WASHINGTON—A New Jersey Superior Court order would force a bank to disclose personal information of its 43,000 member-depositors to an unaffiliated, unregulated third party, a decision over which NAFCU, CUNA and other financial services industry trade groups are expressing concern.
The groups have shared those concerns in a letter to the CFPB.
Elmwood Park, N.J.-based Spencer Savings Bank – a mutual thrift that, much like a credit union, is owned by its member-depositors – is being ordered to break Gramm-Leach-Bliley Act (GLBA) data privacy requirements in the court’s Seidman v. Spencer Savings Bank decision, according to the groups. The Superior Court granted a request from Seidman’s counsel to force the bank to provide the names and contact information of each member-depositor to Seidman’s proxy solicitor, NAFCU reported.
In a letter to the CFPB, the trade groups called on the Bureau to track the lawsuit and similar legislation and to partner with state financial regulators to uphold the GLBA.
‘Regulators Lack the Capacity’
“It is obvious that many state financial regulators lack the capacity to effectively implement, enforce, and defend the GLBA,” the groups wrote. “In these instances, the Associations strongly urge the CFPB to more fully partner with state financial regulators and take other action as appropriate to uphold the GLBA and to issue guidance providing that states may not flout Regulation P’s requirements through legislative, regulatory, executive, or judicial means.”
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