OneTrust_Square Banner_300x250_DD_ROS_01_19

By Larry Dobrow

When model privacy notices started appearing in consumers' mailboxes about eight years ago, consumers were unsure what to make of them. Mandated by the Gramm-Leach-Bliley Act, the annual notices were intended to inform consumers what financial institutions were doing with their financial and/or personal data and apprise them of their rights to limit any information-sharing. Thick with legalese and printed in two-point fonts, the notices were often swiftly deposited into the trash.

In the years that followed, model privacy notices became more prevalent, but in most cases no more clear. Realizing this, eight federal agencies took matters into their own hands. Starting in 2003, the agencies began to formulate an easier-to-parse model privacy notice, conducting extensive consumer research (including one-on-one interviews that lasted 90 minutes) about vocabulary, length and presentation, among other things.

"We started with a blank slate," recalls Loretta Garrison, Senior Attorney in the Federal Trade Commission's Division of Privacy and Identity Protection.

The process posed its share of surprises. Going in, most of the agency participants assumed that consumers wanted the shortest possible privacy notice, which proved false.

"They wanted something that's relatively brief, but they also wanted enough information to put things in context," says April Breslaw, the acting Associate Director of the Federal Deposit Insurance Corporation's Division of Supervision and Consumer Protection.

After Congress accelerated the timetable via the passage of the Financial Regulatory Relief Act of 2006 -- which required the agencies to propose a model form within six months -- they delivered the prototype on March 21.

As the agencies wait for the end of the formal comment period on May 29, after which the form will undergo final revisions and further testing, financial institutions have started to wonder how much they'll be affected by the changes. The preliminary answer? Not much, for a single reason: Nobody will be required to use the new form, so long as their own form meets the existing requirements laid out under the law. Those companies that choose not to avail themselves of the model privacy notice, of course, forfeit the safe-harbor provisions that come with its use.

None of the changes appear to be particularly radical. In fact, comparing the proposed notice with the text-heavy privacy notices that consumers have come to expect is like comparing a garage band with a 300-piece orchestra. As opposed to older, longer, more complicated privacy notices, the proposed new one is three pages in length, with information presented in a table format. It places a premium on simplicity: the language is free of technicalities and convoluted syntax.

"That was hard to come by in the privacy notices you used to see. Companies' general counsels were concerned about potential liability, so the notices always had eight layers of protective language," notes Paula Bruening, Deputy Executive Director of law firm Hunton & Williams' Center For Information Policy Leadership.

Another potential benefit, especially for those companies hoping to use their information-sharing practices as a competitive differentiator, is the ease with which one organization's notice can be compared with another's.

"In consumers' minds, privacy notices were all the same," Garrison explains. "Now, if company A and company B use the same standardized form, consumers can see exactly what they're doing differently."

Adds a spokesperson for the Securities and Exchange Commission: "What you forget is that some companies want this information out there. The fact that they have limited sharing of information is something they believe consumers will respond to, and this [notice] helps them do that."

As for drawbacks, some businesses have quietly grumped about potential costs associated with the new notice. Adopting and customizing the new form, they claim, will force them to dig into their wallets.

"We hope that the costs would not be prohibitive, but they have to provide notices anyway. Either way, there's going to be some expense," Breslaw says.

Bruening, on the other hand, worries about this privacy-notice template eventually being adopted for environments where it might not be appropriate, or even by entities, such as online-only banks, that don't necessarily resemble the traditional conception of a financial institution.

"[The model notice] won't be easily portable," she says. "What about dynamic information-sharing and -collecting environments -- RFID and sensor-based technologies that can collect information? Everything we've learned through this process has been good, but I'm not certain how useful [the notice] will be going forward."




If you want to comment on this post, you need to login.


Board of Directors

See the esteemed group of leaders shaping the future of the IAPP.

Contact Us

Need someone to talk to? We’re here for you.

IAPP Staff

Looking for someone specific? Visit the staff directory.

Learn more about the IAPP»

Daily Dashboard

The day’s top stories from around the world

Privacy Perspectives

Where the real conversations in privacy happen

The Privacy Advisor

Original reporting and feature articles on the latest privacy developments

Privacy Tracker

Alerts and legal analysis of legislative trends

Privacy Tech

Exploring the technology of privacy

Canada Dashboard Digest

A roundup of the top Canadian privacy news

Europe Data Protection Digest

A roundup of the top European data protection news

Asia-Pacific Dashboard Digest

A roundup of the top privacy news from the Asia-Pacific region

Latin America Dashboard Digest

A roundup of the top privacy news from Latin America

IAPP Westin Research Center

Original works. Groundbreaking research. Emerging scholars.

