U.S. Supreme Court Justice Louis Brandeis once described privacy as “the right to be left alone - the most comprehensive of rights, and the right most valued by a free people.” At the core of privacy concerns is the perception (often coupled with the reality) that people are losing control over personal information to third parties, including financial institutions.
Therefore, the issue of financial privacy has become a topic that Congress cares about, the Legislature cares about, regulators care about, examiners care about and, most important, customers care about. At the same time, there are several state and federal laws that provide exceptions to the “right of financial privacy” for law enforcement and other public policy purposes. The laws and exceptions create a tension for financial institutions and emphasize the necessity to know when and when not to disclose information and with whom. In any case, one of the most important assets a financial institution may hold is its customer’s trust. Therefore, the protection of customer privacy is good for the bottom line. In order to earn and maintain customer trust, many financial institutions take additional affirmative steps with the goal of calming customer concerns. These additional actions taken by financial institutions are often beyond minimum compliance with the “letter of the law”; rather, these actions attempt to implement policies and procedures consistent with the “spirit of the law.” Most would agree that not protecting customer privacy could be disastrous – both jeopardizing a most valuable asset and risking noncompliance with state and federal laws and regulations.
The articles contained within this section of the NBA Compliance Handbook summarize Nebraska privacy and disclosure of financial information laws, federal privacy and disclosure laws, the Gramm-Leach Act, HIPAA, regulatory privacy guidelines, internet privacy laws and concerns and the issues of identity theft and pretext calling.