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Home My WebLink AboutMINUTES - 09102002 - SD4 To: BOARD OF SUPERVISORS ' Contra FROM: Mark DeSauhiier " Costa DATE: Sept. 10, 2002 _ County SUBJECT: Protecting Consumers' Financial Information SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION $F 't7MMFJDATIONS l) Direct County Counsel to review the attached Model Order Regulating the Disclosure of Confidential Consumer information by Financial Institutions with instructions that it is the Board's intent to adopt the ordinance as a Model. 2)' Direct the County Administrator to present the Model Ordinance at the,Public Managers Association as a"Model Ordinance"that all cities and counties should strongly consider adopting. 3) Request the subject be placed on the agenda of the next Mayors' Conference and ask that Supervisor Mark:DeSaulnier present the"Model Ordinance"at the conference to request that all 19 cities in Contra Costa County follow the County's lead and pass the Model Ordinance. Information collected by banks and other financial institutions in the age of the information super highway is so comprehensive and so unique that it has become the financial equivalent to a person's DNA. This "Financial DNA"is shared.and sold by financial institutions without any consent by the individual it profiles and often without the individual's'knowledge. Adoption of this ordinance is critical because federal and state governments have failed to take appropriate action. In 1999, the federal Financial Services Modernization Act, commonly known as the Gramm-Leach-Bliley Act,was signed into law. This Act allow financial institutions to share consumer information unless the consumer expresses to the institution(s)that they do not want their information sold to other companies. Although the Act requires banks, mortgage companies and others to send notices to consumers informing them of their right to protection,the language used is either so complicated or packaged with advertisements in the mass mailings,of monthly statements so that it can be easily overlooked by the consumer. California State Senator Jackie Speier introduced SB 773 to provide protection for consumers that is not provided by the Gramm-Leach-Bliley Act.. But, lobbying efforts of the banking, insurance and credit union industries'have effectively killed the bill on the Assembly floor. It is important to send a clear message to members of the Legislature and to the Governor that Californians demand protection for their financial information. CONTINUET!ON ATTACHMENT.--XXX-VES SIGNATURE: RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD GOMMITTEt APPROVE OTHER ACTION OF BOARD ON Septemb= If), 2()()2 , APPROVED AS RECOMMENDED X OTHER DBMAM the Board's intention to adopt a model ordinance regulating the disclosure of confidential consmr.. information''by financial institutions DIRE= the. County Administrator to present the model ordinance at the Pu'b'lic Manager's Association meeting and place it on the � at the next Mayors' Conference; and DIRRC°M County Counsel to review the model ordinance and return f o the Board cif &4 ervisors within two weeks. vOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X UNANIMOUS(ABSENT: J&p9 } AND CORRECT COPY OF AN ACTION TAKEN AYES; NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN. ATTESTED September 10, 2002 JUAN SWEETEN,CLERK OF THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR Contact:Nand L Valu 646-5763 cc:BOS County Counsel CAO BY >DEPUTY CONSIDER WMI MODEL ORDINANCE BOARD OF SUPERVISORS, COUNTY OF , STATE OF CALIFORNIA AN ORDINANCE REGULATING THE DISCLOSURE OF CONFIDENTIAL CONSUMER WORMATION BY FINANCIAL INSTITUTIONS i The Board of Supervisors of the County of; Stag of California,ORDAINS, as follows: SECTION 1. Chapter#W,',consisting of Sections#M.010 to x.090,of'Title##f #of the County Ordinance Code are hereby added as follows: .010 Purpose and Intent (a) It is the purpose and intent of the Board of Supervisors that the operation of financial institutions as defined in this ordinance should be regulated so as to provide customers of financial institutions notice and meaningful choice about how their.personal information is shared or sold by their financial institutions. (b) It is the intent of the Board of Supervisors in enacting,this ordinance toafford,persons greater financial privacy protection than those provided in public Law 106-102,.the federal' Clrairim-l-eaach-Bliley Act, and that this ordinance be interpreted to be consistent-with that purpose. # #.Ci2fl Definitions (a) "Confidential consumer information"means information(1)that a consumer provides to a financial institution,to obtain a product or service from the financial institution, (2)about a consumer resulting from any transaction involving a product or service between the financial institution and a consumer,or(3)that the financial institution otherwise obtains about a consumer in connection with providing a product or service to that consumer, Any personally identifiable information is financial if it was obtained by a financial institution in connection with providing a financial product or service to a consumer, including the fact that a consumer is a customer of a financial institution or has obtained a financial product or service from a financial institution. Confidential consumer information does not include publicly available information that the financial institution has a reasonable basis to believe " . l Mm de available to tife general public from(1)federal,state,or local government records, (2)widely distributed media, or(3)disclosures to the general public that are required to be made by federal,state,or local law. Confidential consumer information shall include any list,description,or other grouping of consumers, and publicly available information pertaining to them that is derived using any nonpublic personal information other than publicly available information,but shall not include any list,description, or other grouping of consumers,and publicly available'information pertaining to them that is derived without lasing any confidential consumer information. (b) Confidential consumer information includes,but is not limited to,all of the following: (1) Information a consumer provides to a financial institution on an-application to obtain P.i a loan,credit card, or other financial product or service. (2) Account'balance information,payment history,overdraft history and credit or debit card purchase information. (3) The fact that an individual is or has been a customer of a financial institution or has :obtained a financial product or service from a financial institution. (4) Any information about a financial institution's consumer if it is disclosed in a manner that indicates that the individual is or has been the financial institution's consumer. (5) :Any information that a consumer provides to a financial institution or that a financial j institution or its agent otherwise obtains in connection with collecting on a lean or servicing a loan. (6) Any information collected through an Internet cookie or an information collecting device from a