CALIFORNIA ASSEMBLY BANKING COMMITTEE FAILS TO PROTECT
CONSUMERS' FINANCIAL PRIVACY

SB 1 Defeated in the Face of Intense Financial Industry Opposition

SACRAMENTO, CA - For the third year in a row, efforts to strengthen California's financial privacy laws have been defeated in the state Assembly in the face of intense opposition by industry lobbyists. SB1 (Speier), which already has been passed by the Senate and was recently endorsed by Governor Gray Davis, failed to clear a critical hurdle when it was defeated by the Assembly Banking Committee today.

"Once again, lawmakers in the Assembly have put the interests of the powerful financial industry ahead of everyday Californians by standing in the way of privacy reform efforts," said Shelley Curran, Policy Analyst for Consumers Union's West Coast Regional Office. "We have bent over backwards trying to accommodate the concerns that lawmakers have voiced about this bill, but we refuse to compromise away the protections that Californians want and deserve."

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. SB1 would have given consumers the right to stop the sharing of information by financial institutions with affiliates unless they met very strict criteria. The bill would have required financial institutions to get a consumer's affirmative consent before sharing information with certain third parties. And SB1 would have established standards that financial institutions would have been required to follow to inform consumers of their privacy rights.

"The chances for achieving genuine financial privacy reform in Sacramento are becoming more and more slim," said Curran. "But we are committed to moving forward with our campaign so that consumers can decide for themselves who has access to their private financial information."

Consumers Union is an active member of Californians for Privacy Now, the coalition that is working to place a financial privacy measure on the March 2004 ballot. So far, the campaign has collected 200,000 of the 373,000 signatures of registered voters needed by August 22 to qualify the measure for the ballot. The ballot measure would enact even stronger protections than those afforded under SB1 by requiring financial institutions to get consumers' permission first before selling or sharing their personal information with affiliates or third parties.

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View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

  
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