NY State Senate Bill 2011-S2111

Archive: Last Bill Status - In Senate Committee Banks Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 18, 2011	referred to banks

2011-S2111 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Banking Law
Laws Affected:: Add §9-v, Bank L
Versions Introduced in 2009-2010 Legislative Session:: S1320

2011-S2111 (ACTIVE) - Summary

Provides that banking institutions in New York State may release customer information in the following manner; (a) to the actual customer or authorized agent, or (b) unless a customer affirmatively and in writing prohibits the release, to a subsidiary or affiliate of the banking institution, or, (c) to any other persons or entities if the customer information intended to be released consists only of customer identification, (e.g. name or address of customer) and/or is recorded in public records; defines the term "customer information" to mean account records and any other information constructed from those records relating to the customer's relationship with the institution.

2011-S2111 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S2111

TITLE OF BILL:
An act
to amend the banking law, in relation to the disclosure of a banking
institution's customer records

PURPOSE:
To ensure the privacy and confidentiality of
customer records
and sensitive financial information. To codify federal regulations
regarding the disclosure of customer banking information.

SUMMARY OF SPECIFIC PROVISIONS:
Under the bill,
banking institutions
in New York State may release "customer information," defined to mean
account records and any other information constructed from those
records relating to the customer's relationship with the institution,
in the following manner: (a) to the actual customer or authorized
agent; or (b) unless a customer affirmatively and in writing
prohibits the release, to a subsidiary or affiliate of the banking
institution; or, to any other persons or entities if the customer
information intended to be released consists only of customer
identification, (e.g. name or address of customer) and/or is recorded
in public records.

The banking institution must give written notice to the customer of
the intent to release such information. The customer has the right to
prohibit the release of this information by notifying the bank in
writing of his or her objection. Any disclosure of this information
may be made no sooner than 15 days after the customer received the
notice, if the notice was given in person or 15 days after the notice
was mailed. The notice shall be given to those customers who have not
objected to the release of his or her customer information. Banking
institutions desiring to release customer information to their
subsidiaries or affiliates or public customer information to third
parties may provide the objection form to new customers at the time
an account is opened, at the time a loan application is submitted or
approved, or other transaction is entered into. Written notice must
be provided to existing customers in a timely manner, although a
separate mailing is not required.

A bank, for statement. than to the
example, may include the notice with or in a monthly account Banking
institutions may release to third parties, other subsidiaries or
affiliates, customer information that is

NOT contained in public records, provided that the
institution
procures the consent of the customer after providing the customer
with notice of its intent to release the customer information and the

right of the customer to prevent such release. The bank must supply a
plainly worded form that the customer may use to provide such
consent. The consent form must state that the bank intends to release
information,
that the customer may object to the release, and that without the
customer's express written authorization, the bank will not disclose
the information, except in certain limited circumstances as outlined
in the bill (e.g. pursuant to subpoena).

The legislation further outlines other provisions that must be printed
on the document. The financial institution must receive and retain a
copy of the customer's authorization for its records. In this way,
the bank may sell or make publicly available non-public customer
information, and third parties can conduct direct mail solicitations
aimed at the customers in a manner that respects the privacy
expectations of the customers. At least once every 2 years after the
banking institution releases customer information, such institution
that desires to continue such practice must provide written notice to
the customers reminding them that the banking institution may release
such information and of the customer's continuing right to withdraw
authorization.

Thus, the institution is not required to secure authorization again.
The institution may comply with this requirement, for example, by
providing the customer with a preprinted and self addressed form with
which the customer may withdraw the authorization. Because of the
need for continued confidentiality of customer information following
the release to certain exempted parties, the bill provides, as did
the federal rule, that certain persons execute written
confidentiality agreements prior to the release of customer
information: parties to whom a customer has authorized such release;
agents and contractors of a financial institution responsible for
preparing, handling or processing customer data;
other financial institutions or credit reporting agencies; the bank's
bond or insurance companies and persons engaged in secondary market
transactions.

The confidentiality agreements must contain a statement of the
specific use to be made of the records and prohibit disclosure by the
third party except as required by law. Notwithstanding the other
provisions, the bill stipulates that the banking institution shall
disclose its customer information to persons making demand pursuant
to a subpoena, summons, warrant or court order. Finally, the bill
provides for civil penalties if the banking institution fails to
notify the customer of disclosure practices or notifies the customer
but fails to honor the preference.
The penalty for failure to notify is $100 a day as modeled after
section 104(5) of the Banking Law. Furthermore, the penalty for
disclosure, failing to honor a customer's preference, is forfeiture
to the state of the proceeds received from disclosure, modeled after
section 130(1) in the Banking Law.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
The banking law is
amended by adding a new section 9-t.

