[Congressional Record Volume 147, Number 134 (Tuesday, October 9, 2001)]
[Extensions of Remarks]
[Pages E1830-E1831]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


  H.R.--A BILL TO ENSURE A UNIFORM STANDARD FOR THE SECURITY, USE AND 
              PROTECTION OF CONSUMER FINANCIAL INFORMATION

                                 ______
                                 

                           HON. ROBERT W. NEY

                                of ohio

                    in the house of representatives

                        Tuesday, October 9, 2001

  Mr. NEY. Mr. Speaker, today I rise to introduce a bill to ensure a 
single uniform standard for the security, use and protection of 
consumer financial information. This bill will temporarily establish 
the standard set forth in the Gramm-Leach-Bliley Act as the uniform 
standard for financial privacy. This provides the Congress and the 
Administration the necessary time to evaluate the potentially negative 
impacts of multiple, uncoordinated state regulatory schemes on 
consumers, intelligence gathering, law enforcement, and our economy.
  The Gramm-Leach-Bliley Act's provisions on the use of consumer 
financial information, which went into effect on July 1 of this year, 
establish a national standard on the use and security of such financial 
information. Private financial institutions have undertaken great 
efforts to retool and restructure their information management systems 
to comply with this important national standard. Across the nation, 
however, some state legislatures are poised to consider state 
legislation that would establish different standards for the use and 
security of consumer financial information. While the consideration is 
permitted under Gramm-Leach-Bliley, I am urging my colleagues to join 
me in imposing a temporary moratorium on state laws that would 
undermine the uniform national standard under Gramm-Leach-Bliley.
  As my colleagues know, I am a very strong advocate for the protection 
of private personal information. I have aggressively pursued the 
enactment of federal legislation, such as Title V of Gramm-Leach-
Bliley, to protect consumer financial information. As we all know, the 
Internet, information technology systems, and the development of 
electronic commerce, have reshaped our society and have presented 
special risks for the protection of privacy of personal financial 
information.
  At the time Gramm-Leach-Bliley was orginally enacted, it was thought 
that the states could, over time, provide enhancements to the federal 
protections set forth in the Act. However, at this time, as the 
Congress and the Administration are investigating how to streamline 
intelligence gathering procedures that do not undermine the underlying 
protections in the law for the privacy of law-abiding citizens, the 
prospect of the creation of a fragmented ``patchwork quilt'' of 
potentially fifty different state laws represents a great threat to the 
security of customer financial information and to our need to establish 
a coordinated intelligence gathering and law enforcement effort.
  The Attorney General has testified that: ``We need speed in 
identifying and tracking down terrorists. Time is of the essence. The 
ability of law enforcement to trace communications into different 
jurisdictions without obtaining an additional court order can be the 
difference between life and death for American citizens.'' This is 
particularly true of financial information. A recent GAO Report that 
analyzed current risks to the Nation's infrastructure arising from 
cyber terrorism states that ``Information sharing and coordination 
among private-sector and government organizations are essential to 
thoroughly understanding cyber threats and quickly identifying and 
mitigating attacks.''
  Varying laws from state to state would require financial institutions 
to fragment their financial records into several databases, requiring 
literally thousands of information technology specialists to create 
very complex computer and network systems to comply with each different 
standard of each different state. This process, by itself, would expose 
private financial information to increased risks of security breaches. 
Reduced privacy protection due to more human access through IT 
professionals, and more complex fragmented data management systems, 
risk leaving more ``backdoors'' that may be exploited by those who 
would seek to abuse the systems and hide illegal transactions.
  This ``patchworking'' process threatens to be at odds with efforts of 
law enforcement. Placing the burden of complying with varying state-
imposed regimes at this time would severely hinder the ability of 
financial institutions to respond to law enforcement subpoenas to 
search and retrieve financial information. The resulting delay could 
spell failure of time-sensitive investigations involving the tracking 
of assets passing through criminal and terrorist networks and could 
require the duplication of law enforcement efforts across 50 
jurisdictions with differing standards and statutes. Finally, a lack of 
uniformity would impair market efficiencies that rely on the free flow 
of information and would harm consumers.
  Specifically, this bill would impose a three-year moratorium on 
additional state laws that would affect the security, use and 
protection of consumer financial information, giving time for Congress, 
the Executive Branch, and the Judicial Branch to develop and implement 
appropriate measures to streamline and improve intelligence gathering 
procedures. During this time, the previously agreed to national 
standard set forth in the Gramm-Leach-Bliley Act, which already has 
been implemented throughout our economy, would govern the protection of 
consumer financial information.
  The bill would also establish a Commission to study the issues raised 
by laws relating to use and security of consumer information and their 
impact on the economy, consumers and

[[Page E1831]]

intelligence gathering procedures. Congress and the states will then be 
able to adequately study the benefits of a uniform financial 
information protection law and balance the needs of national security 
and the benefits of the free flow of information against the 
appropriate level of protection for consumers.
  I ask my colleagues to support this bill to ensure a national 
standard to preserve the uniform treatment and protection of consumer 
financial information during this critical time.

                          ____________________