To: All Member Banks and Others Concerned in the Third Federal Reserve District

Attention: Chief Executive Officer and Chief Compliance Officer



The Board of Governors of the Federal Reserve System and the other federal financial institutions supervisory agencies have issued proposed regulations that would give consumers the chance to "opt out" before a financial institution uses information provided by an affiliated company to market its products and services to the consumer.

The proposed rulemaking would implement the affiliate marketing provisions in section 214 of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), which adds a new section 624 to the Fair Credit Reporting Act (FCRA). The proposal generally would prohibit an institution from using certain information about a consumer it receives from an affiliate to make a solicitation to the consumer unless the consumer has been given notice and an opportunity to opt out of the solicitation. An institution that has a pre-existing business relationship with the consumer would not be subject to this marketing limitation. Nothing in the new affiliate marketing opt out supercedes or replaces the provisions in section 603 of the FCRA concerning the right to opt out of the sharing of information among affiliates, although there is some overlap between the two opt out requirements.

The Federal Register notice, published July 15, 2004, is available here (450 KB, 135 pages).

Date: Comment is expected within 30 days of publication in the Federal Register.

For Further Information: David A. Stein, Counsel; Minh-Duc T. Le, Ky Tran-Trong, or Krista P. DeLargy, Senior Attorneys, Division of Consumer and Community Affairs, (202) 452-3667 or (202) 452-2412; or Thomas E. Scanlon, Counsel, Legal Division, (202) 452-3594. For users of Telecommunications Device for the Deaf ("TDD") only, contact (202) 263-4869.