June 15, 2004
To: All Member Banks and Others Concerned in the Third Federal Reserve District
Attention: Chief Executive Officer and Chief Compliance Officer
Subject: PROPOSED RULE: PROPER DISPOSAL OF CONSUMER INFORMATION UNDER THE FAIR AND ACCURATE CREDIT TRANSACTIONS ACT OF 2003; REQUEST FOR COMMENT
The Board of Governors of the Federal Reserve System and the other federal bank and thrift regulatory agencies have invited public comment on an interagency proposal to require financial institutions to adopt measures for properly disposing of consumer information derived from credit reports.
Current law requires financial institutions to protect customer information by implementing information security programs. The proposed rules would require institutions to make adjustments to their information security programs to properly dispose of the types of consumer information that are not already protected. This would include information from credit reports about a financial institution’s employee or about an individual whose application for a product or service is denied.
The agencies’ proposal implements section 216 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act). While not imposing significant additional burden, the proposed rules would make amendments to include this new statutory requirement in the Interagency Guidelines Establishing Standards for Safeguarding Customer Information, which were adopted in 2001. The agencies' proposed rules add a new definition of "consumer information" and a provision to require financial institutions to implement appropriate measures to properly dispose of consumer information.
The proposal would take effect three months after a final rule is adopted. The Board’s Federal Register notice, published June 8, 2004, is available here (371 KB, 27 pages).
Date: Comments must be received within 45 days of publication in the Federal Register.
For Further Information: Donna L. Parker, Supervisory Financial Analyst, Division of Supervision & Regulation, (202) 452-2614; Thomas E. Scanlon, Counsel, Legal Division, (202) 452-3594; Minh-Duc T. Le or Ky Tran-Trong, Senior Attorneys, Division of Consumer and Community Affairs, (202) 452-3667. For users of Telecommunications Device for the Deaf (“TDD”) only, contact (202) 263-4869.