SACRAMENTO, Calif. – Consumer financial privacy legislation, one of the most hotly contested and lobbied issues in past sessions of the California Legislature, has been introduced again for the 2003-2004 session. State Sen. Jackie Speier, who sponsored last year's failed attempt to give consumers more control over how their financial information was used, and Senate President Pro Tempore John Burton, both Democrats, announced their joint authorship of Senate Bill 1 (SB 1), the California Financial Information Privacy Act. "With a new Legislature and a new year we have a new opportunity to bring meaningful financial privacy to Californians," Speier said. "With Sen. Burton's help, I am confident that this year's effort will reach the finish line. Californians deserve it, and we must deliver it. 2003 must be the year to truly protect consumers' private financial data." Burton, considered a political powerhouse in the state, has vowed to "do everything" he can to ensure that the measure is passed. "We have an excellent chance of passing the bill this year," he said. Gov. Gray Davis has not taken a position on the bill, which was introduced Monday (Dec. 3), the first day of the new legislative session. Davis opposed the measure last year. Speier and Burton said they were optimistic that financial privacy legislation, defeated in the last three legislative sessions, would be passed. They noted that nearly three dozen new Assembly members elected in November might be more amendable to approving restrictions on how companies can use consumer financial information. Speier said the measure was a "streamlined" version of previous bills which have failed to pass the Assembly. Her bill last year, SB 773, was killed in the final days of the legislative session after intense lobbying by banks, insurance companies and securities firms. Opponents spent more than $20 million in their efforts to kill the bill, Speier noted. The California Credit Union League, along with several consumer groups, had supported the measure. Bob Arnould, vice president of state governmental affairs for the league, said the measure was similar to the one the league supported in the waning days of last year's session. "The impact on credit unions appears to be the same as last year's bill," Arnould said. "All of the components of the legislation that were negotiated by credit union leaders with Speier's office are intact in this version of the bill." He said the only "significant change" in the legislation was that it was broadened to include retailers in addition to financial institutions. Also included in the new bill is USAA, which sells insurance to military personnel. The company had been excluded in the previous version. Speier said her new bill addressed concerns previously expressed by legislators and by Davis. The new bill would require financial companies to get written permission from customers before they were allowed to sell personal data to third parties. It would allow consumers to block the sharing of their personal information among affiliates of a company. A spokesman for the California Bankers Association (CBA) said it would probably oppose the measure. She said financial privacy legislation should be enacted at the federal level and that SB 1 would do more to hurt consumers than help them by limiting services while offering only limited privacy protections. Speier's bill noted that it offered greater privacy protection than provided in the federal Gramm-Leach-Bliley Act. If financial privacy legislation is defeated again this session, the issue could be placed before California voters in a referendum on the 2004 state ballot. "If the bill fails this time, we feel we have an obligation to bring the issue directly to the voters of California," said Shelley Curran of Consumers Union. Speier insisted that it was time for the Legislature to pass the bill. "We need now to get off the dime and do what the people of the state want, and that is to have some final say in whether their financial information is shared," she said. -

Continue Reading for Free

Register and gain access to:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts.
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders.
  • Educational webcasts, white papers, and ebooks from industry thought leaders.
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.