JUSTIFICATION:
Many believe that the details of their
personal
finances disclosed to banking institutions are confidential and
private.
All too often, this assumption does not conform to practice.
Information generated from personal records (e.g. transaction and
check history, credit line, savings account data, mortgage data,
financial holdings) is sold or released to third parties for the
compilation of comprehensive data bases which in turn are used for
various marketing and investigative
purposes without the knowledge and consent of the data subject.

A person's banking transactions, especially the checks that he or she
issues, are a mirror of his or her life-style, personal interests and
beliefs. From these records, an interested third party could easily
identify the groups he or she joins and supports, the material he or
she buys and the causes that he or she supports. If an individual
applies for a mortgage or a personal loan, the statement of financial
condition would reveal even more intimate financial details that most
consumers do not want released or used for other or secondary
purposes. On the federal level, The Right to Financial Privacy Act of
1978, established procedures for federal officials to follow
concerning access to customer records.

As a general rule, a customer may challenge a government agency's
subpoena or written request to a financial institution for customer
records by filing a motion in a federal district court. The agency
and the financial institution are liable to pay actual or punitive
damages in the event of violation of the act. Thus, on the federal
level there is recognition of the customer's right to privacy. By
enacting this legislation, New York would join several other. states
including California, Connecticut, Georgia, New Jersey, Florida,
Illinois, Texas, Indiana, North Carolina and Oklahoma in
acknowledging that financial institutions owe confidentiality to
their customers.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect on the
first of January
next succeeding the date on which it shall have become law.

2011-S2111 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2111

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 18, 2011
                               ___________

Introduced  by  Sen.  KRUGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT to amend the banking law, in relation  to  the  disclosure  of  a
  banking institution's customer records

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The banking law is amended by adding a new section  9-v  to
read as follows:
  S  9-V.    DISCLOSURE OF CUSTOMER RECORDS.   1.   FOR PURPOSES OF THIS
SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A)  "BANKING INSTITUTION" MEANS ALL BANKS, TRUST  COMPANIES,  SAVINGS
BANKS,  SAVINGS  AND LOAN ASSOCIATIONS, CREDIT UNIONS, MORTGAGE BANKERS,
EXEMPT ORGANIZATIONS AS DEFINED IN ARTICLE  TWELVE-D  OF  THIS  CHAPTER,
LICENSED  LENDERS AND FOREIGN BANKING CORPORATIONS WHETHER INCORPORATED,
CHARTERED, ORGANIZED OR LICENSED UNDER THE LAWS OF  THIS  STATE  OR  ANY
OTHER STATE OR THE UNITED STATES.
  (B)    "AGENT"  MEANS ANY PERSON AUTHORIZED TO TRANSACT BUSINESS FOR A
PRINCIPAL.
  (C) "CUSTOMER" MEANS A DEPOSITOR IN,  BORROWER  FROM,  AND  ANY  OTHER
PERSON PATRONIZING A BANKING INSTITUTION AND UTILIZING ITS SERVICES.
  (D) "CUSTOMER IDENTIFICATION" MEANS THE ORIGINAL OR ANY COPY OR SUMMA-
RY OF ANY DOCUMENT, INCLUDING ANY EVIDENCE OF A TRANSACTION CONDUCTED BY
ELECTRONIC  TERMINAL,  THAT  CONTAINS  THE  NAME  AND/OR  ADDRESS OF ANY
CUSTOMER OF A BANKING INSTITUTION, OR ANY DATA FROM WHICH SUCH  INFORMA-
TION COULD BE CONSTRUCTED.
  (E)  "CUSTOMER  INFORMATION" MEANS THE ORIGINAL OR ANY COPY OR SUMMARY
OF ANY DOCUMENT, INCLUDING ANY EVIDENCE OF A  TRANSACTION  CONDUCTED  BY
MEANS  OF  AN  ELECTRONIC  TERMINAL, THAT CONTAINS A CUSTOMER'S CUSTOMER
IDENTIFICATION AND ANY INFORMATION CONCERNING  A  CUSTOMER'S  INDIVIDUAL
SAVINGS  OR  LOAN ACCOUNTS OR THE DETAILS OF OTHER TYPES OF TRANSACTIONS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06691-01-1

