Calendar year definition

Question: The Privacy regulation requires us to provide "annual" privacy notices. The regulation defines annual as at least once in a calendar year. So, what exactly is a calendar year? We sent our first notices in May of 2001. Does this mean that we must send our annual notices in May, 2002 or can we wait until September - or even December?

Answer: This is a common question just now and the people who actually wrote the regulation have given slightly different answers. Some said that a calendar year is 12 months and annual notices must be given within that 12-month period. Others said that a calendar year is a calendar year and anytime during that calendar year is ok.

The new Q&As released by the agencies give some "final" guidance to this question, and just in time. Because if you have to get notices out by May of 2002, it is time to start the ball rolling. The Q&A basically allows both interpretations - a very cordial way to put an end to the regulators' dispute. So here is what you can and must do with the next round of notices.

The best approach is to use an annual cycle, sending notices every twelve months. However, for this coming year, you have the opportunity to choose the notification cycle that works best for your institution. You could choose to send the privacy notices with a statement cycle that covers most deposit accounts and loans. Or you can choose to send a separate privacy mailing.

You might want to consider how the consumers will perceive the next round of notices. It is likely that many institutions will choose to send notices on the anniversary of last year's notices. That means that your customers could wonder why they haven't heard from you. This doesn't mean that you should be locked in to the same schedule. But it might be a good idea to put privacy reminders on statements or other materials that you send to your customers.

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 15, 12/01