State official object to weak privacy provisions
More than 20 state attorneys general last week were to send a letter to the House and Senate banking committees objecting to what they describe as weak privacy provisions regarding consumers' financial and medical records in the Financial ServicesModernization Act (H.R. 10).
The Financial Services Modernization Act is intended to promote competition in the financial services industry by establishing a framework for disclosing the affiliation of banks, securities firms and other financial services providers.
But the legislation, according to the letter, "permits widespread use and disclosure of sensitive information without the individual's knowledge or consent, while providing only limited remedies for violations and no effective limitations on re-disclosure."
The Center for Democracy and Technology (CDT), in a position statement backing the letter, encouraged the committees to keep state laws in the forefront on consumer privacy issues, urging that "any legislation affecting consumer privacy not pre-empt existing state laws or limit the ability of state legislatures to respond to the needs of their citizens in the future."
"We do think the privacy issues in H.R. 10 are critical...and would hate to see any action out of Congress that makes it easier for sensitive financial information to move through the marketplace without consumers' full knowledge and consent," said Minnesota assistant attorney general Eric Swanson. "We've experienced first-hand that people believe that their bank information is private...and that their banks can share it with third parties."
Swanson is referring to a case settled earlier this summer in the state when Minnesota's attorney general, Mike Hatch, settled a lawsuit against U.S. Bancorp for selling private consumer information, including names, addresses, phone numbers, account balances and more, to telemarketing firms.
The state attorneys general who endorsed the communication are from California, Connecticut, Hawaii, Idaho, Indiana, Iowa, Maine, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, New Hampshire, New York, North Dakota, Pennsylvania, Rhode Island, Tennessee, Vermont, West Virginia and Wyoming. The two territories were Puerto Rico and the Northern Mariana Islands.