S. 2111                             2

BETWEEN THE CUSTOMER AND THE BANKING INSTITUTION, OR ANY DATA FROM WHICH
SUCH INFORMATION COULD BE CONSTRUCTED.
  (F)  "PERSON"  MEANS  AN INDIVIDUAL, PARTNERSHIP, CORPORATION, ASSOCI-
ATION, TRUST, OR ANY OTHER LEGAL ENTITY ORGANIZED UNDER THE LAWS OF  ANY
STATE OR OF THE UNITED STATES, OR OF ANY FOREIGN STATE.
  (G)  "PUBLIC  RECORD"  MEANS A RECORD WHICH IS AVAILABLE TO THE PUBLIC
PURSUANT TO ARTICLE SIX OF THE PUBLIC OFFICERS LAW.
  (H) "THIRD PERSON" MEANS A PERSON OTHER THAN THE CUSTOMER, THE BANKING
INSTITUTION, ITS WHOLLY-OWNED SUBSIDIARY OR AFFILIATE, TO  WHOM  DISCLO-
SURE IS RESTRICTED BY THIS SECTION.
  (I) "SUBSIDIARY" SHALL HAVE THE SAME MEANING AS PROVIDED FOR IN SUBDI-
VISION FIVE OF SECTION ONE HUNDRED FORTY-ONE OF THIS CHAPTER.
  (J)  "AFFILIATE" SHALL HAVE THE SAME MEANING AS PROVIDED FOR IN SUBDI-
VISION SIX OF SECTION THIRTY-SIX OF THIS CHAPTER.
  2. A CUSTOMER OF A BANKING INSTITUTION OR HIS OR HER  DULY  AUTHORIZED
AGENT  HAS THE RIGHT TO OBTAIN AND INSPECT CUSTOMER INFORMATION PERTAIN-
ING SOLELY TO THE CUSTOMER'S  OWN  SAVINGS  ACCOUNTS  OR  LOAN  ACCOUNTS
RECORDS,  OR INFORMATION PERTAINING TO OTHER FINANCIAL TRANSACTIONS WITH
THE BANKING INSTITUTION.  A CUSTOMER DOES NOT HAVE THE RIGHT UNDER  THIS
SECTION  TO  OBTAIN INTERNAL BUSINESS PAPERS, MEMORANDA, OR OTHER CONFI-
DENTIAL CORRESPONDENCE OR COMMUNICATIONS  BETWEEN  THE  INSTITUTION  AND
OTHERS INCLUDING ITS ATTORNEYS, ACCOUNTANTS, AND BOARD OF DIRECTORS THAT
MAY RELATE TO THE CUSTOMER.
  3.  (A)    A  BANKING  INSTITUTION  MAY DISCLOSE A CUSTOMER'S CUSTOMER
INFORMATION TO (I) A WHOLLY-OWNED SUBSIDIARY OR AFFILIATE OF THE BANKING
INSTITUTION, OR (II)  TO  THIRD  PERSONS  IF  THE  CUSTOMER  INFORMATION
INTENDED TO BE RELEASED IS LIMITED TO INFORMATION RECORDED IN THE PUBLIC
RECORDS  AND/OR  A  CUSTOMER'S CUSTOMER IDENTIFICATION, PROVIDED THAT IN
