Database decisions could play a big role in determining how new financial institution affiliate marketing provisions apply to specific marketing campaigns.
Officials at the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration come to that conclusion today in a discussion of the final version of the Fair Credit Reporting Affiliate Marketing Regulations.
The final rules and a preamble appear today in the Federal Register.
Several long sections refer to insurance marketing campaigns.
The rules, based on proposed regulations released in July 2004, are set to take effect Jan. 1, 2008.
The rules describe when banks and other financial institutions can and cannot share customers’ financial information with affiliates, along with the opportunities institutions must give customers to opt out of marketing campaigns.
The rules are more flexible for financial services companies or other “persons” with “pre-existing business relationships” with consumers than they are for other persons.
Officials note that they responded to comments from insurers by making it clear in the final rules that the “licensed agent” of a “person” that has a pre-existing business relationship with a consumer also has a pre-existing business relationship with the consumer.
If, for example, a consumer buys an ABC auto insurance policy through a licensed agent, “the licensed agent may use eligibility information about the consumer to market ABC life and homeowner’s insurance policies to the consumer for the duration of the pre-existing business relationship without offering the consumer the opportunity to opt out of that use,” officials write in the preamble.
The officials described another example involving an insurance company that asks an affiliated bank to send insurance company marketing materials to a list of consumers who meet the insurance company’s eligibility criteria.
The insurance company then would contact the consumers only if the consumers responded to the marketing materials.
Consumer groups have argued that “constructive sharing contravenes the intent of Congress and amounts to a loophole that should be fixed,” officials write.