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Kleczka-Ryan Bank ID Theft Notification Proposal Adopted

Agencies Would Require Banks to Inform Customers When Their Information is Compromised

WASHINGTON, D.C. – A little less than a year after Congressmen Jerry Kleczka and Paul Ryan introduced legislation requiring banks to promptly notify customers when their sensitive financial information is stolen, federal banking authorities today announced a proposed rule that would implement just such a proposal. 

“Today the agencies overseeing our financial institutions have wisely proposed adding a necessary safeguard to help consumers defend themselves from identity theft,” Kleczka said. 

“This is a great step in the right direction.  It’s a no-brainer that banks should notify their customers if their financial privacy has been compromised in any way,” Ryan said. 

Kleczka and Ryan first sponsored their Identity Theft Consumer Notification Act last year after it was discovered that over 250 customers of a Pewaukee bank branch had personal information stolen. Compounding the problem for the customers was the fact that they were not told that their personal and financial records had been compromised until eight months after bank officials learned of the theft. In the meantime, the victims had no idea that this personal data had been sold to a ring of identity thieves who were using the financial records to make purchases in the victims’ names, including a Jaguar.

 Like the bill, the proposed rule published in today’s Federal Register would require banks to provide timely notice to their customers whose sensitive information had been accessed or used without authorization.   

“Financial institution customers have the right to know when their critical information has been compromised,” Kleczka said. “And prompt notice gives them the power to minimize the threat of identity theft by quickly notifying credit reporting agencies, checking their credit report for evidence of financial fraud, and requesting that their credit report be flagged with a ‘fraud alert’ to warn potential creditors.” 

Kleczka and Ryan’s legislation, H.R. 818, would also require that banks take additional steps to help affected consumers remedy any damage to their credit history and reimburse them for any losses incurred, two provisions which were not included in the proposed rule.  The bill is pending in the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. 

The rule, issued jointly by the Office of the Comptroller of the Currency, the Office of Thrift Supervision, the Federal Reserve, and the Federal Deposit Insurance Corporation, is subject to a 60-day comment period and additional time for any necessary changes by the agencies before it can become final.

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