Treasury: U.S. Privacy Law Not a Priority
Heller, Michele, American Banker
National preemption of state financial privacy laws -- which the financial services industry badly wants -- may not be in the policymaking cards this year.
Last week Treasury officials and lawmakers began putting their political capital behind renewing a data-sharing provision in the Fair Credit Reporting Act that expires Dec. 31. However, in doing so they signaled that they will not push for a broader, more controversial federal privacy preemption.
"We're not thinking of creating any brand-new uniform standards," Wayne A. Abernathy, the Treasury assistant secretary for financial institutions, told American Banker. "Our feeling is that the uniform standards that are there now have worked very well. There are a lot of things the states can do under current law that they should be able to continue to do.
"What we have in mind is just renewing those provisions that are set to expire this year and making them permanent," Mr. Abernathy said when asked to clarify references to "uniform national standards" in a speech to the Exchequer Club on Wednesday.
Sen. Tim Johnson, the top Democrat on the Senate Banking Committee's financial institutions subcommittee, took a similar stance in introducing legislation last week. His proposed law would make permanent the Fair Credit provision that prevents states from passing laws on a handful of data-sharing issues involving credit reports and other lending practices.
Sen. Johnson pointedly did not include a broad financial privacy provision in his bill.
"Given the short time frame for reauthorizing FCRA preemption, I feel strongly that we must keep our eye on the ball," the South Dakota Democrat said Friday. "I understand that broader issues may be included in the debate. However, we must not let any additional controversy jeopardize the ability of millions of working American families to access credit at reasonable rates."
(Mr. Abernathy said Friday that the Treasury had not yet taken a position on the Johnson bill.)
Even Rep. Spencer Bachus, the Alabama Republican who heads the Financial Services Committee's financial institutions subcommittee and supports renewing the Fair Credit provision, stopped short in a recent interview of endorsing a broad federal preemption on financial privacy.
Sources close to the administration and Congress said that such positions, especially on the part of the Treasury, are more tactical than philosophical. …