EITHER CASE THE BANKING INSTITUTION HAS  GIVEN  WRITTEN  NOTICE  TO  THE
CUSTOMER OF THE INTENT OF THE BANKING INSTITUTION TO RELEASE SUCH INFOR-
MATION,  AND  THAT THE CUSTOMER HAS THE RIGHT TO PROHIBIT THE RELEASE OF
THIS INFORMATION BY NOTIFYING THE BANKING INSTITUTION IN WRITING OF  HIS
OR  HER OBJECTION, OR (III) TO THIRD PERSONS IF THE CUSTOMER INFORMATION
TO BE DISCLOSED IS CUSTOMER INFORMATION NOT CONTAINED IN A PUBLIC RECORD
PROVIDED THAT THE BANKING INSTITUTION HAS COMPLIED WITH THIS SECTION.
  (B) ANY DISCLOSURE PURSUANT TO SUBPARAGRAPH (I) OR (II)  OF  PARAGRAPH
(A)  OF  THIS  SUBDIVISION MAY BE MADE NO SOONER THAN FIFTEEN DAYS AFTER
THE CUSTOMER RECEIVED THE NOTICE, IF THE NOTICE WAS GIVEN IN PERSON,  OR
FIFTEEN  DAYS  AFTER THE NOTICE WAS MAILED TO THE CUSTOMER, AND SHALL BE
LIMITED TO THOSE CUSTOMERS OF  THE  BANKING  INSTITUTION  WHO  HAVE  NOT
OBJECTED  TO  THE RELEASE OF HIS OR HER CUSTOMER INFORMATION PURSUANT TO
THOSE PROVISIONS. SUCH NOTICE MAY BE GIVEN TO NEW CUSTOMERS AT THE  TIME
AN  ACCOUNT  IS  OPENED, AT THE TIME A LOAN OR MORTGAGE IS GRANTED OR AT
THE TIME THE CUSTOMER ENTERS INTO ANOTHER FORM OF FINANCIAL  TRANSACTION
WITH  THE BANKING INSTITUTION. SUCH NOTICE MAY ALSO BE PROVIDED TO OTHER
CUSTOMERS WITH OR IN A MONTHLY ACCOUNT STATEMENT, PERIODIC STATEMENT  OR
OTHER MAILING.
  (C) AT LEAST ONCE EVERY TWO YEARS AFTER A BANKING INSTITUTION RELEASES
A  CUSTOMER'S  CUSTOMER  INFORMATION  PURSUANT  TO PARAGRAPH (A) OF THIS
SUBDIVISION, A BANKING INSTITUTION THAT DESIRES TO CONTINUE  TO  RELEASE
CUSTOMER  INFORMATION  SHALL  PROVIDE  WRITTEN  NOTICE TO SUCH CUSTOMERS
REMINDING THEM THAT THE BANKING INSTITUTION MAY  RELEASE  SUCH  CUSTOMER
INFORMATION  AND  OF  THE  CUSTOMER'S  CONTINUING RIGHT TO WITHDRAW SUCH
AUTHORIZATION AT ANY TIME. THE NOTICE MUST CONTAIN AN ADDRESS WHERE  THE
CUSTOMER MAY REGISTER SUCH WITHDRAWAL OF CONSENT.

