Recent passage of the Financial Services Regulatory Relief Act of 2006, championed in the U.S. Senate by Debbie Stabenow, now exempts CPAs from the requirement to provide redundant annual disclosure to clients.

The changes were signed into law in October 2006. Until then, a provision of the federal Gramm-Leach-Bliley Act required “financial institutions,” including CPA firms performing tax preparation services, to disclose to clients if and how personal financial information is shared. The original intent of the Act was to protect the public by requiring the institution to disclose procedures for ensuring confidentiality.

Because Michigan statute and the provisions of the AICPA Code of Professional Conduct already protect clients’ personal financial information, the procedures defined by Gramm-Leach-Bliley placed additional unnecessary regulation on CPAs. Firms both large and small had experienced this burden both financially and administratively.

MACPA staff and Legislative Advisory Group members made it a point to discuss the Association’s position on this legislation with U.S. Senator Debbie Stabenow when visiting Washington, D.C. in the spring of 2006. After discussing the importance of the exemption bill to our members, Senator Stabenow spearheaded its successful passage.

“The Gramm-Leach-Bliley requirement was redundant for CPAs, as well as a regulatory burden,” said Barry Melancon, President and CEO of the AICPA. “We thank Representatives Mark Kennedy (R-MN) and Colin Peterson (D-MN) for taking the lead in the House to correct this inequity. It was their efforts to exempt CPAs that caused the provision initially to be included in the Financial Services Regulatory Relief Act of 2006. We also appreciate the support of Senators Mike Enzi (R-WY) and Debbie Stabenow (D-MI), who championed the exemption in the Senate,” he added.

The Financial Services Regulatory Relief Act of 2006 also was intended to provide regulatory relief for insured depository institutions.

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