[Congressional Record Volume 146, Number 54 (Thursday, May 4, 2000)]
[Extensions of Remarks]
[Page E653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             INTRODUCTION OF CONSUMER FINANCIAL PRIVACY ACT

                                 ______
                                 

                         HON. EDWARD J. MARKEY

                            of massachusetts

                    in the house of representatives

                         Thursday, May 4, 2000

  Mr. MARKEY. Mr. Speaker, I am pleased to join today with the 
gentleman from New York (Mr. LaFalce), the gentleman from Michigan (Mr. 
Dingell), the gentleman from Missouri (Mr. Gephardt) and others to 
introduce the Clinton-Gore financial privacy proposal.
  The American public wants stronger privacy protections. The public 
wants, at minimum, the right to block a financial institution from 
transferring information it has gathered about them to both affiliates 
and third parties--an across-the-board ``opt out.'' And they want a 
stronger level of protection for medical information and information 
about personal spending habits--an ``opt-in.'' The legislation we are 
introducing today would provide these protections.
  As Chairman of the bipartisan, bicameral Congressional Privacy 
Caucus, I can also say that there are many Republican members in both 
the House and Senate who are willing to work with Democrats to enact 
the type of strong financial privacy protections that are contained in 
the President's bill. I look forward to working with them towards that 
end.
  But the real question is: will the House and Senate Republican 
leadership continue to stand with the big banks, brokerage houses, and 
insurance companies in opposing meaningful privacy protections, or will 
they allow a debate out on the floor of the House and the Senate on the 
President's proposal to give the people some measure of control over 
who gets access to the most sensitive details of their personal lives? 
I hope that we can have early hearings and action on this bill, so that 
we can close down the gaps left in last year's banking bill--as the 
President pledged last year.
  Here's what our bill would do:
  First, with respect to affiliate sharing under last year's banking 
bill, consumers have no right to block a financial institution from 
transferring nonpublic personal information about them to an affiliate. 
The bill we are introducing today would change that by giving consumers 
an ``opt out'' right for both affiliates and nonaffiliated third 
parties.
  Second, under last year's banking bill, consumers were given the 
right to ``opt out'' of having a financial institution transfer their 
personal information to nonaffiliated third parties. However, there was 
a giant loophole in this provision that allowed financial institutions 
to transfer such information with no consumer ``opt out'' if they were 
transferring it to another financial institution with whom they had a 
joint marketing agreement. This provision was put in at the behest of 
small banks who argued that since the large banks were allowed to do 
affiliate sharing with no opt out, that they should be able to contract 
with insurance companies or securities firms to cross-market to the
  Third, under last year's bill, there were no protections for health 
care information or for especially sensitive detailed information about 
a consumer's spending habits. Under the President's proposal, a 
financial institution would have to obtain the consumers' prior consent 
(``opt-in'') before it could obtain, receive, evaluate or consider 
medical information from an affiliate or third party. An opt-in would 
also have to be obtained before a financial institution could transfer 
information about a consumer's personal spending habits (i.e., every 
check you've ever written and to whom, every charge on your credit or 
debit card and for what) or any individualized description of a 
consumer's interests, preferences, or other characteristics.
  Fourth, last year's banking bill failed to give consumers any right 
whatsoever to obtain access to or to correct the nonpublic personal 
information that a financial institution had collected about them and 
was disclosing to its affiliates or to nonaffiliated parties. The 
President's proposal would assure that consumers would have the right 
to obtain such access and that a financial institution would have to 
correct any material inaccuracies. Institutions would be permitted to 
charge a reasonable fee for providing a copy of such information to the 
consumer.
  Fifth, last year's banking bill failed to give the State Attorneys 
General any power to enforce compliance with the Act, in contrast to 
many other consumer protection statutes (i.e., the Telephone Consumer 
Protection Act) that provide for such concurrent enforcement. The 
President's proposal would make financial institutions that are subject 
to the jurisdiction of the Federal Trade Commission (i.e., anyone who 
is not a bank, an insurance company, or a securities firm; someone like 
a check cashing service), also subject to enforcement by the state 
attorneys general. In addition, last year's banking bill failed to 
specify whether a violation of a financial institution's privacy 
policies would be considered to be a violation of the Act. The 
President's proposal would make an action a violation of the Act, and 
would clarify that a violation of any requirement of the Act would be 
considered to be an unfair or deceptive trade practice.
  Sixth, last year's bill required financial institutions to give a 
consumer a copy of their privacy policy at the time of the 
establishment of a customer relationship with the consumer. The 
President's proposal would require that financial institutions provide 
a copy of their privacy policies to any consumer upon request and as 
part of an application for a financial product or service from the 
institution. This will help consumers compare the privacy policies 
offered by various institutions.
  While this bill does not go quite as far as the legislation I 
introduced last year, H.R. 3320 in adopting an across-the-board opt-in 
requirement, it is otherwise largely patterned after that proposal, 
including the provisions to close the affiliate sharing and joint 
marketing loopholes, provide access and correction rights, and 
strengthen enforcement. Moreover, I believe that the Administration's 
proposal to adopt and across-the-board opt-out, but then establish a 
higher level of protection for medical information and information 
about personal spending habits is an equitable compromise that gets to 
the most sensitive information. This is a good proposal. It deserves to 
become law, and I urge all of my colleagues to give it their support.

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