SACRAMENTO, Calif. – With financial privacy legislation killed for yet another year by the California Legislature, the battleground now moves to the voters, who will likely be given the opportunity to decide on what is being described as the strongest privacy measure in the nation. That vote is expected to take place on the March ballot. Nearly 375,000 signatures of registered California voters have to be collected by Aug. 22 to get the issue on the ballot. Those signatures have already been gathered but the petition drive is continuing to ensure a safety margin when the signatures are verified by county elections officials. The verification process has to be completed by late October. "We've tried talking sense to the politicians. Now we're going straight to the people," said Chris Larsen, chairman and chief executive officer of E-Loan, who is spearheading the ballot initiative. "If the politicians won't step in to protect the personal and financial privacy of the people of California, the people of this state are going to take action for themselves." Public opinion polls have indicated that 90% of California voters support financial privacy legislation. John Van Etten, a legislative lobbyist with the California Credit Union League, said the measure's broad support statewide will make it "very difficult to defeat." Even so, the battle over the initiative is expected to be hard fought and costly and ultimately could wind up in a protracted legal wrangle in the courts. Banks, insurers and securities firms vehemently opposed state legislation to enact financial privacy legislation, spending more than $20 million to defeat the proposals. They argued that provisions in the bill would be costly and unwieldy to implement. Democratic state Sen. Jackie Speier, who has led the campaign for privacy legislation in the Legislature, said no matter how many times she amended her bill it was never enough to pass muster with her critics. "No matter what I've done, it never seems to be enough to satisfy the unquenchable thirst financial institutions have for selling, sharing and trading private consumer information," Speier lamented. "Nothing will satisfy the special interests working overtime to kill this bill." While the California Credit Union League has yet to take a position on the statewide initiative, Van Etten predicted the battle over the measure would be fierce, pitting privacy supporters against the financial services industry. Supporters of the ballot initiative include the AARP (American Association of Retired Persons), Consumers Union, the American Civil Liberties Union, the Consumer Federation of California, the Privacy Rights Clearinghouse, California Public Interest Research Group (CALPIRG), and E-Loan. The ballot initiative – known as the California Financial Privacy Act of 2004 – would give California consumers the right to decide for themselves whether financial institutions can sell or share their personal information. It would require that the institutions obtain a consumer's explicit consent before selling or sharing a customer's personal or financial information with affiliates or third-party companies for any purpose other than to complete a transaction initiated by the consumer. Under the initiative the state attorney general would have six months to spell out how financial institutions obtain a customer's consent. "Banks, insurance companies and other financial institutions invade our privacy when they sell or share our personal information without our permission," the initiative says. "California consumers deserve real control over the sharing of personal information about us and our families by financial institutions. The more easily our personal information is shared by financial institutions, the more likely it is that our information will be misused or stolen, increasing the possibility of identity theft and other types of fraud. "Current laws are too weak and do not give California consumers enough control over the selling or sharing of our personal information by financial institutions," it added. "The purpose of the California Financial Privacy Act of 2004 is to give consumers control over the sharing of their personal information by financial institutions." The measure also prevents financial institutions from denying products or services from consumers who do not allow the sharing or selling of their personal information. The initiative does not spell out any specific penalties for companies that fail to comply with its provisions. It notes that enforcement will rely on existing laws, enabling local or state officials to seek a court order stopping the sharing or information and to seek restitution. Individuals can also file suit to halt the sharing of information. The initiative also allows for the doubling of civil penalties in the event the information shared results in identity theft. "The initiative will help reduce identity theft by giving consumers more control over who gets their information and how their information is used," said Michael McCauley, media director for Consumers Union. "By giving consumers the ability to limit the extent to which their personal financial information is disbursed among financial institutions, the initiative will help ensure that this private information won't fall into the wrong hands and be used for illicit purposes." The initiative can be amended by a majority vote of the California Assembly and Senate and if signed by the governor. "All amendments to this act must be to further the act and must be consistent with its purpose which is to maximize the privacy of California consumers by ensuring their Confidential Consumer Information is not disclosed unless the consumer has expressly, affirmatively consented to such disclosure . . ." it said. Well-known Republican political strategists Dan Schnur and Rob Stutzman were recently recruited to run the initiative campaign. "This isn't about left versus right or conservatives versus liberals," Schnur said. "This is about the people of California taking on the special interests who would sell our privacy to the highest bidder. "Californians want security for themselves and their families," he added. "They want economic security, they want security from violent crime and terrorism, and they want security from the mercenaries who would violate their personal and financial privacy." -


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