Bill Text: NJ S1538 | 2010-2011 | Regular Session | Introduced
Bill Title: Prohibits certain disclosure of nonpublic personal financial information by financial institutions to nonaffiliated third parties.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2010-02-22 - Introduced in the Senate, Referred to Senate Commerce Committee [S1538 Detail]
Download: New_Jersey-2010-S1538-Introduced.html
Sponsored by:
Senator RONALD L. RICE
District 28 (Essex)
Co-Sponsored by:
Senator Weinberg
SYNOPSIS
Prohibits certain disclosure of nonpublic personal financial information by financial institutions to nonaffiliated third parties.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning disclosure of certain personal financial information and supplementing P.L.1998, c.121 (C.17:16T-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Affiliate" means any entity that controls, is controlled by, or is under common control with, the financial institution.
"Customer" means an individual who obtains financial products or services from a financial institution which are to be used primarily for personal, family or household purposes, and includes the legal representative of the individual.
"Financial institution" means a State or federally chartered bank, savings bank, savings and loan association or credit union, or any affiliate thereof.
"Nonaffiliated third party" means any entity that is not an affiliate of the financial institution.
"Nonpublic personal information" means any personally identifiable financial information that is not publicly available and is provided by a customer to a financial institution, resulting from any transaction with the customer or any service performed for the customer, or otherwise obtained by the financial institution.
2. a. A financial institution, directly or through an affiliate, may not disclose to a nonaffiliated third party any nonpublic personal information, unless the financial institution has provided to the customer a notice that:
(1) contains the signal word "URGENT" at the top of the notice;
(2) clearly and conspicuously informs the customer that the customer has the right to prevent nonpublic personal information from being disclosed to nonaffiliated third parties;
(3) contains a clear and conspicuous explanation of how the customer can prevent nonpublic personal information from being disclosed to nonaffiliated third parties;
(4) contains a box or space in which the customer can make a mark to indicate that the customer does not grant the financial institution permission to disclose nonpublic personal information to nonaffiliated third parties;
(5) contains a toll-free telephone number at which the financial institution can be reached; and
(6) is accompanied by a postage-paid envelope bearing the financial institution's mailing address.
b. A financial institution
shall provide the notice described in this section to a customer at the time of
establishing the customer relationship, or for existing customers, within 60
days of the
effective date of this act, and then not less than annually during the
continuation of the customer relationship.
c. The notice required by this section, except for the notice given at the time of establishing a customer relationship, may be included as a separate document in any mailing.
3. A financial institution shall not disclose nonpublic personal information concerning an individual to a nonaffiliated third party if the individual has indicated at any time, by returning the notice described in section 2 of this act, or by any other method, that the individual does not grant permission for disclosure of nonpublic personal information to nonaffiliated third parties. Once a customer has so indicated, the financial institution may not disclose the nonpublic personal information to a nonaffiliated third party unless the customer expressly grants permission for disclosure of the information.
4. No individual shall be denied any financial services for refusing to grant permission for disclosure of nonpublic personal information to a nonaffiliated third party.
5. This act shall not prevent a financial institution from providing nonpublic personal information for the following purposes:
a. pursuant to section 3 of P.L.1998, c.121 (C. 17:16T-3);
b. pursuant to the Fair Credit Reporting Act, 15 U.S.C.1681 et seq.;
c. as necessary to effect, administer or enforce a transaction requested or authorized by a customer;
d. as necessary to maintain or service a customer's account with the financial institution; or
e. as necessary to comply with State or federal law or to protect the financial institution's legal interests.
6. Any financial institution that discloses nonpublic personal information in violation of this act shall be subject to a fine of not more than $500 for each disclosure. The fine shall be collected in a summary manner pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.)
7. This act shall take effect immediately.
STATEMENT
This bill protects the privacy of customers of financial institutions in the State by prohibiting disclosure in certain instances, of a person's nonpublic personal financial information by financial institutions to nonaffiliated third parties. The bill mandates that financial institutions send each customer an annual notice that clearly and conveniently offers the customer the opportunity to prohibit disclosure of nonpublic personal information to nonaffiliated third parties, except in certain circumstances, such as where disclosure is required by State or federal law, or is necessary to assist the customer or protect the institution's legal interests.