S. 2111                             3

  4. NOTWITHSTANDING SUBDIVISION THREE OF THIS SECTION, A BANKING INSTI-
TUTION MAY DISCLOSE ITS CUSTOMER INFORMATION TO THE FOLLOWING:
  (A)  ANY PERSON TO WHOM THE CUSTOMER HAS AFFIRMATIVELY AUTHORIZED SUCH
DISCLOSURE IN WRITING;
  (B) ANY DIRECTOR, OFFICER, OR EMPLOYEE OF A BANKING INSTITUTION HAVING
THE DUTY TO PREPARE, EXAMINE,  HANDLE,  MAINTAIN,  OR  PROCESS  CUSTOMER
INFORMATION  IN  THE  ORDINARY  COURSE  OF CONDUCTING THE BANKING INSTI-
TUTION'S BUSINESS;
  (C) ANY AGENT OF THE BANKING INSTITUTION, ANY  INDEPENDENT  CONTRACTOR
PROVIDING A SERVICE TO THE BANKING INSTITUTION IN THE ORDINARY COURSE OF
THE BANKING INSTITUTION'S BUSINESS, OR ANY PERSON PROVIDING PROFESSIONAL
SERVICES  TO  THE BANKING INSTITUTION, INCLUDING, BUT NOT LIMITED TO, AN
ACCOUNTANT ENGAGED BY THE BANKING INSTITUTION TO PREPARE AN  INDEPENDENT
AUDIT,  AN ATTORNEY PERFORMING A SERVICE ON BEHALF OF THE BANKING INSTI-
TUTION, AN AGENT OR OTHER PERSON REPRESENTING THE BANKING INSTITUTION IN
COLLECTING A DEBT OR OTHERWISE SECURING PAYMENT OF A LOAN OR ADVANCE;
  (D) ANY OFFICER, EMPLOYEE, OR AGENT OF THE BANKING BOARD FOR USE SOLE-
LY IN THE EXERCISE OF ITS DUTIES;
  (E) A FINANCIAL INSTITUTION, COMMERCIAL ENTERPRISE, OR CREDIT  REPORT-
ING  AGENCY,  WHEN SUCH DISCLOSURE IS PART OF AN EXCHANGE IN THE REGULAR
COURSE OF BUSINESS OF INFORMATION PERTAINING TO THE CREDIT-WORTHINESS OF
THE CUSTOMER BETWEEN A BANKING INSTITUTION AND ANOTHER FINANCIAL  INSTI-
TUTION  OR COMMERCIAL ENTERPRISE, DIRECTLY OR THROUGH A CREDIT REPORTING
AGENCY;
  (F) PERSONS TO WHOM REPORTS OR RETURNS MUST  BE  MADE  OR  INFORMATION
DISCLOSED PURSUANT TO STATE LAW OR REGULATIONS INCLUDING, BUT NOT LIMIT-
ED TO, THE DEPARTMENT OF TAXATION AND FINANCE, OR ANY GOVERNMENT AUTHOR-
ITY ACTING PURSUANT TO LAW;
  (G) PERSONS TO WHOM INFORMATION IS PERMITTED TO BE DISCLOSED UNDER LAW
CONCERNING THE DISHONOR OF A NEGOTIABLE INSTRUMENT;
  (H)  THE  BANKING  INSTITUTION'S  BOND OR INSURANCE COMPANIES WHEN THE
BANKING INSTITUTION HAS INFORMATION RELATIVE TO A CLAIM PURSUANT TO  ITS
BOND  OR  DIRECTOR'S  AND  OFFICER'S LIABILITY INSURANCE POLICY OR OTHER
INSURANCE COVERAGE;
  (I) ANY PERSON FOR THE PURPOSE OF ENGAGING IN A SECONDARY MARKET TRAN-
SACTION;
  (J) REPRESENTATIVES OF THE ATTORNEY GENERAL CONDUCTING CIVIL  INVESTI-
GATIONS, PURSUING CIVIL ACTIONS FOR THE PURPOSE OF ASSESSING CIVIL MONEY
PENALTIES, OR PURSUING FORFEITURES FOR VIOLATIONS OF BANKING INSTITUTION
CRIMINAL STATUTES; AND
  (K)  ANY PERSON NOT EXPRESSLY PERMITTED BY THIS SECTION IF THE BANKING
INSTITUTION RECEIVES THE PRIOR WRITTEN APPROVAL OF  THE  BANKING  BOARD,
WHICH MAY ESTABLISH THE TERMS AND CONDITIONS GOVERNING SUCH RELEASE.
  5.  PRIOR  TO  THE  RELEASE  BY  A BANKING INSTITUTION OF ITS CUSTOMER
INFORMATION AUTHORIZED BY PARAGRAPH  (A)  OF  SUBDIVISION  THREE  OR  BY
EXCEPTIONS  CONTAINED IN PARAGRAPH (A), (C), (E), (H) OR (I) OF SUBDIVI-
SION FOUR OF THIS SECTION SHALL REQUIRE INTENDED RECIPIENTS OF  CUSTOMER
INFORMATION  TO  EXECUTE  AN AGREEMENT STATING AT A MINIMUM THE SPECIFIC
USE TO BE MADE OF THE CUSTOMER INFORMATION  AND  PROHIBITING  SUBSEQUENT
DISCLOSURE  OF THE CUSTOMER INFORMATION TO A THIRD PARTY, EXCEPT IF SUCH
DISCLOSURE IS REQUIRED BY LAW OR PURSUANT TO THE CIRCUMSTANCES SET FORTH
IN PARAGRAPH (D), (F) OR (I) OF SUBDIVISION FOUR OF THIS  SECTION,  AND,
IF THE RECIPIENT OF THE CUSTOMER INFORMATION IS A CREDIT REPORTING AGEN-
CY,  SUBSEQUENT  DISCLOSURES  MAY  BE  MADE IN THE REGULAR COURSE OF THE
CREDIT REPORTING AGENCY'S BUSINESS.

