SEC to Require Proper Disposal of Consumer Information

Washington, DC, October 22, 2004 - The Institute supports an SEC proposal that will require funds and others who must register their securities issues with the agency to properly dispose of certain consumer information. While supporting the SEC approach to enhancing consumer privacy protection, ICI recommended changes to the proposal in a recent comment letter.

Background
In September 2004, the SEC proposed revisions to Regulation S-P that were mandated by the recent enactment of the Fair and Accurate Credit Transactions Act (FACTA). The revisions are intended to prevent the unauthorized disclosure of sensitive consumer information and reduce the risk of fraud or related crimes, including identity theft, by ensuring that such information is disposed of properly.

Pursuant to FACTA, the proposed rule must be issued by the Commission in final form no later than December 4, 2003.

ICI Position
In its comments, the Institute made a number of recommendations to ensure that the rule takes into account all forms of information, including electronic records. The Institute urged the SEC to:

revise the definition of "consumer report information" to limit the term to any personally identifiable record about an individual; and
implement a flexible standard for the disposal of information, which permits covered entities to take reasonable measures to protect against unauthorized access to or use of the information in connection with its disposal.

Related Links
A section of this website is devoted to privacy issues.