    [Public Papers of the Presidents of the United States: William J. Clinton (1999, Book I)]
    [May 4, 1999]
    [Pages 682-685]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks Announcing the Financial Privacy and Consumer Protection
    Initiative
    May 4, 1999

        Thank you very much, Mari. I just wish we
    could have found someone with a little energy to make this presentation.
    [Laughter]
        Hillary and I are really delighted to have all of you here and
    delighted to be a part of this announcement today, because it's so
    important. And I would like to say a special word of appreciation to
    Secretary Rubin. You know, most people think
    of the Treasury Secretary as someone who's out there trying to keep the
    economy going, and he's done a reasonable job of that, I think.
    [Laughter] And they think of Bob Rubin as this sort of big Wall Street-
    type brilliant person.
        But one of the reasons that I wanted him
    to come and work here is that he actually understands how big economic
    decisions affect individual people at all levels of income and all
    different circumstances in life. And I think it's a good thing for a
    country to have a Treasury Secretary that understands the big issues and
    then cares about how they impact individual citizens. And I'm very
    grateful for that.

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        I want to thank Senator Bryan and
    Congressmen Bentsen, Gonzalez, Inslee, Kanjorski, Markey, Lee, Roybal-Allard, and
    Waters for being here; and Senator
    Sarbanes, who can't be here; and
    Congressman LaFalce, who's done so much on
    this, who is here today. And I thank Chairman Levitt, Chairman Pitofsky,
    Commissioner Thompson, Assistant
    Attorney General Jim Robinson.

    Tornado Damage in Oklahoma and Kansas

        Before I get into the substance of our proposals today, I would like
    to say just a few words about the terrible tornado devastation in
    Oklahoma and Kansas, which I'm sure all of you have seen the reports of
    and perhaps even the gripping pictures of.
        Some of the most powerful tornadoes ever recorded swept through
    these States last night. At least 45 people are dead, and the wreckage
    is still being examined. Whole communities have been leveled. Homes and
    possessions have been turned into splinters and rubble.
        I have already spoken with the Governor of Oklahoma, Frank
    Keating, to tell him that I've declared
    Oklahoma a Federal disaster area. And we have just completed a similar
    declaration for the State of Kansas, and I look forward to talking to
    Governor Graves later today. I had a good talk
    with James Lee Witt, our FEMA Director, who
    is now in Oklahoma with Buddy Young, his Regional Director. And they are working on what
    we can do to provide all the necessary support for people.
        We have to make sure everyone's accounted for and that the beginning
    cleanup can start. Local and State officials, fire and police, emergency
    services, National Guard personnel have already worked through the night
    and are doing a terrific job of dealing with an incredibly difficult
    situation. We're here talking about how people feel when something has
    been stolen from them. A lot of our fellow Americans have had everything
    taken from them in those two States, and I know that they will be in
    your prayers.
        The people of Oklahoma City, in particular, have suffered too much
    devastation in recent years, and they've been hit very, very hard by
    this. So we'll have more to say about that in the days ahead.

