[Code of Federal Regulations]
[Title 16, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 16CFR313.5]

[Page 395-396]
 
                     TITLE 16--COMMERCIAL PRACTICES
 
                   CHAPTER I--FEDERAL TRADE COMMISSION
 
PART 313_PRIVACY OF CONSUMER FINANCIAL INFORMATION--Table of Contents
 
                  Subpart A_Privacy and Opt Out Notices
 
Sec. 313.5  Annual privacy notice to customers required.

    (a)(1) General rule. You must provide a clear and conspicuous notice 
to customers that accurately reflects your privacy policies and 
practices not less than annually during the continuation of the customer 
relationship. Annually means at least once in any period of 12 
consecutive months during which that relationship exists. You may define 
the 12-consecutive-month period, but you must apply it to the customer 
on a consistent basis.
    (2) Example. You provide a notice annually if you define the 12-
consecutive-month period as a calendar year and provide the annual 
notice to the customer once in each calendar year following the calendar 
year in which you provided the initial notice. For example, if a 
customer opens an account on any day of year 1, you must provide an 
annual notice to that customer by December 31 of year 2.
    (b)(1) Termination of customer relationship. You are not required to 
provide an annual notice to a former customer.
    (2) Examples. Your customer becomes a former customer when:
    (i) In the case of a closed-end loan, the customer pays the loan in 
full, you charge off the loan, or you sell the loan without retaining 
servicing rights;
    (ii) In the case of a credit card relationship or other open-end 
credit relationship, you sell the receivables without retaining 
servicing rights;
    (iii) In the case of credit counseling services, the customer has 
failed to make required payments under a debt management plan, has been 
notified that the plan is terminated, and you no longer provide any 
statements or notices to the customer concerning that relationship;
    (iv) In the case of mortgage or vehicle loan brokering services, 
your customer has obtained a loan through you (and you no longer provide 
any statements or notices to the customer concerning that relationship), 
or has ceased using your services for such purposes;
    (v) In the case of tax preparation services, you have provided and 
received payment for the service and no longer provide any statements or 
notices to the customer concerning that relationship;
    (vi) In the case of providing real estate settlement services, at 
the time the customer completes execution of all documents related to 
the real estate closing, you have received payment, or you have 
completed all of your responsibilities with respect to the settlement, 
including filing documents on the public record, whichever is later.
    (vii) In cases where there is no definitive time at which the 
customer relationship has terminated, you have not communicated with the 
customer about the relationship for a period of 12 consecutive months, 
other than to provide annual privacy notices or promotional material.
    (c) Special rule for loans. If you do not have a customer 
relationship with a consumer under the special rule for loans in Sec. 
313.4(c)(2), then you need not

[[Page 396]]

provide an annual notice to that consumer under this section.
    (d) Delivery. When you are required to deliver an annual privacy 
notice by this section, you must deliver it according to Sec. 313.9.