Web server. (7) 1 information from a consumer report. (c) "Financial institution"generally means any institution located in unincorporated County that engages in financial'activities as described in Section 1843''''(k) of Title 12 of the United States Code and doing business in unincorporated County. An- institution that is significantly engaged'in financial activities is a financial institution. The term"financial institution"does not include the Federal Agricultural Mortgage Corporation or any entity'chartered and operating under the Farm Credit Act of 1971 (12 T.S.C.Sec. 2001 et-seq.) provided that the entity does not sell or transfer confidential-consumer information to a nonaffiliated third panty. The term"financial institution"does not include institutions chartered by Congress specifically to engage in a proposed or actual securitization,secondary market sale, including sales of servicing rights,or similar transactions related to a transaction of the consumer,as long as diose institutions do not sell or transfer confidential consumer information to a nonaffiliated third party. The term financial institution does not include any person licensed as a dealer under Article 1 (commencing with Section 11700)of Chapter 4 of Division 5 of the Vehicle Code that enters into contracts for the installment sale,or lease of motor vehicles pursuant to the requirements of Chapter 2b(commencing with Section 298 1)or 2d(commencing with Section 2985.7)of Title 14 of part 4 of'Division 3 of the Civil Code and assigns substantially all of those contracts to financial institutions within 30 days. The term ' mancial institution"does not include any provider of professional services,or,any wholly awned'affiliate thereof,that is prohibited by rules of professional'ethics or applicable.law from voluntarily disclosing confidential client information'without the consent of the client. :(d) "Affiliate" means any person or entity that,directly or indirectly,controls,is controlled by, oris under common control with anotherperson or entity. A franchisor; including any affiliate f;shall be deemed an affiliate of the franchisee for purposes of this ordinance. (e) "Nonaffiliated third,party" means any entity that is not an affiliate of,or related by common ownership'or affiliated by corporate control, with the financial institution. P (f) "Consumer"means an individual or business that obtains or has obtained,from a financial institution as defined in subsection (c)above,a financial product or service that is to be used primarily for personal,family,or household purposes,or that individual's legal representative. For purposes of-this ordinance, an individual is not a consumer of a financial I institution solely because he or she is(1)'a participant',or beneficiary of an employee benefit plan that a financial institution misters or sponsors, or for which the financial institution acts as a trustee,,insurer,or fiduciary, (2)covered under a group or blanket insurancepolicy or group,annuity contract issue by the financial institution, or(3)a beneficiary in a workers' compensation plan provided that(A)the financial institution provides all required notices and rights required by this ordinance to the plan sponsor, ,group or.blanket insurance policyholder,or group annuity contractholder and(B)the financial institution dues not disclose to any ablate or any nonaffiliated third party confidential consumer information about the individual.except as authorized'in Section #####.050. A consumer does not include an individual who obtains products'or services for business,commercial,or agricultural purposes. (g) ,Control"means the direct or indirect possession of the power to direct or cause the direction of the management and policies of another entity. Control includes any of the following: (1) ownership or power to vote 25 percent or more of the outstanding shares of any class of voting security of a company, acting through one or more persons,(2)power in any manner over the election of a majority of the directors,or of individuals exercising similar functions,or(3)the power to exercise a directing influence over the management of policies of a company, (h) ; "Necessary to effect,administer,or enforce"means the following: (1) The disclosure is required,or is a usual,appropriate,or acceptable method to carry out the transaction or the product or service'business of which the transaction is a part,and record or service or maintain the consumer's account in the ordinary course of providing the financial service or financial product,or to administer or service benefits or claims relatin&to the transaction br the product or service business of which it is.a part,and includes the following; (A) Providing the consumer or the consumer's agent or broker with a confirmation,►n, statement,orother record of the transaction.,or information on the status or value of the financial service or financial product, (B) The accrual or recognition of incentives or bonuses associated with the transaction that are provided by the financial institution or another parry involved in providing the financial service or product. (2) The disclosure is required or is a lawful method to enforce the rights of the financial institution or of other persons engaged in carrying out the financial transaction or -prow' liroduct or service. (3) The disclosure is required,or is a usual,appropriate,or acceptable method for insurance underwriting at the consumer's request;for reinsurance purposes,or for any of the following purposes as they relate to a consumer's insurance: (A) .Account administration. (B) Reporting,investigating,or preventing fraud or material misrepresentation. (C) Processing premum payments. (D) Processing insurance claims. (E) Administering insurance benefits,including utilization review'activities. For internal research purposes. p.3 (G) As otherwise required or specifically permitted by federal or state law. (4) The disclosure is required, or is a usual,appropriate or acceptable method,in connection with the following: (A) The authorization,settlement,billing processing,clearing,transferring, reconciling,or collection of amounts charged,debited.,or otherwise paid using debit,credit or other payment card,check or account number,or by other payment means. (B) The transfer of receivables, accounts,or interest therein. (C) The audit of debit,credit,or other payment information. (i) `,Financial product or service"means any product or service that a financial holding company could offer by engaging in any activity that is financial in nature or incidental to financial activity under subsection(k)of Section 1843 of Title 12 of the United Stags Code'{the United States Bank.Holding Company Act of 1:956). Financial service includes a financial institution's evaluation or brokerage.of information that the financial institution collects in connection with a request or an application from a consumer for financial product or service. (j) g`Cl=ly and conspicuously"means displayed in a manner that is readily noticeable, readable, and understandable to consumers. Factors to be considered in determining whether a notice or disclosure is clear and conspicuous include prominence,proximity, absence of distracting elements, and clarity and understanding of the text disclosure. (k) "Widely distributed media"means publicly available information from a telephone book, a television or radio program,a newspaper or a Web site that is available to the general public on an unrestricted basis. ####.030 Nan-Disclosure of Confidential Consumer Information n (a) A financial institution shall not disclose to, or share a consumer's confidential consumer information with,any nonaffiliated third party or affiliate unless the financial institution has provided written notice to the consumer to whom the confidential'consumer information relates and unless the financial institution has obtained a consent acknowledgement signed by the consumer that authorizes the financial institution to disclose or share the confidential consumer information. 