Consumer Financial Privacy Initiative Gets Green Light

CALIFORNIANS for PRIVACY NOW

Campaign Seeks March 2004 Vote on "Consumer Information Privacy" Initiative

SACRAMENTO, CA - Californians for Privacy Now, led by AARP, Consumers Union, Consumer Federation of California and E-LOAN, today received clearance from the Attorney General to circulate an initiative to strengthen financial privacy laws for consumers. Attorney General Bill Lockyer titled the measure the "Consumer Information Privacy" initiative and concluded that it would require financial institutions to get consumers' "informed consent" before sharing or selling personal financial information.

"Weak financial privacy laws leave consumers vulnerable to identity theft, aggressive marketing practices and fraud," said Lupe de la Cruz, Manager of Advocacy for AARP. "Californians have made it clear that they want to decide for themselves whether banks and other financial institutions can sell or share their personal financial information. This initiative gives consumers control and puts the burden on financial institutions to get permission first."

Now that the initiative's official title and summary have been prepared, the campaign can begin circulating petitions and gathering signatures to place its reform measure on the ballot. To qualify the measure for the March 2004 ballot, the campaign must collect at least 373,816 signatures of registered California voters within the next 150 days. To supplement a grass roots volunteer petition drive, Kimball Petition Management has been hired by the campaign to conduct additional signature gathering activities.

"Most Californians agree that current financial industry practices represent a blatant violation of privacy," said Shelley Curran, Policy Analyst for Consumers Union's West Coast Regional Office. "We are confident that this measure will easily qualify for the ballot and look forward to taking this issue directly to the voters."

If passed, the initiative will give Californians the strongest financial privacy protection in the nation by requiring financial institutions to obtain a consumer's explicit consent before selling or sharing their personal information with affiliates or third party companies for any purpose other than to complete a transaction initiated by the consumer. Current federal law offers consumers very little protection when it comes to controlling whether their personal information is shared or sold by financial institutions with which they do business.

Despite overwhelming public support, privacy reform bills have been defeated repeatedly in the legislature because of intense opposition from the financial industry. SB 1, the financial privacy bill introduced by Senator Jackie Speier, has been approved by the Senate but faces an uncertain future in the Assembly, where similar proposals have been blocked over the past three years. A critical vote on the bill is scheduled for May 12 when the measure will be considered by the Assembly Banking and Finance Committee.

"Consumers are fed up with the stalemate over privacy in Sacramento," said Chris Larsen, Chairman and CEO of E-LOAN. "We are taking the steps necessary to ensure that Californians get the privacy protections they want and deserve, in case the legislature again fails to deliver."

The Attorney General's Title and Summary of the financial privacy initiative is attached. Additional information about the Californians for Privacy Now initiative is available online at: www.californiaprivacy.org.

The proposed ballot measure is supported by a coalition of organizations, including AARP, CalPIRG (California Public Interest Research Group), Consumer Federation of California, Consumers Union, E-LOAN, Privacy Rights Clearinghouse, and American Civil Liberties Union.