SACRAMENTO, Calif. – Consumer privacy legislation, one of the most heavily lobbied bills this year in California Legislature, has been killed for this session. By a vote of 32-26 with 22 Assembly members not voting, SB 773 was killed in the waning hours of the legislative session late on Sept. 14. The measure, authored by state Sen. Jackie Speier (D-Hillsborough), needed 41 votes for passage. The proposal was described as one of the toughest consumer privacy measures in the nation. The bill technically could be revived in the Assembly when it reconvenes in January or during a special session called in October by Gov. Gray Davis to discuss how to rescue Southern California Edison from bankruptcy. The key issue on which much of the legislation revolved was “opt-out” and “opt-in” provisions for sharing consumer information among third-party affiliates. CCUL, along with others in the financial and business community, opposed the measure, arguing that it would hamper their ability to market their products and could make those services more expensive. Credit unions and community banks argued that the Speier measure placed them at an unfair disadvantage since most utilize non-affiliates to provide member services. “A considerable number of those who chose not to vote were concerned about its impact on credit unions and small community banks,” Bob Arnould, vice president of state governmental affairs for the California Credit Union League, noted. “They were very active in moving the bill aside, clearing the way for debate on a more rational bill next year.” Consumer groups, as well as California Attorney Gen. Bill Lockyer, endorsed the Speier plan, which had been making its way through the Legislature since the beginning of the year. Speier’s bill underwent hundreds of amendments to the point that Arnould described it as “a mishmash of conflicting sessions.” That feeling was echoed by Assemblyman Dennis Cardoza (D-Merced), who said that while he supported privacy legislation, “this bill is not well-crafted.” In the closing days of the Legislature, in fact, Davis proposed his own version of privacy legislation which was supported by the league’s Government Relations Committee. Davis did not endorse the Speier legislation. Speier blamed Davis for the defeat of her measure, saying Democrats in the Assembly took a “blood oath” not to support the bill unless it included amendments proposed by Davis. A Davis spokesman said the governor did not lobby to have the bill killed. The measure called for companies to obtain specific permission from consumers before sharing information with non-affiliated firms but allowed the companies to share confidential information with their own affiliates if consumers were notified and they did not formally object. Assemblywoman Hannah-Beth Jackson (D-Santa Barbara), who earlier had proposed her own privacy legislation, argued that the Speier bill was a measure demanded by the public, whose information was being shared without its knowledge and permission. -

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