Compliance Blog

NCUA's privacy regulation and the ever-approaching affiliate marketing rules raise an interesting issue for credit unions.  I call it the consumer opt out confusion issue.  Under both regulatory structures, credit unions might have to offer members the right to opt out of certain information sharing practices. 

Where does the confusion come in?  The opt-outs noted above are very limited in scope.  One limits the ability of a credit union to share information with third parties, and the other limits the ability of credit unions to share/use information with affiliates for marketing purposes.  There are a number of exceptions to these opt-outs; some are large enough to drive a truck through.  For credit unions that do or will offer opt-outs, I wonder whether members understand what they are really opting out from. (Yes, I know that sentence ended in a preposition.  What was I thinking of?)  My guess is that many members do not.  They may view these opt outs as a way to "unsubscribe" from marketing campaigns.  At the very least, members that select an opt-out are raising their hand to let you know how much they value their personal information and privacy. 

With that in mind, I spoke with a credit union today that gives their members the right to a "marketing opt-out."  These members have the right to exclude themselves from all credit union marketing campaigns.  (Interestingly, this credit union currently does not need to offer their members an opt-out under the privacy rules and does not plan on offering an affiliate information opt-out.)  I asked how it worked, and the compliance officer said that it seemed to keep a very specific segment of their membership happy.  "And happy members deposit more," she added.

The affiliate marketing rule contains a model disclosure (in Appendix C) along these lines.  Here's what it says:

C–5—Model Form for Voluntary ‘‘No  Marketing’’ Notice—Your Choice To Stop Marketing
• [Name of Affiliate] is providing this notice.
• You may choose to stop all marketing from us and our affiliates. To stop all marketing, contact us [include
all that apply]:
• By telephone: 1–877–###–####
• On the Web: www.---.com
• By mail: Check the box and complete the form below, and send the form to:
[Company name]
[Company address]
____ Do not market to me.

While there's no requirement to offer such an opt out, I think it is a good way to manage member expectations and manage your reputation risk.  Do any of you offer this marketing opt-out?  How is it working?  (To add a comment if you received this posting via email, you'll need to click on the title above, scroll to the bottom of the posting, and then...well, follow directions.)

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Last Thursday, NAFCU's softball squad (4-8) was pummelled by the undefeated Llamas.  I'm not even going to share the scores.  Let's put it this way, one at bat by our opponents lasted 45 minutes.  No joke.  If it weren't for the fence, some of their hits would still be rolling.  Now, I'm not saying that the Llamas were using ringers, but 4 of their women hit from the left side and looked like they were employed as college softball hitting coaches.  Not that I'm bitter about it.