- FTC Offers Guidance to Mortgage Brokers on Compliance with Privacy Regulations
- July 17, 2003
- Law Firm: Blank Rome LLP - Philadelphia Office
The Federal Trade Commission issued a series of frequency asked questions and answers regarding the extent to which the privacy regulations issued by the FTC ("FTC Privacy Regulations") under the Gramm Leach Bliley Act ("GLB") apply to mortgage brokers. Below is a summary of the FTC's guidance:
Are mortgage brokers subject to privacy requirements?
Mortgage brokers are subject to the requirements of GLB and the FTC Privacy Regulations because brokering loans is a financial activity that is covered by GLB and the FTC Privacy Regulations.
When is a customer relationship established?
An initial privacy notice may be provided to the customer at the time the customer meets with the mortgage broker to fill out an application, as such individual is providing personally identifiable financial information and therefore a customer relationship is established. An initial privacy notice may also be given on-line if applicants acknowledge its receipt not later than when they submit their application information.
Must a customer be able to opt out of disclosure of information to lenders and credit reporting agencies with whom the mortgage broker shares information?
A mortgage broker is permitted to share customer information as is necessary to process service and administer the loan without providing the customer the opportunity to opt out of such limited purpose disclosure. Disclosure of customer information for processing, administering and servicing a loan as well as disclosure of information to a credit reporting agency are specific exceptions to the opt out requirement under GLB.