Rules for Sharing of Data on Bank Customers Proposed

Federal regulators on Thursday proposed rules spelling out how personal data on bank customers would be protected as barriers between banks, investment firms and insurance companies come down.

The rules, proposed by the Federal Reserve and Treasury Department, would make it tougher for financial companies to share even seemingly innocuous information, such as customers’ names, addresses and telephone numbers, with outside marketing firms.

The regulators take the view that such basic information is nonpublic information when it is taken from sources such as customers lists. As nonpublic information, the names and addresses--as well as more personal financial data such as account balances--cannot be shared with outside telemarketers if customers expressly ask their banks, brokerages or insurance companies not to do so.

Under the new law, banks, brokerages and insurers that join together under the same corporate roof are entitled to share customers’ personal financial data with one another. In that case, customers do not have the right to block such sharing.

“This is not good enough for consumers, who won’t get real privacy protection,” said Ed Mierzwinski of U.S. Public Interest Research Group.