Get more News »

IAPP Communities

Meet locally with privacy pros, dive deep into specialized topics or connect over common interests. Find your Community in KnowledgeNet Chapters, Sections and Affinity Groups.

IAPP Job Board

Looking for a new challenge, or need to hire your next privacy pro? The IAPP Job Board is the answer.

Join the Privacy List

Have ideas? Need advice? Subscribe to the Privacy List. It’s crowdsourcing, with an exceptional crowd.

Find a KnowledgeNet Chapter Near You

Talk privacy and network with local members at IAPP KnowledgeNet Chapter meetings, taking place worldwide.

Find more ways to Connect »

Find a Privacy Training Class

Two-day privacy training classes are held around the world. See the complete schedule now.

The Privacy Core™ Library Has Evolved

Privacy Core™ e-learning essentials just expanded to include seven new units for marketers. Keep your data safe and your staff in the know!

Online Privacy Training

Build your knowledge. The privacy know-how you need is just a click away.

Upcoming Web Conferences

See our list of upcoming web conferences. Just log on, listen in and learn!

Train Your Team

Get your team up to speed on privacy by bringing IAPP training to your organization.

Let’s Get You DPO Ready

There’s no better time to train than right now! We have all the resources you need to meet the challenges of the GDPR.

Learn more »

CIPP Certification

The global standard for the go-to person for privacy laws, regulations and frameworks

CIPM Certification

The first and only privacy certification for professionals who manage day-to-day operations

CIPT Certification

The industry benchmark for IT professionals worldwide to validate their knowledge of privacy requirements

FIP Designation

Recognizing the advanced knowledge and issue-spotting skills a privacy pro must attain in today’s complex world of data privacy.

Certify Your Staff

Find out how you can bring the world’s only globally recognized privacy certification to a group in your organization.


The IAPP’S CIPP/E and CIPM are the ANSI/ISO-accredited, industry-recognized combination for DPO readiness. Learn more today.

Learn more about IAPP certification »

Are You Ready for the GDPR?

Check out the IAPP's EU Data Protection Reform page for all the tools and resources you need.

IAPP-OneTrust PIA Platform

New U.S. Government Agency privacy impact assessments - free to IAPP members!

IAPP Communities

Meet locally with privacy pros, dive deep into specialized topics or connect over common interests. Find your Community in KnowledgeNet Chapters, Sections and Affinity Groups.

Privacy Vendor List

Find a privacy vendor to meet your needs with our filterable list of global service providers.

More Resources »

Europe Data Protection Intensive 2017

The Intensive is sold out! But cancellations do happen—so hurry and get on the wait list in case more seats become available.

Global Privacy Summit 2017

The world’s premier privacy conference returns with the sharpest minds, unparalleled programs and preeminent networking opportunities. Early Bird ends TODAY.

Canada Privacy Symposium 2017

The Symposium returns to Toronto this spring and registration has opened! Take advantage of Early Bird rates and join your fellow privacy pros for another stellar program.

The Privacy Bar Section Forum 2017

The Privacy Bar Section Forum returns to Washington, DC April 21, delivering renowned keynote speakers and a distinguished panel of legal and privacy experts.

Asia Privacy Forum 2017

The Forum returns to Singapore for exclusive networking and intensive education on data protection trends and challenges in the Asia Pacific region. Call for Speakers open!

Privacy. Security. Risk. 2017

This year, we're bringing P.S.R. to San Diego. The Call for Speakers is now open. Submit today and be a part of something big! Submission deadline: February 26.

Europe Data Protection Congress 2017

European policy debate, multi-level strategic thinking and thought-provoking discussion. The Call for Speakers is open until March 19.

Sponsor an Event

Increase visibility for your organization—check out sponsorship opportunities today.

More Conferences »

Become a Member

Start taking advantage of the many IAPP member benefits today

Corporate Members

See our list of high-profile corporate members—and find out why you should become one, too

Renew Your Membership

Don’t miss out for a minute—continue accessing your benefits

Join the IAPP»