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FED ER AL RESERVE BANK O F NEW YORK r Circular No. 8 5 1 0 L February 1, 1979 J RIGHT TO FINANCIAL PRIVACY ACT OF 1978 Proposed Statement of Customer Rights To All Member Banks, and Others Concerned, in the Second Federal Reserve District: Following is the text of a statement issued January 29 by the Board of Governors of the Federal Reserve System: The Federal Reserve Board today proposed for public com ment a statement setting forth the rights to privacy customers of financial institutions have, under a new statute, when a Federal agency seeks financial information about them. The Board asked for com ment b y February 16, 1979. The proposed statement w ould implement a part (sec. 1 1 0 4 (d )) of the Right to Financial Privacy Act of 1978, which becom es effective March 10. The A ct directs the Board to prepare a m odel statement of financial privacy rights for the use of banks, credit unions, credit card issuers, thrift institutions and other financial institutions. Institutions making use of the B oards m odel statement, as finally adopted, to notify their customers of their rights will be deem ed to have com plied with this section of the law. The Board’s proposed statement is attached. In proposing the statement the Board said: Publication of this proposed statement was delayed pending further action on legislative initiatives to limit the applicabilty of section 1 1 0 4 (d ). . . . First, on January 10, 1979 the Board, acting on a resolution from its Consumer Advisory Council, voted to transmit to the Congress a recom m ended amendment . . . that w ould require financial institutions to give a customer the statement of financial privacy rights at the time a Federal agency sought to have access to the customer’s records. Follow ing the Board’s action, members and staff of Congressional committees stated publicly an intention to limit applicability of section 1 10 4 (d ) by means of amendment or amendments that w ould be introduced in the 96th Congress. Then, on January 16, 1979, Senator Proxmire introduced S. 37, which w ould repeal section 1 1 0 4 (d ). . . . There has been no further action in Congress. D epending upon what action Congress may take the Board may, at a later time, be enabled to specify the manner and frequency with which financial institutions should notify customers of their rights under the Act. For the present, the Board is limited to publishing the statement o f information it is required to prepare. Printed below is the text of the proposed statement. Comments thereon should be submitted by February 16 and may be sent to our Consumer Affairs Division. Paul A. V olcker, President. BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM Docket No. R-0197 PROPOSED STATEMENT OF CUSTOMER RIGHTS UNDER THE FINANCIAL PRIVACY ACT AGENCY: The Board of Governors of the Federal Reserve System. ACTION: Proposed Statement of Customer Rights under the “Right to Financial Privacy Act of 1978” . SUMMARY: This Proposed Statement sets forth rights that customers o f financial institutions have under the “Right to Financial Privacy A ct of 1978” (P u blic Law 95-630.) This proposal is being issued in implementation o f section 1 10 4(d ) of the Act, which requires the Board to prepare a m odel State ment of customers’ financial privacy rights. The Act also requires financial institutions to notify cus tomers of their financial privacy rights, and if these institutions use the Board’s Statement for that purpose they will be deem ed to be in com pliance with the A ct’s requirement. The Board is not required to publish notice or to solicit public comments about this proposal, but has chosen to do so because it believes that public com ments will aid the Board in its consideration of the Proposed Statement. Interested persons are there fore invited to submit relevant data, views or com ments. Any such materials should b e submitted in writing to the Secretary, Board of Governors of the Federal Reserve System, Washington, D .C . 20551, and must be received by February 16, 1979. All material submitted should include the D ocket No. R-0197. All materials received will be made available for in spection and copying upon request except as provided in § 261 .6(a ) of the Board’s Rules Regarding Avail ability of Information (12 C.F.R. § 2 6 1 .6 (a ).) DATE: Comments must be received b y February 16, 1979. ADDRESS: Secretary, Board o f Governors of the Federal Reserve System, W ashington, D .C . 20551. All material submitted should include the D ocket Num ber R-0197. FOR FURTHER INFORMATION CONTACT: Anne J. Geary, (202-452-2761), Division of Consumer Affairs, or MaryEllen A. Brown, Legal Division, Board o f Governors of the Federal Reserve System, W ash ington, D .C . 20551. SUPPLEMENTARY INFORMATION: Publication o f this proposed Statement was delayed pending fur ther action on legislative initiatives to limit the ap plicability o f section 1 10 4 (d ) of the Right to Financial Privacy Act, Public Law 95-630. First, on January 10, 1979 the Board, acting on a resolution from its C on sumer Advisory Council, voted to transmit to the Congress a recom m ended amendment to section 1 1 0 4 (d ) that w ould require financial institutions to give a customer the statement of financial privacy rights at the time a Federal agency sought to have access to the customer’s records. Follow ing the Board’s action, members and staff of Congressional committees stated publicly an intention to limit ap plicability of section 1 10 4 (d ) by means of amend ment or amendments that w ould be introduced in the 96th Congress. Then, on January 16, 1979, Senator Proxmire introduced S. 37, which w ould repeal sec tion 1 1 0 4 (d ). Other amendments to section 1 104(d) may also be forthcom ing, but none have been intro duced as yet, and there has been no further action in Congress. The Board’s Proposed Statement follow s: PR OPOSED ST A T E M E N T O F C U ST O M E R RIGH TS U N D E R TH E F IN A N C IA L PR IV A C Y A C T Federal law protects the privacy o f your financial records. Before banks, savings and loan associations, credit unions, credit card issuers or other financial institutions may give financial information about you to a Federal agency, certain procedures must be fo l lowed. Consent to Release of Financial Records You may be asked to consent to make your fi nancial records available to the Government. You may withhold your consent, and your consent is not reuired as a condition o f doing business with any nancial institution. Without Your Consent W ithout wants to see dinarily only mons, formal that purpose. your consent, a Federal agency that your financial records may do so or by means of a lawful subpoena, sum written request, or search warrant for Generally, the Federal agency must give you ad vance notice, explaining why the information is being sought and telling you how to object in court. The Federal agency must also send you copies o f court documents to be prepared by you with instructions for filling them out. Exceptions In some circumstances, a Federal agency may obtain financial information about you without ad vance notice or your consent. For example, informa tion may be released: when authorized by the In ternal Revenue C ode; when required by law to be reported; when there has been a possible violation of Federal law; when required by a Federal loan pro gram (how ever, you have the right to ask which a gen cy(ies) obtained this loan information about you and w h en ). Transfer of Information Generally, a Federal agency must tell you if any records obtained from a financial institution are transferred to another Federal agency. Penalties If a Federal agency or financial institution vio lates the Financial Privacy Act, you may sue for damages or to seek com pliance with the law. If you win, you may be repaid your attorney’s fees and costs. Additional Information If you have any questions about your rights under this law, or about how to consent to release your finan cial records, please call (phone number of financial in stitutions office that answers customer privacy ques tions).
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