Joint Release: Report Issued on Improving Financial Privacy Notices for Consumers; 2006-46; Mar. 31, 2006
summary
U.S. financial regulators commissioned research to improve consumer understanding of financial privacy notices under the Gramm-Leach-Bliley Act, developing a simplified prototype that enhanced comprehension without alleging any fraud or misconduct.
paragraph
Six federal agencies — the Federal Reserve, FDIC, FTC, NCUA, OCC, and SEC — jointly commissioned Kleimann Communication Group to study consumer confusion over complex financial privacy notices required by the Gramm-Leach-Bliley Act. The research, based on 12 months of focus groups and interviews, revealed that consumers were overwhelmed by dense text and could not understand information-sharing practices, leading to the creation of a simplified tabular prototype that improved readability and decision-making. No fraud, fines, or enforcement actions were involved; regulators deferred policy changes until a second phase of broader consumer testing could evaluate the prototype’s effectiveness.
narrative
In 2006, six U.S. financial regulators — the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission — jointly commissioned research to address widespread consumer confusion over financial privacy notices mandated by the Gramm-Leach-Bliley Act. Conducted by Kleimann Communication Group over a 12-month period, the study involved focus groups and individual interviews with consumers nationwide, revealing that most did not understand the notices due to their complexity, length, and poor design. Researchers developed a prototype privacy notice in a simplified tabular format that significantly improved consumers’ ability to read, comprehend, and compare information-sharing practices across institutions. The report emphasized that consumers needed contextual clarity and better visual design to make informed choices about their personal data. The agencies concluded that the prototype demonstrated it was possible to include all legally required information in a concise, understandable format. They deferred any policy changes or regulatory updates until a second phase of testing with a larger, more diverse group of consumers could validate the prototype’s effectiveness. This initiative was part of a broader effort to enhance financial literacy and align U.S. privacy disclosures with global best practices. The full report was made publicly available online to support transparency and further research.
Classified non-corporate(confidence 100%). No EDGAR filing fingerprint (criminal/DOJ-side scheme). detection rule →
Parties
federal deposit insurance corporationfederal trade commissionkleimann communication groupnational credit union administrationoffice of the comptroller of the currencySecurities and Exchange Commission
Keywords
financial privacyprivacy noticesnoticesfinancialprivacyconsumersreportfederalimproving financialnotices consumersinformationresearchunderstandreport issuedissued improving
Extracted insights
Entities 6
- company federal deposit insurance corporation
- agency federal trade commission
- company kleimann communication group
- person national credit union administration
- agency office of the comptroller of the currency
- agency Securities and Exchange Commission
Triples 13
- Board Of Governors Of The Federal Reserve System released Evolution Of A Prototype Financial Privacy Notice
- Kleimann Communication Group summarized consumer research on financial privacy notices
- Six Federal Agencies jointly issued regulations implementing Gramm-Leach-Bliley Act financial privacy provisions in 2000
- Board Of Governors Of The Federal Reserve System participated in interagency project to develop improved financial privacy notices
- Federal Deposit Insurance Corporation participated in interagency project to develop improved financial privacy notices
- Federal Trade Commission participated in interagency project to develop improved financial privacy notices
- National Credit Union Administration participated in interagency project to develop improved financial privacy notices
- Office Of The Comptroller Of The Currency participated in interagency project to develop improved financial privacy notices
- Securities And Exchange Commission participated in interagency project to develop improved financial privacy notices
- Researchers conducted focus groups and interviews with consumers over 12-month period
- Six Agencies will fund second phase of consumer testing project
- Office Of Thrift Supervision will fund second phase of consumer testing project
- Agencies deferred consideration of policy action on financial privacy notices
Extracted body text (4,157c)
Joint Release Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Federal Trade Commission National Credit Union Administration Office of the Comptroller of the Currency Office of Thrift Supervision Securities and Exchange Commission 2006-46 FOR IMMEDIATE RELEASE March 31, 2006 Report Issued on Improving Financial Privacy Notices for Consumers Washington, D.C. - Federal regulators today released Evolution of a Prototype Financial Privacy Notice, a report by Kleimann Communication Group summarizing consumer research commissioned by the regulators as part of their ongoing efforts to develop improved financial privacy notices. The report's release concludes the first phase of an interagency project by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission to explore alternatives for financial privacy notices that would be easier for consumers to read, understand, and use than many of the notices consumers currently receive from financial institutions. These six agencies were among those that jointly issued regulations in 2000 implementing the financial privacy provisions of the Gramm-Leach-Bliley Act, but survey data indicate that many consumers neither read nor understand the notices financial institutions provide under those regulations. The report's findings indicate that it is possible for financial privacy notices to include all of the information required by law in a short document that consumers can readily understand. The report fully describes the extensive research that underlies these findings and the development of a prototype simplified privacy notice. Over a 12-month