R. Kinney Williams & Associates
R. Kinney Williams
& Associates

Internet Banking News

March 31, 2002

FYI - Specially Designated Nationals and Blocked Persons - On March 11, 2002, the Department of the Treasury's Office of Foreign Assets Control (OFAC) amended its listing of Specially Designated Nationals and Blocked Persons by adding two names of Specially Designated Narcotics Traffickers. Their assets must be blocked immediately.

FYI - Specially Designated Nationals and Blocked Persons - On March 15, 2002, the Director of the Office of Foreign Assets Control authorized address changes for two entities on OFAC's Specially Designated Nationals and Blocked Persons list.

- Advertisements

Generally, Internet web sites are considered advertising by the regulatory agencies. In some cases, the regulations contain special rules for multiple-page advertisements. It is not yet clear what would constitute a single "page" in the context of the Internet or on-line text. Thus, institutions should carefully review their on-line advertisements in an effort to minimize compliance risk.

In addition, Internet or other systems in which a credit application can be made on-line may be considered "places of business" under HUD's rules prescribing lobby notices. Thus, institutions may want to consider including the "lobby notice," particularly in the case of interactive systems that accept applications.

- We continue covering some of the issues discussed in the "Risk Management Principles for Electronic Banking" published by the Basel Committee on Bank Supervision in May 2001.

Sound Practices to Help Maintain the Privacy of Customer E-Banking Information

1. Banks should employ appropriate cryptographic techniques, specific protocols or other security controls to ensure the confidentiality of customer e-banking data.

2. Banks should develop appropriate procedures and controls to periodically assess its customer security infrastructure and protocols for e-banking.

3. Banks should ensure that its third-party service providers have confidentiality and privacy policies that are consistent with their own.

4. Banks should take appropriate steps to inform e-banking customers about the confidentiality and privacy of their information. These steps may include:

a)   Informing customers of the bank’s privacy policy, possibly on the bank’s website. Clear, concise language in such statements is essential to assure that the customer fully understands the privacy policy. Lengthy legal descriptions, while accurate, are likely to go unread by the majority of customers.

b)   Instructing customers on the need to protect their passwords, personal identification numbers (PINs) and other banking and/or personal data. 

c)   Providing customers with information regarding the general security of their personal computer, including the benefits of using virus protection software, physical access controls and personal firewalls for static Internet connections.

- We continue our series listing the regulatory-privacy examination questions.  When you answer the question each week, you will help ensure compliance with the privacy regulations.

Annual Privacy Notice

7)  Does the institution provide an annual privacy notice to each customer whose loan the institution owns the right to service? [§§5(c), 4(c)(2)]


PLEASE NOTE:  Some of the above links may have expired, especially those from news organizations.  We may have a copy of the article, so please e-mail us at examiner@yennik.com if we can be of assistance.  

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