Financial Reform Bill Moving Faster Than Expected

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H.R. 10, the Financial Modernization Bill that includes some privacy regulations about how banks use customer data, is moving through a joint conference committee much faster than anticipated, according to sources close to the issue.

A reconciled version of the bill, combining provisions from bills that passed both the U.S. House and Senate earlier this year, could be drafted as early as this week, according to Shelton Jones, a spokeswoman for The Dittus Group Inc., Washington, which hosted a phone conference to discuss the privacy implications of the bill yesterday.

The House version of the bill contained legislation requiring banks to notify customers about their privacy policies, provide adequate opt-out provisions for sharing information with outside marketers, and other privacy-related stipulations. The Senate version, which passed in May, a month before the House version, contained no privacy provisions.

At the conference call, Marcia Sullivan, a spokeswoman for the Consumer Bankers Association, Arlington, VA, said she has heard anecdotal reports that the number of consumers who have been calling their banks to opt out of having their information shared with marketers has been increasing. She said she had not yet seen any data to support those reports, however.

The participants in the conference agreed that an opt-in measure, which was suggested in a letter from several state attorneys general, would probably not be part of the reconciled bill.

"Trying to make it opt-in now is really like trying to get the toothpaste back in the tube," said Thomas Vartanian, Head of the Financial Institutions Transactions and Electronic Commerce Technology Groups of Fried, Frank, Harris, Shriver & Jacobson, Washington.

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