'A financial institution shall not deny,a consumer a financial product or a financial.'service because the consumer has not provided the signets consent acknowledgment required by this section to authorize the financial institution to disclose or share his or her confidential consumer information with any nonaffiliated third-party or affiliate. (b) Nothing in this ordinance shall prohibit a financial institution from marketing its own products and services or the products and services of others to the financial institution's own costo ,pgvided no confidential consumer information is disclosed except as - - permitted ywS`ecton (c) Except as otherwise provided in this ordinance,an entity that receives confidential' consumer information from a financial institution under this ordinance shall not disclose this information to any other entity,unless the disclosure would be lawful if made directly to the other entity by the financial institution. ####.040 Notice and Consent p.4 (a) Nothing in this ordinance shall require a financial institution to provide a written notice to a consumer pursuant to Section####.030 if the financial institution does not disclose confidential consumer information to any nonaffiliated third party or to any affiliate, except aasprovided in Section#x##.050. (b) A financial institution shall provide written notices and consent acknowledgements required by this ordinance to consumers as separate written documents that are easily identifiable and distinguishable from other documents that otherwise may be provided to a consumer. A notice provided to a member of a household pursuant to Section####:030 i shall be considered notice to all members of that household unless that'household contains another individual`who also has a separate account with the financial institution. (c) Written notices required by this ordinance shall include-at least the following. (1) The specific types of information that would be disclosed or shared, (2) The general circumstances ander which the information would be disclosed or shared, (3) The specific hypes of persons or businesses that would receive the information,and (4) The specific proposed types of uses for the information. ####.050 Exempt Disclosures (a) Section x.030 shall not apply to information that is not personally identifiable to a particular person.. (b) Section####.030 shall not prohibit the release of confidential consumer information under the following circumstances: (1) The confidential consumer information is necessary to effect, administer,or enforce a transaction requested or authorized by the consumer, or in connection with servicing or processing a financial product or service requested or authorized-by the consumer,or in connection with.maintaining or servicing the consumer's account with the financial institution,or with another entity as part of a private label credit card program or other extension of:credit on behalf of such entity,or in connection with a proposed or actual securitization or secondary market sale,including sales of servicing rights,related to a transaction of the consumer. (2) The confidential consumer information is released with the signed consent acknowledgment of or at the written direction of the consumer. "(3) The confidential consumer information is: (A) Released to protect the confidentiality or security of the financial institution's records pertaining to the consumer,the service or product, or the transaction' therein. (B) Released to protect against or preyont actual or,potential fraud, identity theft,' - kMrued transactions,claims or other liability. (C) Released for required institutional risk control,or for resolving customer disputes,or inquiries. (D) Released to persons holding a legal or beneficial interest relating to the consumer. (E) released to persons acting in a fiduciary or representative capacity on behalf of the consumer. P. (4) The confidential consumer information is released to provide information to insurance rate advisory organisations, guaranty funds or agencies,applicable rating agencies of the financial institution,persons assessing the institution's compliance with industry,standards,and the institution's attorneys,accountants,and auditors. (5) The confidential consumer information is released to the extent specifically required' or specifically permitted under other provisions of law and in accordance with the Right to Financial Privacy Act of 1978 (12 U.S.C. Sec. 3401 et seq.), to law enforcement agencies, including a federal functional regulator, the Secretary of the Treasury with respect to 12 U.S.C.Secs. 1951-1959, the California Department of Insurance,or the Federal Trade Commission,and self-regulatory,organizations. (6) The confidential consumer information is released(A)to a consumer reporting agency in accordance with the Fair Credit Reporting Act(15 U.S.C. Sec. 1681 et seq.), or(B)from a consumer report reported by a consumer reporting agency.' (7) The confidential consumer information is released in connection with a proposed or actual sale,merger,transfer,or exchange of all or a portion of a business or operating unit if the disclosure of confidential consumer information solely concerns consumers of the business or unit. (8) The confidential consumer information is released to comply with federal,state,or local laws,rules, and other applicable legal requirements; to comply with a properly authorized civil,criminal,or regulatory'investigation or subpoena or summons by federal,state,-or local authorities,or to respond to judicial process-or government regulatory authorities having jurisdiction over the financial institution for examination,compliance,or other purposes as authorized by law.; (9) When a financial institution is reporting;a knnown or suspected instance of elder or dependent adult financial abuse or is cooperating with a local adult protecting services agency investigation of known or suspected elder or dependent adult financial abuse pursuant to Article 4'(cormnencing with.Section 15630)of Chapter 1 of Part 3 of Division 9 of the Welfare and Institutions Code. (1€1) The confidential consumer information is released to a nonaffiliated third party in order for the nonaffiliated third party to