Weakened California Financial Privacy Bill Gets Closer to PassingA California state privacy bill that would mandate opt-in consent for the sharing of financial data appears closer to passage in a revised form this week after financial industry trade groups said they would not oppose the new version of the legislation.
The bill was co-authored by state Sens. Jackie Speier and John Burton and introduced in December 2002.
According to a report in yesterday's San Francisco Chronicle, key changes to the bill were the delay of implementation until July 1; elimination of a one-check option for maximum privacy protection; and relief from making financial institutions provide mandatory postage-paid envelopes as long as two other free options for opting in and out exist such as toll-free telephone lines and e-mail addresses.
Both the California Bankers Association and the Personal Insurance Federation of California came out with statements in support of the bill over the possible alternative.
A statement Aug. 14 from the bankers association said in part, "While California's banks remain committed to serving the needs of their customers, earlier drafts of proposed financial privacy legislation would have impeded our ability to deliver the kind of customer service our customers have come to expect and demand. The California Bankers Association (CBA) is on the record about its desire to see workable and reasonable privacy legislation enacted. We believe that, with the latest changes, this proposal qualifies as both reasonable and workable in many, but not all, respects."
The statement went on to say that the group preferred a national standard.
The current national law is the Gramm-Leach-Bliley Financial Modernization Act of 1999, which took effect July 1, 2001. Under GLB, financial institutions must provide clear disclosure of their privacy policies regarding the sharing of nonpublic personal information with affiliates and third parties, and give notice to consumers and a chance to opt out of sharing nonpublic personal information with nonaffiliated third parties. The privacy notices must be sent annually.
If both houses of the California legislature do not pass the bill by Wednesday morning, it is likely that a stricter version would appear on the March ballot in the state. After the bill was defeated for the second time in the state Assembly in June, a group called Californians for Privacy Now collected more than 600,000 signatures to get the issue in front of voters.