    Financial Privacy and Consumer Protection

        I would like to just put this issue briefly into historical
    perspective, to emphasize the importance that I feel the entire
    Congress, without regard to party, should attach to this matter.
        We've been at this experiment in Government for 223 years now. We
    started with a constitution that was rooted in certain basic values and
    written by some incredibly brilliant people who understood that times
    would change and that definitions of fundamental things like liberty and
    privacy would change and that circumstances would require people to rise
    to the challenges of each new era by applying the old values in
    practical ways.
        This happened at the dawn of the 20th century. Mari mentioned
    Justice Brandeis. He said when we change from being an agricultural to
    an industrial society, that laws built under simpler conditions of
    living could not handle the complex relations of the modern industrial
    world. He and the leaders of the Progressive movement, about 100 years
    ago, therefore, fought to adapt our institutions to new markets, to
    update vital protections for our citizens, to uphold the right to
    privacy, which Brandeis said was the right most valued by civilized men.
        Now, that's what's happening today; we're in the midst of another
    vast economic transformation. Once again, the laws that govern dynamic
    markets--markets so dynamic they could not have been imagined 200 years
    ago--are out of date.
        I just read--just parenthetically--I read yesterday a quote that
    said that 60 years ago the prices in London for most basic commodities
    were the same that they were in 1660, before the outbreak of the great
    London fire. In the last 60 years, most of us have seen prices go up a
    thousandfold. Thank goodness it hasn't happened in the last 6 years;
    we're--[laughter]--maybe in a different thing.
        But the pace of change is very different--not just the nature of
    change but the very pace of it. So once again, we have to respond,
    applying our oldest values in practical ways that allow them to be
    preserved and enhanced in modern times.
        We all know that technology and competition have revolutionized the
    financial services industry. I think most of us believe that, by and
    large, these changes have been very good. But many people, as you've
    heard, don't have the

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    knowledge to properly evaluate what is truly a dizzying array of
    options. Some are falling victim to new abusive practices. Others are
    being left out of the financial marketplace altogether.
        That is why today I am proud to announce our new Financial Privacy
    and Consumer Protection Initiative, to give all Americans both the tools
    and the confidence they need to fully participate in a thriving but
    highly complex 21st century economy.
        This initiative is based on five key principles, and it draws on
    several important proposals developed by the Members of Congress who are
    here today, and some who are not, whom Hillary mentioned.
        The first, clearly, is that we have to do more to protect every
    American's financial privacy. The Vice President led our efforts to identify areas where privacy is at
    risk, and financial areas came up over and over and over again as a
    matter of great concern.
        The technological revolution now makes it easier than ever for
    people to mine your private financial data for their profit. While some
    of your private financial information is protected under existing
    Federal law, your bank or broker or insurance company could still share
    with affiliated firms information on what you buy with checks and credit
    cards or sell this information to the highest bidder. This law, to put
    it mildly, is outdated and should be changed to give you the right to
    control your financial information, to let you decide whether you want
    to share private information with anyone else. I look forward to working
    with Members in the House and the Senate on this issue.
        To enhance financial privacy, we must also protect the sanctity of
    medical records. With the growing number of mergers between insurance
    companies and banks, lenders potentially can gain access to the private
    medical information contained in insurance forms. So we propose to
    severely restrict the sharing of medical information within financial
    services conglomerates. You should not have to worry that the results of
    your latest physical exam will be used to deny you a home mortgage or a
    credit card.
        There are many other important protections for medical records that
    ought to be put in place. Because Congress has given me the authority to
    act if it does not do so by August, one way or another, we will protect
    the privacy of medical records this year.
        Second, we must require greater public disclosure and enhance every
    consumer's right to know. As the First Lady just pointed out--although
    every time I hear it, I shake my head--consumers received nearly 4
    billion credit card solicitations last year.
        Some offers contain new traps for the unwary. For example, sometimes
    credit card companies advertise low interest rates known as teaser
    rates, to reel in consumers who then are surprised with unexpected
    interest rate hikes. We believe any marketing of teaser rates for credit
    cards should include equally prominent notice of their expiration date,
    their eventual annual percentage rate, and any penalties that apply.
        Millions of consumers have also found out the hard way that making
    only minimum payments rarely helps retire a debt and almost always
    results in very large interest payments. So we will require clear notice
    of how long and how costly repayment would be if the consumer makes only
    the minimum payment.
        Third, we have to do more to combat consumer fraud. As Mari Frank
    discovered the hard way, it is remarkably easy now for a thief to take
    out huge loans in someone else's name, run up enormous credit card
    debts, and tap into bank accounts. Last October Congress passed--and I
    was pleased to sign--the Identity Theft and Assumption Deterrence Act.
    It's a good law, but we need to give it sharp teeth. So today I'm
    instructing the Treasury and Justice Departments to give higher priority
    to cases involving identity theft, particularly those involving
    organized crime groups, with the goal of increasing the number of
    prosecutions, both at the State and Federal levels. And Treasury will
    convene a national summit on identity theft and work with the private
    sector to make it harder to steal someone else's identity in the first
    place.
        We'll also crack down on fraud committed over the Internet. If we
    want to seize the Internet's full potential, we have to stay ahead of
    those who would use this open medium to manipulate stock prices, commit
    fraud in on-line auctions, or perpetuate any other type of financial
    scam. That's why I've asked the Justice Department to step up
    prosecutions, to develop a national center for tracking Internet fraud,
    and to train State, local, and Federal law enforcement officers on how
    to recognize and root out these schemes.
        I find that law enforcement, compared to people who are doing
    criminal activity in this area,

