Magazine article American Banker

Democrats Pushing Tough Privacy Bill in the House

Magazine article American Banker

Democrats Pushing Tough Privacy Bill in the House

Article excerpt

WASHINGTON -

House Democrats this week are renewing efforts to enact consumer privacy protections that the financial services industry opposes.

Rep. Jay Inslee on Tuesday introduced the Banking Privacy Act of 1999, which would let consumers block banks from sharing personal information with affiliates or selling it to third parties.

Under the Washington Democrat's plan, banks would have to explain to customers how their data would be used and give them the right to "opt out" within 30 days.

Rep. Edward J. Markey, D-Mass., plans to propose a tougher requirement Thursday when House Commerce's finance subcommittee votes on financial reform legislation.

Customers of banks, insurance companies, and securities firms would have to give permission-or "opt in"-before information could be disclosed to outside entities. Financial companies could share personal data among affiliates as long as customers may opt out, a Markey spokesman said.

Other committee members are expected to offer softer alternatives that could range from broader disclosure requirements to opt-out measures.

But industry officials said any of these proposals could raise consumer prices or even end popular services, such as granting frequent-flier miles to credit card users. It could also slow loan approvals, they warned.

"The problem with the privacy bills that are being introduced is they can have clearly unintended consequences," said Edward L. Yingling, chief lobbyist for the American Bankers Association. …

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