perform services for or functions on behalf of,the financial institution in connection with the financial institution's products and services,such as mailing services,'data processing or analysis, or customer surveys, provided that all of the following requirements are met: (A) The services to be performed by the nonaffiliated third party would be lawful if performed by the financial institution. (B) There is a written contract'between the nonaf'f`iliated third party and the financial institution that prohibits the nonaffiliated third party from disclosing us ,g the confidetntial_consum r information other than to carry out the purpose for which the financial institution disclosed the information,as set forth in the written contract. (c) The confidential consumer information provided to the nonaffiliated third party is limited to that which is reasonably necessary for the nonaffiliated thud party to perforin the services contracted for on behalf of the financial institution. p.6 (11) The confidential consumer information is releasedto identify or locate missing and abducted children, witnesses,criminals land fugitives,parties to lawsuits,parents delinquent in child support payments;organ and bone marrow donors,pension funds beneficiaries, and missing heirs. (c) NothinI in this ordinance is untended to change existing law relating to access by law enforcement agencies to information held by financial institutions. ####.060 Insurance and Securities Disclosures (a) The restrictions on disclosure and use of confidential consumer information,and the requirement for notification, disclosure, and opportunity for the consumer to either direct that the confidential consumer information not be disclosed or provided prior written consent,as provided in this ordinance, do not apply to any person or entity that meets the requirements of Section 4W.064(a) (1)or(2)except when confidential consumer information is or will be shared with an affiliate or nonaffiliated third party. (1) The person or entity is licensed in one or both of the following categotiesi and is acting within the scope of the respective license: (A) As an insurance producer,licensed pursuant to Chapter 5(commencing with Section 1621),Chapter 6(commencing with Section 1764),or Chapter 8 (commencing with Section 183 1)of Division 1 of the Insurance Code. (B) Is duly licensed to sell securities. (2) The person or entity meets the requirements'of,flection#x###.064(a)(1)and has a written contractual agreement with another person'or entity described in subsection .(a,)(1) and the contract clearly and explicitly includes the following: (A) The rights and obligations between the licensees arising out of the business relationship relating to insurance or securities transactions. (B) An explicit limitation on the use of confidential consumer information about'a consumer to transactions authorized by the contract and permitted pursuant to this ordinance., (C) A requirement that transactions.specified in the contract fall within the scope of activities permitted by the licenses of the parties. (b) The restrictions on disclosure and use of,confidential consumer information,;and the requirement for notification and disclosure provided in this ordinance, shall not limit the ability of insurance producers and brokers to respond to written or electronic,including telephone; requests from consumers seeking price quotes on insurance products and services. #####.470 Administrative Fines - (a) In adtir"b any- er remedies and penalties provided by law,any financial institution that negligently discloses or-shares confidential consumer information in violation of this ordinance shall be liable,irrespective of the amount of damages suffered by the consumer as a result of that violation,for an administrative fine not to exceed one thousand five hundred dollars($1,540)per violation. P.7 (b) Any financial institution that knowingly and willfully obtains,discloses, or uses confidentialconsumer information in violation of this ordinance'shall be liable upon a first violation,for an administrative fine not to exceed two thousand five hundred dollars ($2,500)per violation,or upon a second violation for an administrative fine not to exceed ten thousand dollars($10,000)per violation,or upon a third or subsequent violation for an administrati e'fine'not to,exceed twenty-five'thousand dollars($25,000)per violation. (c) ;Any financial institution that knowingly and willfully,obtains,discloses,or uses confidential consumer information in violations of this ordinance for financial gain shall be liable upon a fust violation of this ordinance for an administrative fine not to exceed five thousand dollars ($5,000)per violation,or upon a second violation for an administrative fine not to exceed twenty-five thousand dollars ($25,000)per violation,or upon a third or subsequeht violation for an administrative penalty not to exceed tW6-Hundred fifty thousand dollars ($250,000)per violation and shall be subject to disgorgement or any proceeds or ether consideration obtained as a''result'-of the violation. (d) Nothing in this section shall be construed as authorizing an administrative fine or civil penalty tinder both####.070#.070(b)and(c)for the same violation. ##N.080 Fair Credit Reporting Act or federal Conflict This-ordinance shall not be construed in a manner that is inconsistent with the federal Fair credit Deporting Act(1.5 U.S.C.Sec. 1681 et seq.).; #"#.€190 Severability (a) If any provision of this ordinance is held by any court or by any Federal or State agency of competent jurisdiction,to be invalid as conflicting with any federal or State law, rule or regulation now or hereafter in effect,or is held by such court or agency to be modified in anyway in order to conforms to the requirements of any such law,rule or regulation,'such provision shall be considered a-separate,distinct,and independent part of this ordinance, and such holding shall-not affect the validity and enforceability of all rather provisions hereof. In the event that such law,rule or regulation is subsequently repealed,rescinded, amended or otherwise changed,so that the provision thereof which had previously been held invalid or modified is no lunger in conflict with such law,rile or regulation,said provision shall thereupon return to full force and effect and shall thereafter be binding. (b) N any section,subsection,phrase,clause,sentence,or word in this ordinance shall for any reason''be held invalid or unconstitutional by a court of competent jurisdiction,it shall not nullify the remainder of this ordinance but shall be confined to the article,section, subsection,subdivision,clause,sentence or word so held invalid or unconstitutional." SECTION 2= j&- *anceshall be-effective-January 1,2003. P.8 +v- v.rj ..yy... v�y.. vJ/*J✓tLtJ.JVJV I.LYLl,.4,k.4�'�.G"`',1Itt4. SF aft '� tivvnv. fgate.egm Return to regular view' Privacy: the voters' turn Tuesday,September 3,24092 0322 San Frac ciswebitgoicig. URL:ht .Il�vvw.si'ate.c©srtc i-bin/article.e i?fife=fchroniele/arehivefo42ft11E#3I35(35E3 7.I�TI FOR THE ' tiIlRD straight year,the California Legislature has proved incapable