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Can I collect financial information from participants in South Dakota? What are the requirements?

To collect financial information from participants in South Dakota, you must comply with the South Dakota privacy laws. The South Dakota privacy laws require that you provide notice to consumers about your privacy practices and give them the opportunity to opt-out of certain disclosures of their nonpublic personal financial information [2.2].

Exceptions to the notice and opt-out requirements apply when a licensee discloses nonpublic personal financial information with the consent or at the direction of the consumer, to protect the confidentiality or security of a licensee’s records pertaining to the consumer, to protect against or prevent actual or potential fraud or unauthorized transactions, for required institutional risk control or for resolving consumer disputes or inquiries, to persons holding a legal or beneficial interest relating to the consumer, or to persons acting in a fiduciary or representative capacity on behalf of the consumer [2.2].

Additionally, the licensee may disclose nonpublic personal financial information pursuant to an exception in § 20:06:45:14 or 20:06:45:15, in the ordinary course of business to carry out the activity covered by the exception under which the licensee received the information [2.3].

There is also an exception to the opt-out requirements for disclosure of nonpublic personal financial information for service providers and joint marketing [2.1]. The opt-out requirements do not apply when a licensee provides nonpublic personal financial information to a nonaffiliated third party to perform services for the licensee or functions on the licensee’s behalf, if the licensee provides the initial notice in accordance with § 20:06:45:04 and enters into a contractual agreement with the third party that prohibits the third party from disclosing or using the information other than to carry out the purposes for which the licensee disclosed the information, including use under an exception in § 20:06:45:14 or 20:06:45:15 in the ordinary course of business to carry out those purposes [2.1].

Therefore, to collect financial information from participants in South Dakota, you must provide notice to consumers about your privacy practices and give them the opportunity to opt-out of certain disclosures of their nonpublic personal financial information. Exceptions to the notice and opt-out requirements apply when the licensee discloses nonpublic personal financial information with the consent or at the direction of the consumer, to protect the confidentiality or security of a licensee’s records pertaining to the consumer, to protect against or prevent actual or potential fraud or unauthorized transactions, for required institutional risk control or for resolving consumer disputes or inquiries, to persons holding a legal or beneficial interest relating to the consumer, or to persons acting in a fiduciary or representative capacity on behalf of the consumer. Additionally, the licensee may disclose nonpublic personal financial information pursuant to an exception in § 20:06:45:14 or 20:06:45:15, in the ordinary course of business to carry out the activity covered by the exception under which the licensee received the information. There is also an exception to the opt-out requirements for disclosure of nonpublic personal financial information for service providers and joint marketing.

Source(s):
Jurisdiction

South Dakota