensure the program is updated periodically to reflect changes in risks from identity theft.
The federal agencies also are issuing guidelines for financial institutions and creditors to facilitate the formulation and maintenance of a Program that satisfies the requirements of the rules. In addition, the rules require credit and debit card issuers to "assess the validity of notifications of changes of address under certain circumstances." For example, if a request for a change of address is followed closely by a request for an additional or a replacement card on the same account, the card issuer may not honor the request and issue the new card unless the issuer assesses the validity of the change of address request, using one of the methods specified in the rules. The requirements for Identity Theft Prevention Programs will be subject to a great deal of interpretation, and will also be governed to a large extent by the federal regulatory guidelines, when issued. Sheppard Mullin has a great deal of experience in interpreting these types of requirements, and can also assist clients in preparing their Programs. Please contact David Sands at 213.617.5536 or Sherwin Root at 213.617.5465 with any questions.
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Federal Banking Regulators Issue Final Rule On Financial Institutions Affiliate Marketing
February 14, 2008 16:04:02
The five federal financial regulatory agencies have jointly issued final regulations implementing Section 214 of the Fair and Accurate Credit Transactions Act (FACTA), which amends the Fair Credit Reporting Act (FCRA). The regulations allow consumers to opt out and prevent a financial institution from using information provided by an affiliated company to market its products and services to the consumer. These regulations impose requirements for information sharing that exceed the requirements of the Gramm-Leech-Bliley Act, which impose no limitations upon information sharing with affiliates. These new regulations also do not supersede or replace existing provisions in Section 603 of FCRA concerning the consumers right to opt out of allowing consumer information, including credit report or credit information on the consumer taken from other sources, other than transaction and experience information to be shared between affiliates. A financial institutions failure to comply with these regulations may result in the financial institution being treated as a consumer reporting agency under FCRA.
In general, the regulations prohibit a financial institution from using information received from an affiliated institution to solicit a customer unless that customer has been given notice of the intended solicitation and a reasonable opportunity and a simple method by which to opt out of such solicitations - and has chosen not to opt out. The rule applies to information obtained from the consumers transactions or account relationship with the affiliate of the potential advertising institution, any application the consumer has submitted to that affiliate, and any information held by third-party sources such as credit reports, if the information is to be used for marketing purposes. The rule specifies that the opt-out must be valid for at least five years, and after the opt-out period expires, the customer must be given an opportunity to renew the opt out before marketing is permitted. The affiliate that has, or previously had, a business relationship with the consumer must be the one to provide the consumer with notice of the opportunity to opt-out of the marketing effort. The rule contains a number of exceptions to the notice and opt-out requirements, such as situations in which the marketing affiliate has a pre-existing business relationship with the consumer, or is responding to a consumer-initiated request for information. An appendix contains model forms to assist financial institutions in complying with the notice and opt-out requirements. Financial institutions are urged to consider combining the affiliate marketing opt-out notice under these regulations with the annual Gramm-Leech-Bliley privacy notice, so that consumers receive a single notice they can use to review and exercise all privacy opt-outs. The rule took effect January 1, 2008, with a mandatory compliance date of October 1, 2008.
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i-flex develops Islamic banking solutions (The Hindu)
May 5, 2007 20:22:19BANGALORE: Banking and financial services sector provider, i-flex Solutions has developed a customised version of its FLEXCUBE, currently ranked the largest used globally, specifically to meet the needs of Islamic banking. i-flex Chairman ... - [Read more] |
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