of standing up to the financial-services industry to protect consumer privacy. Californians may have to do it themselves. We have a suggestion for the drafters of a Larch 2004 ballot initiative: Keep it strong and simple.Put the burden on banks,insurance companies and stock brokerages to get customers, permission before selling or sharing personal financial information. Oh, they will howl.They will spend tens of millions of dollars on phony arguments about how a privacy law would prevent us from using ether banks'.ATM machines,getting tailor-made offersfor equity leans,or learning about those"affinity" credit cards that support your university or earn frequent-flier miles. The initiative should be drafted to let financial companies do whatever they want with the personal information they compile from your applications,account balances,purchases and Web site visits. They should be able to share the details with their affiliates,other banks, telemarketers or evert used-car dealers who want to know who among us is spending a lot of money on repairs. They would just need to ask. "Today,many companies,including major players in banking and insurance,are not being; forthcoming about how they can and do use your personal financial information. Even if they were,your ability to stop them is extremely limited under federal law. The legislative hearings showed how'Citigroup, for example,was using its databases to serve up custom-filtered "contact lists" to telemarketers and was profiling the elderly,minorities and less-educated customers fora hard sell on certain insurance policies. Let them make the case that such practices are in your interest. Rest assured:'If the burden were on them,the process would be simple,convenient and speedy. The checkoff boxes explaining your options would be in plain English. Your privacy preference would not tape up , to 90 days to process, as it does now with some banks,because the burden is on you to"opt out.'" Most important, unless you said otherwise,they could only share information as required to administer your account or provide services you requested. The three-year battle for a financial privacy bill has shown that the stronger the bill, the lower the chances of passage inside the state Capitol. Interestingly, polls show that it's just the opposite with voters. Support rises proportionately aft 9f4i2002 10:10 AM _..._M.._..,,.......�...;.-�...,....�•.s.avwu..ay.vtj... -.as.vv.uvr:v.dra+a«.rv..v i.0<a.�ay�t^-�t tMtt.. with the simplicity and strength of the measure. We have a feeling that the same venter-politician dichotomy will apply to money. The industry invested more than$1 0 million in campaign contributions and lobbying fees on Gov. Gray Davis and 120 legislators--and it got its way. In North Dakota,supporters of a recent financial-privacy referendum credit heavy industry spending on a doom-and-gloom advertising campaign with helping the measure pass with a 74�-percent vote. And the ATM machines,still work in Bismarck. California's initiative process was established in 1911 out of frustration that Southern Pacific Railroad and other powerful interests were dominating Sacramento,thwarting the public's will. Sound familiar? Legislators will try again next year,but don't hold your breath. Get ready to circulate the petitions. Tomorrow:The roll call on Saturday night's Assembly vote on Sen. Jackie Speites financial-privacy bill, SB773. 02402 San Francisco Chronicle. Page.A- 18 oft` 9/4/2002 1'0:10 AM au�.:. ..,,Ja ...,xy;, .:13,.....x -aa�.y.., w.bw rvyr,a'uaaueu aa..sw.a,�,r...i-ivsr�tesss.v✓z✓i..ue vvv✓.t,rt i"'ti.rY""!'++a"u wwwsf�ate. ra Returnto.regular vitw Financial privacy issuest go down righting LOUISE CHH,Assvctated Press Writer Sunday,September 1,2602 02002'1 ssodated Press URL:ht :11 vcv.sh 'te,coM!t z i-bi 'articles i?ftle=/ eLi /archive/2bb2109/4l lstateo315EM 5.DTL (09-01)00:15 PITT SACRAMENTO(AP)-- California consumers will not gain any new financial privacy protections this year,despite threedifferent attempts to pass such a bill on the last clay of the legislative session. A turbulent'debate over the issue culminated on the Assembly floor Saturday, as lawmakers first killed a bill by Sen.Jackie Speier,D-Daly City,that would have allowed consumers to prohibit companies from sharing their financial information. That bill was then amended, passed the Assembly and thea slaughtered in the Senate, after Speier called the new version a " "share." The Assembly narrowly voted 34-36 Saturday afternoon to kill'Speier's original bill,which was the strictest of the tree measures. Shortly afterward,Assemblyman John Dutra,D-Fremont,proposed amendments to the bill, which were backed by a'coalition of Democrats and Republicans who opposed the previous version.The amendments would give customers the ability to prohibit companies from sharing their financial information with non-affiliate companies,'while Speier's version would have applied to affiliate companies as well. Dutra said the bill still would have been the strongest privacy law in the country and could have been much stronger if the two had worked together. "Keep in mind,mine get 49 votes(in the Assembly).Hers got 34(votes),"Dutra said. "Regardless of what she said about how much more beneficial it would have been,it's not beneficial if you can't enact it into law." Speier and consumer activists said the amendments weakened the bill to the point it would not offer'consumers enough protection. Dutra previously had plans to introduce an entirely new bill but reportedly had trouble finding a Serrate author, forcing him to "hijack" Speier's bill without her approval. With Speier retained as the bill's author, she attempted to remove the bill from the flour,only to have supporters of the new bill counter with a vote to override her request. The bill passed the Assembly in a 49-12 vote. Speier,however,promised to "take it up and kill it after exposing it for what it is."She was successful: The bill got just one vote. In a last-flitch effort to get a more stringent hill though, Speier worked with Assemblywoman Jackie Goldberg,D-Los Angeles, to reincarnate her bill in the form of another bill. I of 2 9/412002''10:11 AN ....;... «.�. ....3y,. >.�,„,,� ==t*N..+ :.�+..ax,�cut.uvxxn v�t-u�xvna.xw�a..a.�..,rr v t r suas�.v.r xauu t vcty.x.v a t.tycag�.tc-•�tt ttti. The new measure,authored by Goldberg but virtually identical to Spe er"s bill with some, minor arnendments,cleared the Senate,27-l0,but was then stuffed in the Assembly"s Banking and Finance'Committee,where it was never heard. Rosemary Shahan, legislative director of the Consumer Federation of California, said her. organization probably won't try to get a bill past lawmakers next year and will instead try to get a financial privacy initiative on the 2044'ballot. "I think it snakes the case for why we need an initiative,,"Shahan said. "The Legislature has shown itself for three years now that it is incapable of doing what the public'wants." Speier vowed to propose more legislation next year,saying she will"not rest until consumers in this state have the privacy protection that they want." On the Net: Read the bill, SB773 by Speier and AB2347'by Goldberg,at www.legnfo.c .gov. ©2002 Associated'Press 7 of 2 9/4/2002 AM vu.I It.tt.I.I trxwu.:uu A^--—K ttt.b Ut-gt4 It...swcw uv .9ttkl.tlriwW.at�alW..ttt.ptgt-,UtiLM UVlc.