Initial Privacy Notice

D

Certainly!

The acronym "CRCM" stands for Certified Regulatory Compliance Manager, which is a certification offered by the American Bankers Association for professionals who are responsible for managing regulatory compliance within financial institutions.

The question relates to the initial privacy notice requirement for financial institutions under various regulatory provisions, namely:

• 12 CFR 332.4 - Privacy of Consumer Financial Information
• 12 CFR 40.4 - Privacy of Consumer Financial Information (Regulation P)
• 12 CFR 216.4 - Privacy of Consumer Financial Information (Gramm-Leach-Bliley Act)
• 12 CFR 573.4 - Privacy of Consumer Financial Information (Savings and Loan Holding Companies)

The initial privacy notice is a disclosure that financial institutions must provide to consumers (including customers and non-customers) at the beginning of their relationship, informing them of the institution's policies and practices with respect to the collection, use, and sharing of their nonpublic personal information.

Now, let's go through each of the answer options to see which one accurately describes the requirements for the initial privacy notice:

A. A notice must be given to a consumer before the institution discloses any nonpublic personal information about the consumer to a nonaffiliated third party, unless the disclosure is on the exempt list.

This answer is correct. Financial institutions must provide the initial privacy notice to a consumer before sharing their nonpublic personal information with nonaffiliated third parties, unless the sharing falls under an exempt category such as sharing for the purposes of servicing or processing a financial product or service requested by the consumer.

B. A notice is not required to be given to a consumer who is not a customer if the financial institution does not disclose any nonpublic personal information about the consumer to any nonaffiliated third party, other than as authorized by this regulation.

This answer is partially correct. Financial institutions must provide the initial privacy notice to all consumers, including non-customers, regardless of whether or not they share their nonpublic personal information with nonaffiliated third parties. However, the notice does not need to be provided if the institution does not share any nonpublic personal information with nonaffiliated third parties, other than as permitted by the regulations.

C. Only one notice is required to be provided on joint accounts. Therefore only one notice needs to be provided to consumer loan customers even if there is more than one borrower and even if there is a separate guarantor.

This answer is incorrect. Financial institutions must provide the initial privacy notice to each individual who is a party to a joint account, not just one notice to the account as a whole. Additionally, separate notices must be provided to each borrower and guarantor of a consumer loan.

D. All of these.

This answer is also correct, as all three of the previous answer options contain at least partially correct information about the initial privacy notice requirement.