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Press Release Wednesday, May 10, 2000 |
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WASHINGTON, D.C. -- A broad coalition of consumer and public
interest groups is criticizing bank and securities regulators for
planning to postpone the date for the financial industry to comply
with privacy laws approved last year.
"At a time when consumers are demanding more privacy protection,
not less, it would be shocking if you endorsed this plan to delay
giving consumer enforceable privacy rights," the groups wrote in a
May 9 letter to the Treasury Department, the Federal Trade
Commission, the Federal Reserve, and other financial regulators.
The letter was signed by sixteen groups, including Consumers
Union, Eagle Forum, American Civil Liberties Union, Free Congress
Foundation, and the U.S. Public Interest Research Group.
Under the financial services modernization law passed six months
ago, federal agencies this week must publish new regulations
requiring financial firms to craft privacy policies and clearly
inform consumers about those policies. The regulations will also
require the firms to let consumers decline to have their personal
financial information shared with unaffiliated third parties.
Financial firms were originally required to comply with these
privacy rules by November 12. But industry officials succeeded in
pressuring regulators to delay the compliance date until July 1,
2001.
The coalition believes that the law's privacy rules do not provide
enough protection, preferring tougher standards that would prevent
companies from sharing confidential customer information with
affiliates or outside parties without the customer's express consent.
But the coalition strongly supports the implementation of the privacy
rules that do exist by the November 12 deadline.
The coalition wrote that it is "unacceptable" for regulators to
delay these rules, especially after President Clinton touted a new
proposal for more strict privacy laws just ten days ago.
The coalition wrote that financial firms have had "ample notice
and time to prepare for these new regulations." It also pointed out
that the financial industry had succeeded in convincing state
legislatures to wait until the federal government implemented its
privacy rules before acting on laws of their own. "Meanwhile," the
letter said, the industry's "cohorts in Washington, DC, were
apparently trying to convince" regulators that it could not offer
consumers the federal law's modest protections by November.
The groups plan to ask for the decision to be reviewed by the
congressional committees that oversee the regulators, as well as the
lawmakers who serve on a congressional caucus devoted to privacy
issues.
Consumers Union, publisher of Consumer Reports magazine, is an independent, nonprofit testing and information-gathering organization, serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
