WASHINGTON, D.C. — Captured in a measure supported by
multiple banking and credit union associations, the U.S. House of
Representatives last week passed legislation aimed at eliminating redundant
mailings.

U.S. Rep. Blaine Luetkemeyer of Missouri sponsored the
Eliminate Privacy Notice Confusion Act (H.R. 5817). Luetkemeyer said the bill would
ease the Gramm-Leach-Bliley Act privacy notice requirement and eliminate the
current requirement that banks and credit unions have to mail to all customers
annual privacy notices explaining information sharing practices even when a
financial institution's privacy policies have not changed.

Instead, Luetkemeyer's bill would require banks and credit
unions to provide information to customers only if privacy policies have in
fact changed at their financial institution.

"This legislation would eliminate unnecessary, costly,
confusing and often ignored mailings that clog up people's mailboxes that end
up costing millions of dollars to produce and mail. Additionally, many of these
costs are ultimately being passed onto customers of banks and credit unions,"
Luetkemeyer said. "Not only will this legislation end the redudant mailings,
but it also will make it more likely that people will pay closer attention to
important mailings they receive from their financial institutions because they
are receiving fewer."

The legislation heads next to the U.S. Senate for
consideration.

The developments have been cheered by organizations such as
the National Association of Federal Credit Unions.

"This legislation eliminates an unnecessary, redundant and
costly annual privacy policy notice requirement," NAFCU executive vice
president of government affairs Dan Berger said. "It will save credit unions
valuable staff resources, lower the cost of financial services, and reverse the
negative environmental impact caused by such a requirement, while not harming
consumers."

James Ballentine, executive vice president of congressional
relations and political affairs for the American Bankers Association, echoed a
similar position.

"This sensible legislation would update the
Gramm-Leach-Bliley Act (GLBA) requirement for financial institutions to provide
annual privacy notices by removing the requirement for federal financial
institutions that have not made any changes to their privacy practices in the
previous year," Ballentine said.

"Requiring financial institutions to send annual notices
even when no changes have been made is redundant and unnecessary," Ballentine
continued. "Eliminating the requirement would remove an additional expense for
banks and help to make the privacy notices more meaningful to consumers."

Following the House passage, Bill Cheney, president and
chief executive officer of the Credit Union National Association, delivered a
message to the Senate Banking Committee, which includes chairman Sen. Tim
Johnson of South Dakota and ranking member Sen. Richard Shelby of Alabama.

"If this legislation becomes law, consumers currently
receiving redundant annual privacy notices regardless of whether a policy has
changed, will instead receive their notices when actual changes were made to
their policies," Cheney said. "The bill eliminates repetitive notices that are
often ignored by consumers, and enhances consumer protection by ensuring that
when a consumer receives a privacy notification, it has significance and is not
redundant. The legislation also reduces future compliance burden for credit
unions and other financial institutions.

"On behalf of America's credit unions, we appreciate your
effort to eliminate unnecessary regulatory burdens for credit unions. We
strongly support this legislation and look forward to its enactment," Cheney
concluded.