+u�'...VLVUs✓4tWv tttva.r l..,J00-cm t L'OLLYP."Yt Jittr.. wwww.sf¢at .earn f(gu tore utaar view Consumer privacy bill,dies Moderate Democrats unite with state GOP Crri,�n� V..Qhronlde SW W Sunday,Septernber 1,2002 02002§jIn Franco Qrronide. URL:hW-//Www.sf gatexqc i-bin/az1%cle.c i file=/chroni chvel2tlE 2/ I01f_ 155884.DTL Sacramento--For the second year in a row;the state Assembly, led by pro-business Democrats,killed''a far-reaching financial privacy measure. Moderate Democrats joined Republicans to defeat the bill on a 34-36 vote,ending what was possibly the most contentiously debated piece of legislation this year. The closely watched political drama pitted consumer advocatesagainst banks and insurers, which spent more than.$10 million on lobbying and campaign donations. "I will not stop until we have a strong privacy law in effect," said the bill's author,Sen. Jackie Speier,D-Hillsborough. Top Democratic Assembly leviers had blocked a floor debate on the bill for days.Saturday's vote came only atter the Senate,using shame and strong-arm tactics,forced the issue. After defeating the measure,moderate Democrats pushed a weaker version of the privacy bill that Speier said left consumers without adequate protections to block the sharing of their; private financial records. But the amended measure appeared to have little chance opassing the Senate,which signaled it had no interest in the bill earlier in the day by endorsing Speier's bili for a second time. Speier said Gov. Gray Davis had actively lobbied against her proposal, despite publicly proclaiming his support for a strong financial privacy bill. She said Davis called one legislator to weigh in against the bill-- at the same time she was in the lawmaker's office. A Davis spokesman was not immediately available for comment late Saturday. Speier said the vete showed that corporate interests continue to hold sway over the Assembly and that moderate Democrats were"playing with the public interest and cashing in on it."' On the Assembly floor,Joe Dation,D-San Rafael,urged fellow'lawmakers to support Speier's bill,but to little effect. "I think it is the strongest financial privacy bill in the nation,"he said. "The question you have to ask yourself is: Do you support consumer choice or not?" ASSEMBLY SPEAKER SEES GAPS But Democratic and Republican legislators alike said the measure would harm California's 2 of 3 9/472002 10:10 AN va..a.ru.rax;r�snrravX uxrr s.ai4,9+ xvxuuw us..ua,u rsrw.x usa urixw r.aur •u<w u*✓�. isload,w W w.01y'aie.+w iv%,�,C-tlil4cu ii IGf jg"...GIZUl/.UVYIVtIlYtt+E1;3.J 1101E.4J11.+4SC1 nnt; economy and asserted that the measure was loaded with special-interest protections. Assemblyman Louis J. Papan,D-Millbrae,said the bill had"gaping loopholes that do not protea the public." Assembly Speaker Herb'Wesson allowed the vote only after state Senate President Pro Tern Jahn Burton,D-S-1n Franeisco,appeared to bill one of the speaker`s pet bilis,a measure to give; Hollywood television and movie production companies tax incentives to filen in California. Speiees hill;SB773,would have given Californians greater control over how banks, insurance companies,stock brokerages and other financial services companies use bank balances and spending patterns and other personal financial information. It would have prohibitedcompanies from selling personal data to third parties without first getting a customer's permission in writing.The measure also would have given consumers the option of barring institutions from sharing personal information internally with affiliates of the corporation. After Speiees measure failed.,Assemblyman John Dutra,,D-Fremont,introduced amendments to the bill that would require financial institutions to obtain customers'permission before selling their data to outside,nonfinancial companies. The amended bill eliminated controls on how information is shared between different divisions of the same financial conglomerate. The amended version was denounced by supporters of the original bill as a sham. "This amendment that purports to give important privacy protections for Californians is a minimal, even arguable protection,"said Assemblywoman Hannah Beth Jackson,D-Santa Barbara. "This notice is misleading to the public. " MILLIONS SPENT'BY OPPONENTS Bay Area lawmakers who voted against the original bill were Dutra,Papan,Joe Canciamilla, D-Pittsburg,;and.Lynne C. Leach,R-Wain t'Creek.Rod Pacheco,R-Riverside,was the only GOP Assembly member to vote for the measure. Financial institutions that opposed Speier's measure have contributed$4.7 million to the campaigns of lawmakers and Gov.Davis and have spent more than$5 million on lobbyists. Speiees bill grew out of an attempt to strengthen federal taw,which consumer groups say is °too lax and open to abuse. A 1999 federal law reversed Depression-era regulations on the mergers of banks, insurance companies and other financial institutions and required companies to tell consumers they had the option not to have personal information shared with third parties. But consumer advocates say the law leaves consumers powerless to control the trade of certain types of financial information. The burden is on consumers to block the sharing of information,'LandL notices sent by banks.have been roundly criticized as intentionally confusing. Email Christian Berthelsen at cberthe senCa s chronicle.ccam ?of 3 9/4/200210:10 AMs ...p... -vy v .<w..ry,. .., .. .��.. ....ye .....w.x«a.v..w,.ia..x x-,,r ..aova y�sw-'a✓qy'✓,er✓vw. ... . This story is taken from otitic at sacbee.dom. Financial-privacy bill hits major hurdle But Davis gets a tougher measure on driver's licenses for Immigrants. By Kevin Yamamura and Jim Sanders -- Hee Staff'Writers - (PublishedSeptember 1 2002) On a whirlwind final night of session Saturday, state lawmakers'blocked a high-profile financial-privacy proposal while they sent other measures on immigrant driver's licenses and housing construction defects to Gov. Gray Davis. One of the most heavily lobbied bills of the two-year session, SS 773 would have blocked financial companies from sharing a consumer's personal Information without permission in most cases. The measure died last year on the final night of session, but a renewed effort this summer on the;part of its author, Sen. Jackie Speier, D-Hillsborough, breathed new life into the proposal. On Saturday, the Assembly treated SB 773 like a pingpong ball. In an initial vote,the bill fell short of passage. Then Assemblyman John Dutra, D-Fremont, hijacked the measure, Inserting business-friendly amendments that allowed companies to share information with related affiliates without requiring'a customer's permission.' Dutra and other Assembly lawmakers,touted the emended version as still the strongest privacy measure' in the nation, while consumer,groups and liberal Democrats charged that the'bill had been gutted. The amended bill was on hold in the Assembly