Senate Banking Committee narrowly foils privacy effort

WASHINGTON-By a vote of 10-10, the Senate Banking Committee on July 13 defeated a move to add new consumer privacy protections to a securities fees bill but promised to reconsider the issue when the legislation moved to the floor of the Senate. Alabama Senator Richard Shelby (R) led the attempt to prohibit financial institutions from buying or selling customers' social security numbers. The measure would also have expanded the protections on SSNs, which is seen as critical to defending against identity theft and other fraud scams. Strong opposition from Republican leaders, including Chairman Phil Gramm (R-Texas) foiled the attempt to beef up the privacy provisions contained in the Gramm-Leach-Bliley Act. Two aspects of privacy now await Senate action: medical privacy and social security number privacy, and privacy hawks promise to not let the issue die. If Republicans stonewall on meeting the issue head on, Democrats (and the few Republicans who champion privacy, such as Shelby) pledge to bring it front and center in the upcoming battle for the White House. "I think we need a medical privacy provision and I think we need to protect social security numbers, and if we can draw those in a limited way and have a chance to do that on the floor, I intend to vote for it," Gramm stated, adding the proviso, "but I want to be absolutely sure we're not getting unintended consequences." Finding time to work out "unintended consequences" in time for the upcoming recess appears doubtful, however, as Shelby noted that his Republican colleagues were trying to "have it both ways." They are trying for the perception that they care about privacy, he said, but are really beholden to banking lobbyists that want to weaken them. "The American people want their privacy protected," said Shelby sternly. "If you don't believe it, wait till you run again, Democrat or Republican." Senator Richard Bryan (D-Nevada) is a colleague of Shelby's and a member of the Privacy Caucus, a bipartisan group of senators that favor more comprehensive privacy protections that those contained in GLBA. "I think our failure to take action is inexcusable," he said, vowing to block further action on the securities fees bill (which passed by voice vote) unless he could offer privacy amendments when it reached the Senate floor. -caburger@cutimes.com