Privacy Examinations

Donna Tanoue, Chairman of the FDIC, advised students at ABA's compliance schools that the new privacy examinations will go through several phases. The primary objective of the initial examination will be to assess the quality of the compliance management program for implementing privacy.

Examination scope will be determined by whether and the extent to which the institution shares information with affiliates and non-affiliates. The examination procedures are designed in modules so that examiners can select procedures appropriate to the situation in the bank being examined.

Examiners will do several things during the privacy exam. They will conduct interviews with officers about privacy practices and the use of customer information. They will also look for an effective internal control program, employee training, management oversight, and a process for resolving consumer complaints. Finally, the examiners will review all documents, including disclosures, policies, procedures, and agreements with third parties relating to information sharing and information protection.

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 3, 4/01