[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4321 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 4321

To protect consumers and financial institutions by preventing personal 
 financial information from being obtained from financial institutions 
                         under false pretenses.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 23, 1998

Mr. Leach (for himself, Mr. Lazio of New York, Mr. Castle, Mr. LaFalce, 
 Mr. Hinchey, and Mr. Vento) introduced the following bill; which was 
      referred to the Committee on Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
To protect consumers and financial institutions by preventing personal 
 financial information from being obtained from financial institutions 
                         under false pretenses.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Information Privacy Act of 
1998''.

SEC. 2. FINANCIAL INFORMATION PRIVACY.

    (a) In General.--The Consumer Credit Protection Act (15 U.S.C. 1601 
et seq.) is amended by adding at the end the following:

          ``TITLE X--FINANCIAL INFORMATION PRIVACY PROTECTION

``Sec. 1001. Short title
    ``This title may be cited as the `Financial Information Privacy 
Act'.
``Sec. 1002. Definitions
    ``For purposes of this title, the following definitions shall 
apply:
            ``(1) Customer.--The term `customer' means, with respect to 
        a financial institution, any person (or authorized 
        representative of a person) to whom the financial institution 
        provides a service, including that of acting as a fiduciary.
            ``(2) Customer information of a financial institution.--The 
        term `customer information of a financial institution' means 
        any information maintained by a financial institution which is 
        derived from the relationship between the financial institution 
        and a customer of the financial institution and is identifiable 
        to the customer.
            ``(3) Document.--The term `document' means any information 
        in any form.
            ``(4) Financial institution.--
                    ``(A) In general.--The term `financial institution' 
                means any institution engaged in the business of 
                providing financial services to customers who maintain 
                a credit, deposit, trust, or other financial account or 
                relationship with the institution.
                    ``(B) Certain financial institutions specifically 
                included.--The term `financial institution' includes 
                any depository institution (as defined in section 
                19(b)(1)(A) of the Federal Reserve Act), any broker or 
                dealer in investment securities, any insurance company, 
                any loan or finance company, any investment adviser or 
                investment company, any credit card issuer or operator 
                of a credit card system, and any consumer reporting 
                agency that compiles and maintains files on consumers 
                on a nationwide basis (as defined in section 603(p)).
                    ``(C) Further definition by regulation.--The 
                Federal Trade Commission may prescribe regulations 
                clarifying or describing the types of institutions 
                which shall be treated as financial institutions for 
                purposes of this title.
``Sec. 1003. Privacy protection for customer information of financial 
              institutions
    ``(a) Prohibition on Obtaining Customer Information by False 
Pretenses.--It shall be a violation of this title for any person to 
obtain or attempt to obtain, or cause to be disclosed or attempt to 
cause to be disclosed to any person, customer information of a 
financial institution--
            ``(1) by knowingly making a false, fictitious, or 
        fraudulent statement or representation to an officer, employee, 
        or agent of a financial institution;
            ``(2) by knowingly making a false, fictitious, or 
        fraudulent statement or representation to a customer of a 
        financial institution; or
            ``(3) by knowingly providing any document to an officer, 
        employee, or agent of a financial institution, knowing that the 
        document is forged, counterfeit, lost, or stolen, was 
        fraudulently obtained, or contains a false, fictitious, or 
        fraudulent statement or representation.
    ``(b) Prohibition on Receiving Customer Information Obtained From 
Financial Institution Under False Pretenses.--It shall be a violation 
of this title for any person to receive customer information of a 
financial institution, knowing or having reason to know that the 
information was obtained from the institution in any manner described 
in subsection (a).
    (c) Nonapplicability to Law Enforcement Agencies.--No provision of 
this section shall be construed so as to prevent any action by a law 
enforcement agency, or any officer, employee, or agent of such agency, 
to obtain customer information of a financial institution in connection 
with the performance of the official duties of the agency.
``Sec. 1004. Administrative enforcement
    ``(a) Enforcement by Federal Trade Commission.--Except as provided 
in subsection (b), compliance with this title shall be enforced under 
the Federal Trade Commission Act by the Federal Trade Commission in the 
same manner and with the same power and authority as the Commission has 
under the title VIII, the Fair Debt Collection Practices Act, to 
enforce compliance with such title.
    ``(b) Enforcement by Other Agencies in Certain Cases.--
            ``(1) In general.--Compliance with this title shall be 
        enforced under--
                    ``(A) section 8 of the Federal Deposit Insurance 
                Act, in the case of--
                            ``(i) national banks, and Federal branches 
                        and Federal agencies of foreign banks, by the 
                        Office of the Comptroller of the Currency;
                            ``(ii) member banks of the Federal Reserve 
                        System (other than national banks), branches 
                        and agencies of foreign banks (other than 
                        Federal branches, Federal agencies, and insured 
                        State branches of foreign banks), commercial 
                        lending companies owned or controlled by 
                        foreign banks, and organizations operating 
                        under section 25 or 25A of the Federal Reserve 
                        Act, by the Board;
                            ``(iii) banks insured by the Federal 
                        Deposit Insurance Corporation (other than 
                        members of the Federal Reserve System) and 
                        insured State branches of foreign banks, by the 
                        Board of Directors of the Federal Deposit 
                        Insurance Corporation;
                            ``(iv) savings associations the deposits of 
                        which are insured by the Federal Deposit 
                        Insurance Corporation;
