Anyone drafting privacy policies for plans providing loans?

[Guest hank]

The FTC issued privacy regulations under the banking reform law (Gramm-Leach-Bliley). The regs exempt employee benefit plans from the privacy requirements of the new law, but the regs also suggest that retirement plans which permit participant loans may be subject to the privacy requirements at the time of making such a loan.

I've heard informally that the FTC and banking regulators feel strongly that a plan which makes loans is subject to the privacy requirements and that a plan administrator must develop a privacy policy for annual disclosure to the plan's "customers" who borrow.

Does anyone have better info on this topic? And is anyone preparing privacy policies for their plans?

[Guest hank]

OK. Let's pose the question another way. Has anyone been told by their TPAs, outside/inside counsel, accountants, et al. that if their qualified plans permit loans to participants, their plans may be "financial institutions" subject to some or all of the privacy requirements in the new banking law?

This has a mandatory July 1, 2001 compliance date, so I'm told.

[RCK]

We are a plan sponsor (with 35 plans, and total assets of about one billion) and we have not heard a word about this from any of our service providers.

RCK