[Congressional Record Volume 145, Number 156 (Monday, November 8, 1999)]
[Extensions of Remarks]
[Page E2296]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          CONFERENCE REPORT ON S. 900, GRAMM-LEACH-BLILEY ACT

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                               speech of

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Thursday, November 4, 1999

  Mr. STARK. Madam Speaker, the glaring absence of any financial 
privacy provisions for affiliated entities in the financial 
modernization bill before us today is a sorry mistake. It is wrong and 
inappropriate for Congress to, on the one hand, enact legislation that 
explicitly allows mergers between banks, insurers and securities 
firms--but which on the other hand denies consumers any say in how 
their personal financial information can be used and disclosed.
  I thought we learned this lesson 21 years ago, when Congress enacted 
the Right to Financial Privacy Act. That 1978 law, which I authored, 
put in place standards governing access and sharing of financial 
information for federal agencies. It stemmed from a Supreme Court 
decision that ruled the fourth amendment does not apply to banking 
records. As a former California banker, I had been a party in that 1974 
suit, California Bankers Association v. Schultz.
  And here we are today, throwing open the door for financial 
institutions to create huge new holding companies--without giving 
consumers any ability to say how their sensitive personal financial 
information can be shared. In effect, we are creating a financial 
privacy vacuum.
  This runs counter to what we are trying to achieve in the area of 
medical confidentiality, where we are aiming to put the strongest 
possible safeguards in place at the Federal level, while preserving 
what is best about State privacy laws. In the next week or so, HHS will 
issue proposed regulations for medical privacy, which on balance are 
expected to be strong. If we can give consumers rights over their 
medical data, why can't we also give them a measure of control over how 
their financial data is used, marketed, and sold?
  Defenders of the conference agreement say that the bill limits 
sharing of personal financial data with non-affiliated, third-party 
entities. Nonsense. All that companies that don't formally affiliate 
have to do to escape the bill's consumers opt-out provision is enter 
into a joint agreement. Then, presto, they are free to manipulate 
personal financial data in any way they like.
  Nobody likes getting annoying calls from pesky telemarketers at 
dinnertime. Well, once this bill passes, the telemarketing business 
will go through the roof. Mergers between banks, securities firms and 
insurers will produce data amalgamation like we've never seen before. 
Before long, your health insurer will be able to get information on how 
money you make and what investment strategies you favor--making 
underwriting that much easier. Your bank will be able to easily look up 
how many checks you've written to your psychiatrist--and use that 
information to help decide whether you're an acceptable loan risk.
  This is the dawning of a new Orwellian Age of Information.
  I urge my colleagues to oppose this ill-conceived legislation.

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