                    ``(B) the Federal Credit Union Act, by the 
                Administrator of the National Credit Union 
                Administration with respect to any Federal credit 
                union; and
                    ``(C) the Farm Credit Act of 1971, by the Farm 
                Credit Administration with respect to any Federal land 
                bank, Federal land bank association, Federal 
                intermediate credit bank, or production credit 
                association.
            ``(2) Violations of this title treated as violations of 
        other laws.--For the purpose of the exercise by any agency 
        referred to in paragraph (1) of its powers under any Act 
        referred to in that paragraph, a violation of this title shall 
        be deemed to be a violation of a requirement imposed under that 
        Act. In addition to its powers under any provision of law 
        specifically referred to in paragraph (1), each of the agencies 
        referred to in that paragraph may exercise, for the purpose of 
        enforcing compliance with this title, any other authority 
        conferred on such agency by law.
    ``(c) State Action for Violations.--
            ``(1) Authority of states.--In addition to such other 
        remedies as are provided under State law, if the chief law 
        enforcement officer of a State, or an official or agency 
        designated by a State, has reason to believe that any person 
        has violated or is violating this title, the State--
                    ``(A) may bring an action to enjoin such violation 
                in any appropriate United States district court or in 
                any other court of competent jurisdiction;
                    ``(B) may bring an action on behalf of the 
                residents of the State to recover damages of not more 
                than $1,000 for each willful or negligent violation; 
                and
                    ``(C) in the case of any successful action under 
                subparagraph (A) or (B), shall be awarded the costs of 
                the action and reasonable attorney fees as determined 
                by the court.
            ``(2) Rights of federal regulators.--
                    ``(A) Prior notice.--The State shall serve prior 
                written notice of any action under paragraph (1) upon 
                the Federal Trade Commission and provide the Federal 
                Trade Commission with a copy of its complaint, except 
                in any case in which such prior notice is not feasible, 
                in which case the State shall serve such notice 
                immediately upon instituting such action.
                    ``(B) Right to intervene.--The Federal Trade 
                Commission or an agency described in subsection (b) 
                shall have the right--
                            ``(i) to intervene in an action under 
                        paragraph (1);
                            ``(ii) upon so intervening, to be heard on 
                        all matters arising therein;
                            ``(iii) to remove the action to the 
                        appropriate United States district court; and
                            ``(iv) to file petitions for appeal.
            ``(3) Investigatory powers.--For purposes of bringing any 
        action under this subsection, no provision of this subsection 
        shall be construed as preventing the chief law enforcement 
        officer, or an official or agency designated by a State, from 
        exercising the powers conferred on the chief law enforcement 
        officer or such official by the laws of such State to conduct 
        investigations or to administer oaths or affirmations or to 
        compel the attendance of witnesses or the production of 
        documentary and other evidence.
            ``(4) Limitation on state action while federal action 
        pending.--If the Federal Trade Commission or any agency 
        described in subsection (b) has instituted a civil action for a 
        violation of this title, no State may, during the pendency of 
        such action, bring an action under this section against any 
        defendant named in the complaint of the Federal Trade 
        Commission or such agency for any violation of this title that 
        is alleged in that complaint.
``Sec. 1005. Criminal penalty
    ``(a) In General.--Whoever violates, or attempts to violate, 
section 1003 shall be fined in accordance with title 18, United States 
Code, or imprisoned for not more than 5 years, or both.
    ``(b) Enhanced Penalty for Aggravated Cases.--Whoever violates, or 
attempts to violate, section 1003 while violating another law of the 
United States or as part of a pattern of any illegal activity involving 
more than $100,000 in a 12-month period shall be fined twice the amount 
provided in subsection (b)(3) or (c)(3) (as the case may be) of section 
3571 of title 18, United States Code, imprisoned for not more than 10 
years, or both.
``Sec. 1006. Relation to State laws
    ``(a) In General.--This title shall not be construed as 
superseding, altering, or affecting the statutes, regulations, orders, 
or interpretations in effect in any State, except to the extent that 
such statutes, regulations, orders, or interpretations are inconsistent 
with the provisions of this title, and then only to the extent of the 
inconsistency.
    ``(b) Greater Protection Under State Law.--For purposes of this 
section, a State statute, regulation, order, or interpretation is not 
inconsistent with the provisions of this title if the protection such 
statute, regulation, order, or interpretation affords any person is 
greater than the protection provided under this title.
    ``(c) Determination of Inconsistency.--
            ``(1) In general.--The Federal Trade Commission shall, upon 
        its own motion or upon the request of any State or other 
        interested party, submitted in accordance with procedures 
        prescribed in regulations of the Commission, determine whether 
        a State requirement is inconsistent or affords greater 
        protection.
            ``(2) Effect of determination.--If the Federal Trade 
        Commission determines that a State requirement is inconsistent, 
        a person shall incur no liability under the law of the State 
        for a good faith failure to comply with that law, 
        notwithstanding that such determination is subsequently 
        amended, rescinded, or determined by judicial or other 
        authority to be invalid for any reason.''.
    (b) Report to the Congress.--Before the end of the 18-month period 
beginning on the date of the enactment of this Act, the Comptroller 
General shall submit to the Congress a report on the following:
            (1) The efficacy and adequacy of the remedies provided in 
        the amendments made by subsection (a) in addressing attempts to 
        obtain financial information by fraudulent means or by false 
        pretenses.
            (2) Any recommendations for additional legislative or 
        regulatory action to address threats to the privacy of 
        financial information.
                                 <all>