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    are rather like parents trying to keep up with their children on the
    computer. [Laughter] It is an endless effort, and we need to organize
    and systematize a continuous training and retraining effort so that we
    can stay ahead of the curve.
        Chairman Levitt is launching an expanded
    effort to arm investors with the information they need to protect
    themselves against on-line securities fraud. Listen to this: Complaints
    of Internet fraud have tripled in the past 6 months--just in the last 6
    months. Therefore, I will work with Congress and Chairman Levitt to
    provide the additional resources for the SEC necessary for enforcement,
    beyond what I have already requested in our balanced budget.
        Fourth, we must provide financial services for those who have been
    denied access to credit and basic banking services for too long. Today
    I'm proud to announce that the Treasury Department will soon make
    available, through private banks, low-fee bank accounts for those who
    receive Federal benefits like Social Security.
        Unfortunately, there are some in Congress who would have us
    effectively limit rather than expand access to financial services in
    underserved communities. As the Senate debates this issue this week, I
    want to reiterate what I said in my veto letter to Congress. We will
    oppose any effort to weaken or undermine the continued relevance of the
    Community Reinvestment Act.
        While that act has been on the law for well over 20 years now, over
    90 percent of the lending under it has occurred in the last 6 years, in
    our administration. I'm very proud of that. It has not done anything to
    hurt bank profits, and we ought to stay with it. I know that leaders of
    the civil rights community spoke today on this subject, and I just want
    to applaud them and to encourage them to stay at it.
        Finally, as has already been said, we have to increase the financial
    literacy of the American people. It's not enough to know how to balance
    a checkbook anymore. Even those fortunate enough to have the help of
    accountants sometimes have a hard time understanding all the ins and
    outs of investing in an IRA, paying off credit card debt, or refinancing
    a mortgage.
        So today I'm directing my National Economic Council--Gene
    Sperling is here today with us--to work with
    our agencies to develop a plan to help all Americans improve their
    financial literacy. I think Hillary said it adds a year of income to
    people if they have this kind of training in high school.
        School is, of course, the best place to start learning about
    personal finance. The Department of Education will help all our schools
    find effective lesson plans and other tools to integrate financial
    literacy into their basic curriculum.
        So that's what we're trying to do: protect privacy, enhance
    disclosure, combat fraud, increase access, expand education. These
    principles are the same ones we used to harness the power and benefits
    of the Industrial Revolution. They are just as vital today, if not more
    so, than they were a century ago. It's time now to use them to seize the
    enormous potential of the information revolution for every American
    citizen.
        If we work together, we can help all our families have the benefits
    of new choices and new technologies. We can help our people thrive in
    the 21st century, and all we have to do is to remember how we got here
    over the last 200-plus years.
        Thank you very much.

    Note: The President spoke at 2:54 p.m. in Presidential Hall (formerly
    Room 450) in the Old Executive Office Building. In his remarks he
    referred to attorney Mari J. Frank, privacy rights advocate; Gov. Bill
    Graves of Kansas; and Federal Emergency Management Agency Region VI
    Director Raymond Lloyd (Buddy) Young.