Senate, House Pass Financial Reform Bill as ExpectedThe House and Senate yesterday passed a massive, long-awaited financial reform bill, now called the Gramm-Leach-Bliley Act, which allows banks, insurance companies and securities firms to get into each other's businesses. The bill includes several privacy provisions considered favorable to direct marketers. Banks must notify customers about how they use their customers' information and provide a means for them to opt out of having that information shared, but it allows banks to share customer information freely with affiliated companies, such as insurance companies under the same corporate umbrella. It also allows banks to share encrypted account numbers with third parties for processing transactions, under certain conditions.
The Senate passed the bill by a vote of 90-8 and the House passed it by 362-57. President Clinton is expected to sign it into law.
Last week an exemption was inserted into the bill that allows the transfer of customer information between retailers and the companies that process their credit cards.
"It's a technical amendment," said David Runkel, a spokesman for the House Committee on Banking and Financial Services. "It's not a loophole or anything."
According to a report in today's Wall Street Journal, the provision was lobbied for by the National Retail Federation, Washington, and other groups. An NRF spokesman was not immediately available.