late Saturday. "It's been a circus and a charade,"said a disappointed Seler. "Consumers will continue to be vulnerable in this state." On other key legislation Saturday: * The Senate sent a compromise measure to Davis that would enable as many as one million undocumented immigrants to obtain:California driver's licenses if they,pass criminal background checks. Lawmakers previously sent a separate proposal to'Davis,'but the Democratic governor demanded changes,including a battery of checks to ensure that license recipients are not criminals. After days of negotiating with Davis, senators Saturday approved a second measure that would require license applicants to submit fingerprints that would be used to determine any past criminal involvement. The legislation applies only to undocumented immigrants who,are not yet citizens or permanent residents but have filed citizenship papers with the federal government. Sia 804 would prohibit the state from Issuing licenses to felons or those facing;a conviction for serious crimes, such as large drug transactions or terrorist plots. Proponents assert that issuing driver's licenses would make California streets safer because undocumented Immigrants would be able to purchase insurance and receive training. Some senators on Saturday anguished over SB 804. While they say It is discriminatory and unfair, they want undocumented immigrants to obtain licenses. Seri. Deborah Ortiz, D-Sacramento, said SB!804 treats immigrants "as second-class citizens. But right now, they're not even second-class citizens." of 3 914/2002 10:03 AM t ne NS;ratrMto):lee-»mobee.com--F'inancialixivacy bill bits major hurdle :wysiwylr.//56/httfir:/lwww sac .co Wconte,..ics/v-print/story/.42241 Shp-52450$?c.h The Senate passed the bill on a 25-8 vote to send'`It to Davis, who has no stated position on the bill. *The Senate passed a last-minute measure exempting small-scale car dealers --Including the bill`s author, Sen. Ma rice 30hannessen -- from a new law that requlres dealers to post more expensive .surety bonds. The bill,>B 2073, previously set up a grant for short-lime railroads. But Democratic lawmakers Wednesday waived deadline rales,allowing johannessen to gut the bili and!Insert the exemption. Johannessen provided the Ione Republican vote for the budget in June. The Redding lawmaker said the Increased bond requirement was unfair to small-car'hobbyists, such as himself, who collect and purchase limited numbers of vehicles each year. Critics called the last-minute move a special-interest exemption. The Senate voted 24-5 in favor of the measure. *A long-discussed bill that could spark housing construction went to Davis on Saturday. SB 800 by Senate leader.john Burton, D-San Francisco, and Wesson, b-Los Angeles, enables builders to fixconstruction defects'before'homeowners can sue. The bill is Intended to encourage more insurers to cover builders of apartments In California. The Senate passed the measure on a 33-0 vote. * Drivers who have carried insurance for at least three years would receive a policy discount under a bill sent to the governor, but consumer groups say that It would unfairly burden the poor. State .Insurance Commissioner Harry';Low plans to Implement rules that would let Insurers consider a driver's insurance past--dubbed "persistence" --only when customers renew their policy with the same. company. SB 589 would expand that policy by enabling drivers to receive a persistence discount from any insurer, not just their current one. Proponents say the measure would Increase competition and lower prices for most drivers. But Doug Heller, of the'Foundation for Taxpayer and Consumer Rights, said it would create another barrier to low-income drivers seeking Insurance for the first time He said companies'would offset discounts to long-term'policyholders by charging higher rates for drivers who have never had coverage.: SEI 689 passed the Senate 30-0. * AB 669, allowing creation of a 31.1 tion-emergency telephone system, was sent to the governor.'The Assembly voted 68-7 to concur In amendments, The measure, by Assemblyman Robert Hertzberg, d-Sherman Oaks,would permit local governments to operate such a phone system In hopes of reducing 911 calls for iron-emergency police, fire and other services. Hertzberg said 20 percent to 80 percent of calls received by 911 systems are not emergencies. * AB 2240, gluing courts greater latitude to overturn paternity judgments, was sent to the governor. The Assembly voted 46-16 to concur in amendments. The bill sets conditions under which a man who slid not initially challenge an allegation of paternity, but later discovered he did not father the child, could challenge a judges paternity order and sue the biological father for financial relief. Regardless of ONA results,however, a court'would not be obligated to overturn a paternity judgment if doing so would not be in a child`s best interest. of 3 9/4/2002 10:03 AM The Sacranmto See—sac 666.torn—rinanetai-prtvac blit hitrmmajor hurdle wysiwyg:/1,56&ttp-/Avww.sacbee.coTWconte...icev-pTinVstory/4224156p.5245087c,hi AB 2747, proposing tax credits designed to encourage Hollywood studios to film in California, died Saturday in the Senate Appropriations Committee. The measure would have given studios a tax credit of up to 15 percent for wages paid to film a motion picture, excluding salaries over$200,000� AB 634,regarding mandatory kindergarten attendance, was sent to the governor.The Assembly concurred in amendments, 4120. The legislation would prohibit children between the ages of 5 and 6 from withdrawing from kindergarten if they have attended classes for at least 30 days during the school year. Currently,children are not compelled to attend classes until the first grade. Many parents send their kindergarten-age children to school occasionally not daily which can confuse them and disrupt the pace of education, AB 634s supporters say. About the Writer --------------------------- The Bee's Kevin Yamamura can be reached at(916)326-5542 or kyarnamuraOssicpee.com. Go to Sacbe / Back to 5!Qty Contact Usffetdback I Privacy Policy I Terms of fisc News 1SWEtSIDUSIne IPOI-Iti I Opinion I Eoltdal-n-m—M I Lite9vie I Travel 1 Wmen Cm I CwAft(k I Home I 15hQRQ1W HeID I Mm 1 Newsletters I SAC_MaR I subscribe to the Print Edition I Traffic I pellvery About Us I Advertise In-The Bee I Ai:btertlse Online I Contact Circulation-Customer Service I Events [Sacramento See Web sites) MoyleClub.r.om 1"a be.e.wai I Sacramento.rom This article Is protected by copyright and should not be printed or distributed for anything except personal use. The Sacramento See,2100 Q St.,P.O.sox 1S779,Sacramento,CA 95852 Phone: (916)321-1000 Copyright The Sacramento See/ver.4 of 3 9/4/2002 10:03 AM Ph"q bil ► a scJEMSL'Y ;Torii Pie 1 compating Pivacy wops"Is the bill than accept them. A rneasu€eawaiting a utile in the 58773:Requinis annual privacy Nq Privacy p Assembly,SB7�3,would strength- rkotices,one for state taw and and would cut the heart of `"l ey en financial privacy taws in Califor- for federal,in clear language,so the protections we're trying to iia.Moderate Assembly l:iemocrats