Privacy of Consumer Financial Info Flashcards
Acme Community Bank does NOT disclose any nonpublic personal information about its customers except to its computer processor, to its attorneys for loan documentation, and to a national credit reporting agency. What privacy notices is Acme required to give?
a. Initial and annual notices to consumers and customers
b. Initial and annual notices to customers
c. Initial, annual, and opt-out notices to customers
d. Initial, annual, and opt-out notices to customers and consumers
b. Initial and annual notices to customers
ACME Bank has a joint marketing agreement with Friendly Brokerage Company whereby ACME and Friendly agree to jointly market certain financial products. ACME would like to refer customers to Friendly by providing the Friendly brokerage officer with names of ACME customers who might be interested in the financial products Friendly offers. Friendly has signed an agreement with ACME promising not to disclose any information about ACME’s customers to others. What type of responsibility does ACME have to its customers under the Privacy Regulation?
a. ACME must give a disclosure and opt-out opportunity to all customers.
b. ACME has no disclosure or opt-out responsibilities.
c. ACME must give customers a notice that it provides information to companies with which it has joint marketing agreements.
d. ACME must give an opt-out option but no disclosure.
c. ACME must give customers a notice that it provides information to companies with which it has joint marketing agreements.
National Bank generally discloses information only to affiliated parties. However, in the following circumstances, it will disclose information to nonaffiliated parties. It shares information with its service processor for the purpose of completing transactions. It sends details of loan transactions to its lawyers so that documentation can be drawn. It allows its external auditors to see transactions. From time to time for business development purposes, it shares full loan files
with an affiliated finance company that is owned by its holding company. Does National have any responsibility to provide customers an opt-out option?
a. No. The bank shares only with affiliated parties except for the exemptions allowed by the privacy regulation.
b. Yes. Any information sharing requires an opt-out notice.
c. Yes. The loan transaction information given to the lawyers triggers the opt-out notice requirement.
d. Yes. The bank must give a Fair Credit Reporting Act opt-out for the information, even for sharing with an affiliate.
d. Yes. The bank must give a Fair Credit Reporting Act opt-out for the information, even for sharing with an affiliate.
The following accounts were opened at State National Bank:
John Doe
John Doe and Joe Smith
Mary Smith and Joe Smith
Fred Richards and Mary Smith
Assuming the initial privacy notice did not change, what is the minimum number of initial privacy notices the bank must give?
a. 3
b. 4
c. 6
d. 7
b. 4
What should a compliance manager do FIRST to implement the third-party joint marketing agreement as required by the Privacy of Consumer Financial Information regulations?
a. Notify the third party of the institution’s opt-out policy
b. Obtain approval of the board of directors prior to entering into a third-party contract
c. Review the requirements for third-party joint marketing agreements and make certain the requirements are included
d. Request a written statement from the third-party provider that certifies compliance with the regulation
c. Review the requirements for third-party joint marketing agreements and make certain the requirements are included
XYZ bank holding company is purchasing ABC Bank. ABC Bank will retain a separate charter. The compliance officer has been asked to develop a privacy policy and privacy notice for ABC Bank. What should the compliance officer do FIRST?
a. Identify all of the information-sharing practices between ABC Bank and third parties
b. Obtain a mailing list of ABC Bank’s customers to ensure they receive a privacy notice
C. Ensure that all of ABC Bank’s joint marketing agreements contain confidentiality clauses
d. Evaluate whether ABC Bank’s systems can electronically support opt-out elections by customers
a. Identify all of the information-sharing practices between ABC Bank and third parties
A bank wants to generate revenue by selling banners on its Web site. Customers will be able to go to an advertiser’s site by clicking on a banner on the bank’s home page. Under the privacy regulations, what should the bank do?
a. Revise its privacy disclosure
b. Execute a confidentiality agreement with each advertiser
c. Execute a joint marketing agreement with each advertiser
d. Take no action, as none is required
d. Take no action, as none is required
A bank provides several value-added services to checking account customers, such as free travel insurance provided by a nonaffiliated insurance company. Each month, the bank provides a list of customer names and addresses to the insurance company. What should be the compliance officer’s GREATEST concern?
a. That marketing materials clearly and conspicuously describe the travel insurance
b. That consumers are aware of this valuable service so the bank retains their relationship
c. That customer service representatives fully describe the features of the checking accounts
d. That the bank has a written agreement with the insurance company and the bank’s privacy notice accurately describes the relationship
d. That the bank has a written agreement with the insurance company and the bank’s privacy notice accurately describes the relationship
