Magazine article American Banker

D.C. Speaks: Lindsey: Bush Would Review Privacy Regs

Magazine article American Banker

D.C. Speaks: Lindsey: Bush Would Review Privacy Regs

Article excerpt

If elected President, Gov. George W. Bush will order a comprehensive review of the regulations -- including merchant banking opportunities and privacy protections -- written to implement the Gramm-Leach-Bliley financial modernization law, according to his closest economic adviser. "A major priority of a Bush Treasury Department will likely be a complete review of the post-Gramm-Leach-Bliley regulations with a goal of completing and improving them where possible," said Lawrence B. Lindsey, a resident scholar at the American Enterprise Institute.

In response to questions from American Banker, Mr. Lindsey singled out banks' entry into merchant banking as one of the new powers a Bush administration would critique.

"Certain rules, such as the Federal Reserve Board-Treasury Department merchant banking proposal, have been highly controversial and will need to be evaluated," said Mr. Lindsey, a former Fed governor and adviser to the Reagan and Bush administrations.

Mr. Lindsey, 46, has emerged from his private scholarly and consulting life to dispense economic advice -- usually on a daily basis via e-mail -- to Gov. Bush. His name regularly circulates as a logical Bush choice for Treasury Secretary or National Economic Council director.

Gov. Bush and his economic team do not have any plans to shake up major banking policy -- but they are not closing any doors either.

In the hot-button debate over privacy, a Bush administration would consider tougher "opt-in" rules requiring companies to get explicit customer permission before sharing certain information. But not before it examined how well current rules protect private data, Mr. Lindsey stressed.

The current law gives customers only a chance to protect their data from being shared with companies that are not affiliated with their bank.

"I believe a Bush administration would support targeted restrictions, including an 'opt-in' approach on sharing health or medical information," Mr. Lindsey said. "Likewise, I could envision the new administration supporting targeted restrictions on the government's use of information related to individuals."

He emphasized that a Bush administration "would likely give these requirements time to work before considering new federal legislation."

If Gov. Bush were to push for additional privacy laws, they would not be industry-specific, said Mr. Lindsey, a Harvard PhD economist. "Instead of targeting the financial industry," a Bush administration "may want to target certain categories of information for special treatment related to privacy, rather than broadly restricting an industry group," he said. …

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