period, researchers conducted focus groups and in-depth individual interviews with consumers throughout the United States. Based on consumers' reactions to sample privacy notices, the researchers modified content and design to create notices in a tabular format that improved consumers' ability to read, understand, and use the notices, as well as to compare the information sharing practices of different financial institutions. The report concludes that consumers need a context for understanding information in financial privacy notices. The research shows that while there is a general awareness of information sharing practices, most consumers do not understand them. According to the report, consumers are overwhelmed by complex information, and simplification of financial privacy notices enhances consumers' ability to read the notices and make informed choices about the use of their personal information. The research also demonstrates that consumers more easily understand the important information in the notice when good design reinforces the content. The six agencies, together with the Office of Thrift Supervision, will fund a second phase of the project, to be contracted separately. This research will involve interviewing a much larger group of consumers throughout the United States to measure the effectiveness of the prototype and other examples of notices. The agencies have deferred consideration of policy action with respect to financial privacy notices until the next phase of consumer testing is completed. At that time, the agencies expect to consider a full range of options for improving financial privacy notices in light of all their consumer research. The agencies' efforts to improve these notices complement efforts to improve the effectiveness of privacy notices worldwide, as well as other government efforts to improve financial literacy. The report is available online at http://www.ftc.gov/privacy/privacyinitiatives/ftcfinalreport060228.pdf. # # # Media contacts: FRB Deborah Lagomarsino 202-452-2955 FDIC David Barr 202-898-6992 FRB Jacqueline Dizdul 202-326-2472 NCUA Cherie Umbel 703-518-6337 OCC Bryan Hubbard 202-874-5770 OTS Chris Smith 202-906-6677 SEC John J. Nester 202-551-4125 http://www.sec.gov/news/press/2006-46.htm Home | Previous Page Modified: 03/31/2006
OCR text (4,157c · plain-text · 99% conf)
Joint Release Board of Governors of the Federal Reserve System Federal Deposit Insurance Corporation Federal Trade Commission National Credit Union Administration Office of the Comptroller of the Currency Office of Thrift Supervision Securities and Exchange Commission 2006-46 FOR IMMEDIATE RELEASE March 31, 2006 Report Issued on Improving Financial Privacy Notices for Consumers Washington, D.C. - Federal regulators today released Evolution of a Prototype Financial Privacy Notice, a report by Kleimann Communication Group summarizing consumer research commissioned by the regulators as part of their ongoing efforts to develop improved financial privacy notices. The report's release concludes the first phase of an interagency project by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission to explore alternatives for financial privacy notices that would be easier for consumers to read, understand, and use than many of the notices consumers currently receive from financial institutions. These six agencies were among those that jointly issued regulations in 2000 implementing the financial privacy provisions of the Gramm-Leach-Bliley Act, but survey data indicate that many consumers neither read nor understand the notices financial institutions provide under those regulations. The report's findings indicate that it is possible for financial privacy notices to include all of the information required by law in a short document that consumers can readily understand. The report fully describes the extensive research that underlies these findings and the development of a prototype simplified privacy notice. Over a 12-month period, researchers conducted focus groups and in-depth individual interviews with consumers throughout the United States. Based on consumers' reactions to sample privacy notices, the researchers modified content and design to create notices in a tabular format that improved consumers' ability to read, understand, and use the notices, as well as to compare the information sharing practices of different financial institutions. The report concludes that consumers need a context for understanding information in financial privacy notices. The research shows that while there is a general awareness of information sharing practices, most consumers do not understand them. According to the report, consumers are overwhelmed by complex information, and simplification of financial privacy notices enhances consumers' ability to read the notices and make informed choices about the use of their personal information. The research also demonstrates that consumers more easily understand the important information in the notice when good design reinforces the content. The six agencies, together with the Office of Thrift Supervision, will fund a second phase of the project, to be contracted separately. This research will involve interviewing a much larger group of consumers throughout the United States to measure the effectiveness of the prototype and other examples of notices. The agencies have deferred consideration of policy action with respect to financial privacy notices until the next phase of consumer testing is completed. At that time, the agencies expect to consider a full range of options for improving financial privacy notices in light of all their consumer research. The agencies' efforts to improve these notices complement efforts to improve the effectiveness of privacy notices worldwide, as well as other government efforts to improve financial literacy. The report is available online at http://www.ftc.gov/privacy/privacyinitiatives/ftcfinalreport060228.pdf. # # # Media contacts: FRB Deborah Lagomarsino 202-452-2955 FDIC David Barr 202-898-6992 FRB Jacqueline Dizdul 202-326-2472 NCUA Cherie Umbel 703-518-6337 OCC Bryan Hubbard 202-874-5770 OTS Chris Smith 202-906-6677 SEC John J. Nester 202-551-4125 http://www.sec.gov/news/press/2006-46.htm Home | Previous Page Modified: 03/31/2006