Privacy Bill Is Resurrected in Sacramento
A bill that would prohibit banks, insurance companies and other financial businesses from providing personal information about their customers to telemarketers and other third parties was launched in the state Senate on Tuesday.
The bill is a scaled-back version of more aggressive privacy plans that had been torpedoed over the last two years by some of the nation’s most influential businesses. But the compromise sailed out of the Judiciary Committee on a party-line 5-2 vote and went to the Appropriations Committee, the last stop before a floor vote. Democrats voted yes; Republicans voted no.
The bill’s author, Sen. Jackie Speier (D-Hillsborough), predicted her measure (SB 1) will receive Senate approval, but conceded it will face stiff opposition in the Assembly, where heavy lobbying by business interests scuttled the other bills last year and in 2001.
Speier said she believes her bill will be assigned for hearings in two Assembly committees, instead of the customary one. She said she expects it to get an icy reception in the Assembly, where business interests wield more influence over Democrats than they do in the Senate.
Supported by a variety of consumer protection advocates, senior citizen organizations, labor unions and the American Civil Liberties Union, the bill would institute what supporters call the strongest financial privacy protections in the nation.
It would be against the law for a financial institution to provide private information about a consumer to an unaffiliated business, such as a marketing company, cruise line, car dealer or other third party, without the customer’s consent.
The legislation also would prohibit sharing private information between affiliates of a company when a customer specifically ordered that the information be kept confidential.
Speier said such personal information can include the customer’s salary, mortgage balance, bank account transactions, department store purchases, home telephone numbers and other information that could provide a “profile” for marketing purposes, if it is sold or otherwise shared with other businesses.
She noted that in this age of instant information, citizens are highly concerned about losing control of their personal data, adding that public opinion polls show that bills such as hers are supported by 90% or more of Americans, regardless of political party.
“The public is watching,” Speier warned the committee.
In what she called a series of concessions, Speier said she had weakened the bill substantially from earlier versions, including abandonment of a provision that would have allowed citizens to sue businesses for violating their privacy.
However, opponents, including lobbyists representing securities brokers, insurance companies, banks, the California Chamber of Commerce and Silicon Valley software manufacturers, attacked the bill as an overly broad attempt to place stricter controls on marketing practices.
Bill Gausewitz, representing the American Insurance Assn., said the bill was too rigid and sweeping. He warned it would create “structures to inhibit the flow of information” and “stifle development of new products.”
Another opponent, Gene Livingston of the American Electronics Assn., which represents computer and software manufacturers, said his employers were concerned that the bill’s limitations may apply to them because consumers used software to access their bank and stock market accounts. But he said members of the electronics industry should not be included because they do not qualify as financial institutions.
Speier said she would consider such an amendment, but was not willing to accept changes that would tilt her attempts to get a “level playing field for everyone.”
