Banks Told to Learn Financial Privacy Act for Self-Protection
Henry, Shannon, American Banker
WASHINGTON -- Gary L. Jewel says computers are to the federal Right to Financial Privacy Act what drugs are to the Bank Secrecy Act.
Mr. Jewel, who is a partner in the Memphis law firm Jewel & Rich and an instructor at the American Bankers Association's National Graduate Compliance School, said the emphasis on drug enforcement in the 1980s made the secrecy act a top bank compliance issue. Now that banks are rapidly increasing their reliance on computers and becoming interchanges on the the information highway, the privacy act will be the new issue, he predicted.
"Bankers will have to sit on their data bases and guard them," said Mr. Jewel. With computerized data bases, electronic mail, and account updates sent to customers by disk, more information can be accessed by more people. Mr. Jewel said the knowledge bankers have is valuable to computer hackers, among others.
Unlikely to Be Altered
The privacy act is now 15 years old and has been amended several times, mostly to ease government access to customer records. "RFPA is not an act that guards privacy at all," he said. "It allows the government to access people's records."
The act is unlikely to be altered significantly in the near future, Mr. Jewel said, despite technical developments that threaten to make it obsolete. Mr. Jewel said banks could face the prospect of law enforcement officials obtaining a subpoena to tap a bank's data bases and monitor its activities or the transactions of specific customers, Mr. Jewel said.
Suggests Sticking to the Facts
With that possibility in mind, he suggested bankers protect themselves by becoming as familiar as possible with the act. He said officers should careful when providing information for any investigation. He said bankers should stick to the facts.
A surprising number of bankers become overzealous and think they are helping apprehend a criminal by volunteering such information as "he grew a beard lately" and "some of my tellers saw him in the bad part of town." Giving such information could violate state law in some cases, said Mr. Jewel. "Some bankers have a …
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Publication information: Article title: Banks Told to Learn Financial Privacy Act for Self-Protection. Contributors: Henry, Shannon - Author. Magazine title: American Banker. Volume: 159. Issue: 9 Publication date: January 13, 1994. Page number: 9. © 2009 SourceMedia, Inc. COPYRIGHT 1994 Gale Group.