Under current law, financial institutions of all sizes are required to provide annual privacy notices explaining information sharing practices to all customers. Financial firms are required to give these notices each year even if their privacy policies have not changed in the slightest. According to Rep. Luetkemeyer, this creates not only waste for financial institutions, but confusion among consumers, as well as increased indirect cost to consumers. (Cong. Record, Dec. 3 2012, H6581). He also noted that the legislation will make the mailings more significant to the consumer because they would only come after a change in policy. The sponsor ojef H.R. 749 reiterated that the legislation will only remove the annual privacy notice requirement if a financial institution has not, in any way, changed its privacy policies or procedures. He assure that the legislation does not exempt any institution from an initial privacy notice, nor does it allow a loophole for a financial firm to avoid using an updated notice. (Cong. Record, Mar 13, 2013, H1338).
Rep.Shelley Moore Capito (R-WV), Chair of the Financial Institutions Subcommittee, noted that these annual mailings cost millions of dollars each year and do not provide consumers with new information if the financial institutions have not changed their practice. The legislation will require a financial institution to provide annual privacy notices only if they have changed privacy policies that affect the customer. This is an important, commonsense bill, said the Chair, that will provide further clarity to customers and consumers and eliminate an unnecessary regulatory burden for financial institutions. (Cong. Record, Dec. 3 2012, H6581).