S. 2111                             4

  6. (A) BEFORE RELEASING ANY CUSTOMER INFORMATION PURSUANT TO  SUBPARA-
GRAPH  (III)  OF  PARAGRAPH  (A) OF SUBDIVISION THREE OF THIS SECTION, A
BANKING INSTITUTION SHALL:
  (I) PROVIDE A COPY OF AN "INFORMED CONSENT FORM" TO ALL NEW AND EXIST-
ING  CUSTOMERS  OF THE BANKING INSTITUTION WHOSE CUSTOMER INFORMATION IS
NOT CONTAINED IN THE PUBLIC RECORDS INTENDED TO BE  DISCLOSED  TO  THIRD
PERSONS.  SUCH FORM MAY BE GIVEN TO NEW CUSTOMERS AT THE TIME AN ACCOUNT
IS OPENED, AT THE TIME A LOAN OR MORTGAGE APPLICATION IS  MADE,  AT  THE
TIME  A  LOAN  OR MORTGAGE IS GRANTED OR AT THE TIME THE CUSTOMER ENTERS
INTO ANOTHER FORM OF FINANCIAL TRANSACTION WITH THE BANKING INSTITUTION.
SUCH FORM MAY ALSO BE PROVIDED TO OTHER CUSTOMERS WITH OR IN  A  MONTHLY
ACCOUNT STATEMENT, PERIODIC STATEMENT OR OTHER MAILING. THE CONSENT FORM
SHALL CONTAIN:
  (A)  A  DEFINITION  OF  CUSTOMER INFORMATION NOT CONTAINED IN A PUBLIC
RECORD ("NON-PUBLIC CUSTOMER INFORMATION");
  (B) A STATEMENT THAT THE CUSTOMER HAS THE RIGHT TO WITHHOLD CONSENT TO
THE RELEASE OF HIS OR HER NON-PUBLIC CUSTOMER INFORMATION BY THE BANKING
INSTITUTION;
  (C) A DESCRIPTION OF THE TYPES OF BUSINESSES, ORGANIZATIONS, OR  OTHER
PERSONS  OR  ENTITIES  TO  WHOM  NON-PUBLIC  CUSTOMER INFORMATION MAY BE
DISCLOSED AND THE TIME PERIOD, NOT TO EXCEED TWO YEARS,  IN  WHICH  SUCH
DISCLOSURES MAY BE MADE;
  (D)  A STATEMENT THAT THE BANKING INSTITUTION MAY SEEK TO RELEASE NON-
PUBLIC CUSTOMER INFORMATION FOR A LONGER PERIOD THAN TWO YEARS,  AND  IF
AN  EXTENSION  IS SOUGHT, THE BANKING INSTITUTION SHALL PROVIDE A NOTICE
EXPLICITLY REMINDING THE CUSTOMER OF THE CUSTOMER'S PRIOR  AUTHORIZATION
AND THE CUSTOMER'S CONTINUING RIGHT TO WITHDRAW THAT AUTHORIZATION;
  (E) A STATEMENT THAT IF RELEASE IS CONTEMPLATED TO TYPES OF RECIPIENTS
OTHER  THAN THOSE FOR WHICH AUTHORIZATION IS SOUGHT THE BANKING INSTITU-
TION MUST OBTAIN NEW AUTHORIZATION FOR THE RELEASE;
  (F) A STATEMENT THAT THE CUSTOMER MAY AT ANY TIME PROVIDE THE  BANKING
INSTITUTION WITH WRITTEN NOTICE WITHDRAWING THE CUSTOMER'S PRIOR CONSENT
TO  RELEASE  NON-PUBLIC  CUSTOMER  INFORMATION  AND HOW AND TO WHOM SUCH
NOTICE MUST BE GIVEN;
  (G) A STATEMENT THAT NON-PUBLIC CUSTOMER INFORMATION MAY  BE  RELEASED
PURSUANT  TO  STATUTE  OR  REGULATION  EVEN  WHEN  NOT AUTHORIZED BY THE
CUSTOMER;
  (H) A STATEMENT AUTHORIZING THE RELEASE OF NON-PUBLIC CUSTOMER  INFOR-
MATION; AND
  (I)    A SPACE FOR THE CUSTOMER'S SIGNATURE AND FOR THE DATE THE DOCU-
MENT WAS EXECUTED.
  (II) RECEIVE A SIGNED AND DATED CONSENT FORM FROM THE CUSTOMER; AND
  (III) RETAIN A COPY OF EACH CONSENT FORM IN AN APPROPRIATE FILE  MAIN-
TAINED FOR THE CUSTOMER PROVIDING THE AUTHORIZATION.
  (B) A BANKING INSTITUTION SHALL FULFILL THE REQUIREMENT THAT IT OBTAIN
CONSENT  FROM  ITS  CUSTOMERS BEFORE DISCLOSING CUSTOMER INFORMATION NOT
CONTAINED IN A PUBLIC RECORD UNDER SUBPARAGRAPH (III) OF  PARAGRAPH  (A)
OF  SUBDIVISION THREE OF THIS SECTION BY PROVIDING A CLEAR AND CONSPICU-
OUS DOCUMENT CONTAINING THE INFORMATION SET FORTH IN  PARAGRAPH  (A)  OF
THIS  SUBDIVISION.  THE  FOLLOWING  COMPLIES  WITH THIS REQUIREMENT, BUT
BANKING INSTITUTIONS ARE PERMITTED TO DEVELOP THEIR OWN FORMS CONTAINING
THE REQUIRED INFORMATION:
              AUTHORIZATION TO DISCLOSE CUSTOMER INFORMATION
(CUSTOMER NAME)
(ACCOUNT/LOAN NUMBER(S))

