MEMBERS OF THE New Hampshire Bar were recently mailed a reminder of their need to comply with the financial privacy requirements of Title V of the Gramm-Leach-Bliley Act. Enacted in 1999, the Act was intended as a regulatory measure for financial institutions. In June of 2001, lawyers around the country were surprised to find that the Federal Trade Commission had determined that the regulatory requirements of the Act applied to lawyers and law firms.

The Act requires financial institutions to provide customers with periodic notices regarding the institution's privacy protection policies. A "financial institution" is defined by the Act to include all businesses that are "significantly engaged" in certain listed activities deemed to be financial in nature. Among the listed activities are tax planning and return preparation services; debt collection; financial, investment, and economic advisory services; and real estate settlement services. Many lawyers and law firms engage in these activities in the course of their practices.

Among the American Bar Association's 2002 legislative and governmental priorities is the exemption of attorneys engaged in the practice of law from the requirements of Title V. While the ABA had made such a formal request of the FTC, it has not been acted upon. On Feb. 11, 2002, a bipartisan group of House of Representatives members sent a letter to the FTC, citing lack of support in the legislative record for extension of Title V to attorneys, and called for the grant of the exemption previously requested. To date, no FTC action has been taken.

The prudent course for New Hampshire lawyers and law firms, then, is to comply with the existing law by providing an appropriate notice statement to clients for whom financial services within the definitions of the Act have been provided. The NHBA has provided its members with a sample law firm privacy notice that meets the requirements of the Act. The statement is posted in the Member Benefits area of this site.

Charles F. Huxsaw is the NHBA's director of Professional Development.

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