The Federal Trade Commission (FTC) recently proposed amendments to its Gramm-Leach-Bliley Act (GLBA) rules requiring motor vehicle dealers to send their customers an annual privacy notice. The amendments would allow motor vehicle dealers to notify their customers that a privacy policy is available on their website, under certain circumstances.

The FTC asserts that the online delivery of the GLBA-required disclosures will allow motor vehicle dealers to “inform customers of their motor vehicle dealer’s privacy policies effectively and at a lower cost than the current widespread method of mailing annual privacy notices. The cost savings could benefit both consumers and businesses.” Public comments about the proposed amendments must be received on or before August 31, 2015.

The Dodd-Frank Wall Street Reform and Consumer Protection Act transferred primary jurisdiction over the GLBA to the Consumer Financial Protection Bureau (CFPB), although enforcement and some other authorities were retained by other federal agencies. The FTC retained authority over motor vehicle dealers predominantly engaged in the sale and servicing of motor vehicles, the leasing and servicing of motor vehicles, or both. The changes closely reflect a final rule issued last year by the CFPB for financial institutions subject to the CFPB’s GLBA rulemaking authority (discussed in our prior alert). As part of the FTC rulemaking process, the FTC is seeking comments on whether the FTC’s approach for motor vehicle dealers should differ from that for the financial institutions regulated by the CFPB. 

Motor vehicle dealers may utilize the alternative delivery method proposed by the FTC if the following conditions have been satisfied:

  • The dealer does not share the customer’s information with nonaffiliated third parties in a manner that triggers the opt-out requirement under the GLBA;
  • The dealer does not include on its annual notice an opt-out with regard to affiliate sharing under Fair Credit Reporting Act § 603(d)(2)(A)(iii);
  • The dealer does not use certain information about a consumer that it receives from an affiliate to market to that consumer under Fair Credit Reporting Act § 624;
  • The substantive information a dealer is required to convey on its annual privacy notice has not changed since the immediately previous privacy notice (whether initial, annual, or revised) to the customer; and
  • The dealer uses the model privacy form for its annual privacy notice.

If all of these conditions have been met, the FTC proposal would require motor vehicle dealers to implement the alternative delivery method by:

  • Informing customers of the availability of the annual privacy notice online, including a telephone number that a customer can call to request a hard copy of the notice in the notice of availability;
  • Posting the current privacy notice continuously and in a clear and conspicuous manner on a page of the dealer’s website on which the only content is the privacy notice; and
  • Mailing the current privacy notice to those customers who request it by telephone within 10 calendar days of such request.

Members of Ballard Spahr’s Consumer Financial Services Group and Privacy and Data Security Group regularly advise financial institutions on compliance with consumer financial services laws related to data security and privacy issues.

If you have questions, please contact Consumer Financial Services Group Practice Leader Alan S. Kaplinsky at 215.864.8544 or kaplinsky@ballardspahr.com, Kim Phan at 202.661.2286 or phank@ballardspahr.com, Kevin D. Leitão at 646.346.8011 or leitaok@ballardspahr.com, Odia Kagan at 215.864.8349 or kagano@ballardspahr.com, Daniel JT McKenna at 215.864.8321 or mckennad@ballardspahr.com, or Philip N. Yannella at 215.864.8180 or yannellap@ballardspahr.com.

 


 

Copyright © 2015 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

Related Practices

Consumer Financial Services
Privacy and Data Security

CFPB

Visit CFPB Monitor, our blog on the Consumer Financial Protection Bureau >

Subscribe to the blog via e-mail >