New Life for Privacy Shield

There you are, just about to ease back in your La-Z-Boy and enjoy your Saturday reading. The phone rings. It’s a mortgage officer who purchased your financial records and home phone number from a bank, deemed you a good credit risk and decided to try to sell you his new refinancing plan. Grrr.

A consumer privacy bill awaiting action in the state Assembly would make it much tougher for companies to intrude on precious weekends.

That legislation, Senate Bill 773, by Sen. Jackie Speier (D-Hillsborough), had been considered dead for the year largely because Gov. Gray Davis had not committed to supporting it.

Fortunately, however, the bill gained momentum July 5 when Chris Larsen, chief executive of the online lender E-Loan and a competitor of traditional banks, donated $1 million to help get a financial privacy protection initiative on the California ballot next year.

Larsen--who believes that consumer confidence in privacy protection is essential to the vitality of online financial services--vows to put the measure on the ballot as early as next year unless Sacramento legislators, who have dawdled over passing privacy protections in the last three years, open their eyes.

Federal law allows banks and other financial companies to sell personal information without getting an individual’s permission. It does give customers the right to “opt out”: to e-mail, phone or fax a company and ask it not to share your personal information with or sell it to third parties.

What SB 773 would do is mandate an “opt in” system that requires companies to obtain your permission before they share or sell it. To address corporate concerns, the bill was recently amended to allow banks to share some information with businesses in their corporate family.

Last year, SB 773 died on the Assembly floor because legislators waffled in their support for it. This year, SB 773, having recently passed the full Senate, is again awaiting a vote on the full Assembly floor.

To make that happen, Assembly Speaker Herb Wesson (D-Culver City) would need to schedule the bill for reconsideration, legislators would have to get behind it and Davis, who has been backing a squishy, industry-friendly “alternative” measure, would need to commit to signing it.

By supporting Speier’s moderate but strong privacy protections now, state leaders can sensibly balance corporate concerns with something they have ignored far too long: the simmering frustration of Californians who see their privacy steadily chipped away.

To Take Action: Assembly Speaker Herb Wesson, phone, (916) 319-2047; fax, (916) 319-2147; e-mail, speaker@assembly.ca.gov. Gov. Gray Davis, phone, (916) 445-2841; fax, (916) 445-4633; e-mail, governor@ governor.ca.gov.