S. 2111                             5

  UNDER APPLICABLE LAW AND REGULATIONS  (NAME  OF  BANKING  INSTITUTION)
MUST  OBTAIN  YOUR CONSENT TO DISCLOSE NON-PUBLIC INFORMATION CONCERNING
YOUR ACCOUNT BALANCES, LOANS, OR OTHER FINANCIAL ACTIVITIES  TO  VARIOUS
ENTITIES.  THIS INFORMATION THAT PERTAINS TO YOUR FINANCIAL TRANSACTIONS
IS KNOWN AS NON-PUBLIC CUSTOMER INFORMATION.
  (NAME  OF  BANKING  INSTITUTION)  DESIRES TO DISCLOSE SUCH INFORMATION
DURING THE NEXT (PERIOD OF TIME NOT TO  EXCEED  TWO  YEARS)  TO  (INSERT
TYPES  OF PERSONS OR ENTITIES TO WHICH THE CUSTOMER RECORDS ARE INTENDED
TO BE DISCLOSED). THESE PERSONS OR ENTITIES MAY CONTACT YOU TO OFFER YOU
A PRODUCT OR SERVICE. THESE PERSONS OR ENTITIES HAVE AGREED, OR WILL  BE
REQUIRED  TO AGREE, NOT TO DISCLOSE THIS INFORMATION TO ANY OTHER PERSON
OR BUSINESS, EXCEPT AS PERMITTED BY LAW AND REGULATION, AND HAVE  AGREED
THAT NON-PUBLIC CUSTOMER INFORMATION SHALL REMAIN CONFIDENTIAL. (NAME OF
BANKING  INSTITUTION)  MAY  RECEIVE  A  FEE  FOR THE RELEASE OF CUSTOMER
RECORDS.  IN THE EVENT THAT THE BANKING INSTITUTION WISHES  TO  DISCLOSE
SUCH INFORMATION TO PERSONS OR ENTITIES NOT DESCRIBED ABOVE, THE BANKING
INSTITUTION WILL SEEK REAUTHORIZATION. IN THE EVENT THE BANKING INSTITU-
TION  WISHES  TO  DISCLOSE  THIS  INFORMATION  BEYOND TWO YEARS, IT WILL
PROVIDE YOU WITH NOTICE.
  WITHOUT YOUR CONSENT, (NAME OF BANKING  INSTITUTION)  CANNOT  DISCLOSE
YOUR  NON-PUBLIC  CUSTOMER INFORMATION EXCEPT AS PROVIDED FOR BY LAW AND
REGULATION.
  IF YOU PROVIDE YOUR CONSENT TO DISCLOSE THIS INFORMATION NOW OR IN THE
FUTURE, YOU MAY WITHDRAW YOUR CONSENT AT ANY TIME. YOU MAY WITHDRAW YOUR
CONSENT BY WRITING  (NAME  OF  BANKING  INSTITUTION)  AT  THE  FOLLOWING
ADDRESS:
                       (NAME OF BANKING INSTITUTION)
                     (ADDRESS OF BANKING INSTITUTION)
                            (ATTN:            )
  IF,  AFTER READING THE FOLLOWING STATEMENT, YOU CONSENT TO THE RELEASE
OF NON-PUBLIC CUSTOMER INFORMATION, SIGN YOUR NAME ON THE SPACE PROVIDED
AND RETURN THIS FORM TO (NAME OF BANKING INSTITUTION).
                               AUTHORIZATION
I HEREBY PROVIDE MY CONSENT TO (NAME OF BANKING INSTITUTION) TO  RELEASE
MY NON-PUBLIC CUSTOMER INFORMATION TO THIRD PERSONS, AND UNDERSTAND THAT
I  MAY  WITHDRAW  SUCH  CONSENT  AT ANY TIME. I HAVE BEEN INFORMED OF MY
RIGHT TO WITHHOLD MY  CONSENT  FOR  (NAME  OF  BANKING  INSTITUTION)  TO
RELEASE  MY NON-PUBLIC CUSTOMER INFORMATION AND I HAVE READ THE INFORMA-
TION PRINTED ABOVE.
_________________      ________________
 NAME OF CUSTOMER             DATE
  (C) BANKING INSTITUTIONS SHALL NOT  RELEASE  ANY  PERSON'S  NON-PUBLIC
CUSTOMER  INFORMATION  AND  SHALL  TAKE SUCH AFFIRMATIVE STEPS AS MAY BE
NECESSARY TO INSURE THAT SUCH CUSTOMER INFORMATION IS NOT RELEASED:
  (I) IF THE CUSTOMER HAS NOT AUTHORIZED THE DISCLOSURE OF SUCH INFORMA-
TION;
  (II) IF AT ANY TIME, THE BANKING INSTITUTION RECEIVES WRITTEN  NOTIFI-
CATION  OF A CUSTOMER'S WITHDRAWAL OF CONSENT TO RELEASE CUSTOMER INFOR-
MATION PURSUANT TO THIS SECTION.
  (D) A CUSTOMER MAY, AT ANY TIME, WITHDRAW THE CONSENT  BY  WRITING  TO
THE BANKING INSTITUTION AND INFORMING IT OF THE WITHDRAWAL OF CONSENT.
  (E)  FOR THE PURPOSE OF COMPLIANCE WITH THE RENEWAL NOTICE REQUIREMENT
OF PARAGRAPH (C) OF SUBDIVISION THREE OF THIS  SECTION  FOR  RELEASE  OF
NON-PUBLIC  CUSTOMER  INFORMATION TO THIRD PERSONS, THE FOLLOWING NOTICE
WILL BE CONSIDERED TO BE IN COMPLIANCE  WITH  SUCH  PARAGRAPH  (C),  BUT

