TOPICS

Thursday, August 24, 2017

Promoting a Charity Event

QUESTION
We are a mortgage lender with several branch offices. 

One of our branch managers would like to send an email promoting a local charity event to all of her current and past clients, as well as the charity’s flyer promoting the event. 

The event is a 5k run/walk to raise awareness and funds for cystic fibrosis research and has nothing to do with company business. 

Are such mailings permissible? 

ANSWER
Essentially, the lender would be sending the charity’s marketing materials to the lender’s customers, which is not prohibited by the Gramm Leach Bliley Act and its implementing regulation, Regulation P. 

However, if an individual’s response to the flyer would reveal to the charity that the individual is a customer of the lender, there would be an inadvertent disclosure by the lender of non-public personal information (NPI) in violation of the Act. 

For example, let’s assume the charity wanted to track the effectiveness of its marketing efforts and includes a reference code only attributable to the lender on the flyer, which also served as the event registration form. 

Thus, when an individual uses the form to register, the lender has disclosed NPI to the charity, that is, the individual is the lender’s customer. In order to comply with the Act, the lender would have had to either disclose in its initial and annual privacy statement that it shares customer’s NPI with "nonfinancial institutions, such as charitable organizations" and provide the customer with a reasonable opportunity to opt out of such sharing or obtain the customer’s consent to such arrangements.

Joyce Wilkins Pollison, Esq.
Director/Legal & Regulatory Compliance
Lenders Compliance Group