The California Assembly Banking and Finance Committee this week effectively killed a bill that would have prevented banks from sharing information about their customers without their customers’ affirmative consent. The bill, AB 1707, would have required bank customers to “opt in,” or specifically approve the sharing of their information. It was defeated by a 3-3 vote, failing to garner the support of eight of the 14 committee members required in order for it to move to the Assembly floor.
It was not immediately clear what impact the defeat would have on two financial privacy bills scheduled for an vote in the California Senate today. Those bills — one of which mandates an opt-in system for bank customer privacy while the other was modified to allow banks to use opt-out methods — would have been rationalized with AB 1707. There is still an opportunity for other opt-in legislation to be introduced before the state legislative session ends in August or for AB 1707 to be reintroduced in the next two weeks, although that would require significant legislative maneuvering, according to a spokeswoman for the Banking Committee.
Banks and the direct marketers who partner with them to offer products to their customers oppose the opt-in measures. Some said they viewed the California bills as bellwether legislation that could have influenced similar proposals in other states.