S. 2111                             6

BANKING  INSTITUTIONS  MAY  DEVELOP  THEIR OWN NOTICES PROVIDED THAT THE
EQUIVALENT INFORMATION IS CONTAINED THEREIN:
           RENEWAL NOTICE FOR RELEASE OF NON-PUBLIC INFORMATION
(NAME OF CUSTOMER)
(ACCOUNT/LOAN NUMBER(S))
YOU  PREVIOUSLY  GAVE  (NAME  OF  BANKING  INSTITUTION)  YOUR CONSENT TO
DISCLOSE NON-PUBLIC INFORMATION CONCERNING YOUR ACCOUNT BALANCES, LOANS,
OR OTHER FINANCIAL ACTIVITIES TO (TYPES OF PERSONS OR ENTITIES TO  WHICH
THE  CUSTOMER  INFORMATION  HAS  BEEN  DISCLOSED). THIS INFORMATION THAT
PERTAINS TO YOUR FINANCIAL TRANSACTIONS IS KNOWN AS NON-PUBLIC  CUSTOMER
INFORMATION.
(NAME OF BANKING INSTITUTION) IS REQUIRED BY LAW OR REGULATION TO INFORM
YOU  AT  LEAST EVERY TWO YEARS OF YOUR RIGHT TO WITHDRAW YOUR CONSENT AT
ANY TIME. IF YOU  DECIDE  TO  WITHDRAW  YOUR  CONSENT,  YOUR  NON-PUBLIC
CUSTOMER INFORMATION WILL NO LONGER BE DISCLOSED ONCE WE RECEIVE A WRIT-
TEN  NOTICE  WITHDRAWING  YOUR CONSENT. YOU MAY WITHDRAW YOUR CONSENT BY
WRITING TO THE FOLLOWING ADDRESS:
                       (NAME OF BANKING INSTITUTION)
                    (ADDRESS OF BANKING INSTITUTION)
           (ATTN: APPROPRIATE EMPLOYEE OF BANKING INSTITUTION)
  7. EVERY BANKING INSTITUTION SHALL CONFORM ITS METHODS OF  MAINTAINING
RECORDS  TO THE REQUIREMENTS OF THIS SECTION AND TO ANY SUCH REGULATIONS
AS PROMULGATED BY THE SUPERINTENDENT. ANY BANKING INSTITUTION THAT FAILS
TO ADHERE TO THE NOTIFICATION REQUIREMENTS PURSUANT TO PARAGRAPH (A)  OF
SUBDIVISION  THREE  OF THIS SECTION SHALL BE SUBJECT TO A PENALTY OF ONE
HUNDRED DOLLARS FOR EACH DAY IT SO REFUSES OR NEGLECTS TO ADHERE TO  THE
REQUIREMENTS. IN ADDITION, ANY BANKING INSTITUTION THAT FAILS TO PROVIDE
NOTICE  PURSUANT  TO  SUCH  PARAGRAPH  (A)  AND SUBSEQUENTLY DISCLOSES A
CUSTOMER'S CUSTOMER INFORMATION AND/OR A CUSTOMER'S CUSTOMER IDENTIFICA-
TION OR FAILS TO HONOR THE DISCLOSURE PREFERENCE REGARDING A  CUSTOMER'S
CUSTOMER  INFORMATION  AND/OR  CUSTOMER'S  CUSTOMER IDENTIFICATION SHALL
FORFEIT TO THE PEOPLE OF THE  STATE  THE  PROCEEDS  RECEIVED  FROM  SUCH
DISCLOSURE.
  8. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION THREE OR FOUR OF THIS
SECTION,  A  BANKING INSTITUTION SHALL DISCLOSE ITS CUSTOMER INFORMATION
TO PERSONS MAKING DEMAND PURSUANT TO LAWFUL SUBPOENA,  SUMMONS,  WARRANT
OR  COURT  ORDER  OR  IN RESPONSE TO A SUBPOENA FROM A GRAND JURY SERVED
UPON THE BANKING INSTITUTION.
  S 2. This act shall take effect on the first of January next  succeed-
ing the date on which it shall have become a law.

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Archive: Last Bill Status - In Senate Committee Banks Committee

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Sponsored By

Carl Kruger

Archive: Last Bill Status - In Senate Committee Banks Committee

Actions

2011-S2111 (ACTIVE) - Details

2011-S2111 (ACTIVE) - Summary

2011-S2111 (ACTIVE) - Sponsor Memo

2011-S2111 (ACTIVE) - Bill Text download pdf

Comments