customers can desire their level provide;for the consumers out of have proposed changes.Here is a privacy protection.targe compa- l e!!d the bill," she said. "lt really just comparison of the competing pro- hies would have to provide a post throws us back into the arms of posals: age-pals,self addressed envelop the federal (law) that everyone SB773:Prohibits personal infor- with the notices, now knows is not worth the paper ination,;such as bank balances and Amendments:State and federr hostagebit's printed on'' spending habits,from being sold to , notices would be corr"ried in on, "' " ` " '' The amendments are expected a third-party marketing company, form.E narkclal companies would irr rJ to be introduced ben 587'73 is unless the consumer gives permis- have r 'ce teewaywith the Ian- Deffiv o brought up for floor debate,possi- sbrL guage and presentation of the no bly as early as today.Speier's bill Amendments:No change. tires---including removing strop, faa`led in the Assembly last Sep- $6373:Allows bards and,insur- clear language and replacing it wi Moderates insist tember after 21 members de- ante customers toblock a arge more ambiguous wording.Banks slimed to vote. conglomerate from sharing person- would not necessarily have to pro at information among affifiated vide postage-paid return enve- on amendments Financial companies that op- companies. to pose the bill have donated $4.7 Amendments.,Customers would $8773:Exempts customers of Speier apposes million to lawmakers and Gov. not be able to block a conglomer- USAA,the insurance company the C3ray Davis and are mounting an ate from sharing information with serves the military and"Integratet ByChrkitiun Berthelsen intense lobbying effort to defeat an affiliate that offers similar servic- financial services compaoles such CsRo �c►e STAIF wterxEx the bill Before lawmakers adjourn esor products.{Alt affiliate is de- as ridelity and American Express. r, their session on Saturday. fined as a companyat least partially Amendments Deletes exemp- SACRAMENTO—The fate of a Chief among the amendments controlled by another company tion, sweeping financial privacy bill is one that would not allow con- throughthe ownershipof stockor More information,Including was in the Bands of moderate As- sumers to stop financial conglom- ' the election r>#nd a nt w Another votes and analyses,Searchat sembly Democrats ^who warned erates from.sharing private finan- propill to stows ari nt would attar- 58773wwwietindera.grl inforafor the bill to allow sharing of i€iforma- Sg773 under"Bill information."Th Tuesday they will withhold sup- sial informationwith affiliates tion for"servicing'customers,but bill's author is state Serx.lackie port unless changes are"consid- that offer similar,products would continue to restrict sharing Spefe D-Hillsborough. erect" that consumer advo"tes Consumer groups say the defi- for marketing purposes. claim would water down the mea- nition supplied in the amend- sure. went is so broad that virtually any The stalemate is holding up financial service would be fair said. the final vote on the Financial game, and information sharing from sharing it##ormatt`on abou Information Privacy Act, which would be uncontrolled as a result. Another amendment would ex- them with other a Cities tinder would give consumers greater They sap it would alsdi give huge erupt the sharing of names and the same corporate umbrella. addresses of customers, saying Another amendment woula control over how information advantages to companies,freeing they"do not constitute confiden- loosen restrictions on the Ian, about them is used by financial theirs to share information while tial consumer information."Still ' a e and res tation financial institutions for marketing purpos- hampering small'operations that g p es. '-must sin another would remove the allot- 'companies must: use to inform g Point marketing'agree- ney general's oversight in approv- consumers of their privacy rights, Assemblyman John Dutra, D- merits in order to sell their rod- p ` Fremont, said the amendments acts. p al of the notices. are intended as a framework for The amendments were provid- 13-mail Christian BerthoWn at negotiations with the bill's au- Citigroup, for example, has ed to Assembly; Speaker Herb cberthelsen@sfchronicle.com. thor,state Sen.Jackie Speier,D- more than Under affiliates and Wesson in the hopes of facilitat- subsidiaries. Under current law, a greet' with S Hillsborou h. any Citigroup entity —anything Ma a melio,a ng with S for Davis, ; ier.Steve Dutra made it clear,however, from its auto leasing division, to that many'of the members he said the;governoi•s office had of speaks for would not support the, its Travelers insurance group to feted "a couple"of the amend- its Mexican banking operation v ments to the moderate Democrats measure without the changes can share information about a ""They really feel the bill is not customer with any other affiliate. asking how Davis felt about the response to calls from them conked and needs a little more GE has hundreds of affiliates and as bill. work," he said, adding later: subsidiaries that offer everything ' "There are at least'Ib members from power mortgages to dental "We're not trying to kill the who,if she doesn't consider'the plans bill,"he said. amendments,will not vote for the Dutra said a bank's mortgage As the bill is written, banks, bill." leading unit should be able to brokerages and insurance compa- > Speier said Tuesday that the share information about custom- nies would have to seek,and ob- changes would gut the bill and ers with ear lending units.Restric- twin,their customers'permission that she would rather withdraw tions on sharing between'diver- ''before selling information about ►ASSEMBLY:Page Ala C>of.I gent divisions such as' stock thein to other companies. It brokerages and insurance compa- would also allow consumers to Hies would still be prohibited,he prohibit financial institutions. Zdi4Z'$2.ESfk:7t l t+'�n t3J�i+xu.�rts cons"al 5o� ��bo as mesion nears, end borough, t embly ar€Joe Bill prevents s6ffing Nations U-Marin, unvesled a rallying. week ago,is the g cry Ecru tat Slll jp (1f t1c'lt1(3rf heavy-handed tactics by propo- �Vlt � drtftatS nems and opponents alike. {3n Monday,supporters of the By Andrew LaMar � bill handed reporters;copies of TIMES s�ewarrss �` testirrscsny given by former Ctti SACRAMENTO --- As law- groupem to ees in a Federal makers attempt to wrap up theirs CanclantRIO i t#r8 radCommission proceeding. work for the year a measure:that anies Tlie ttald how the corporation pits banks and insurance com- can prevent financial comp y iginst consumer and pri. from sharing their information used information on eonsusnrs with other firms. to snooker them into big vacy advocates has spurred afi- n _---- -- all-out lobbying battle that will The let eat Ideversionej.K D�- See PRIVACY,Back $e determine whether consumers which Sen:Jackie Spe'eri ft* el �� amendments.As itis now,the tactic.The suggestion is being iv ;7 k r,1d. landmark legislation would pre- made that the bill in its current vent financial companies from form is perfect and.it is not," FROM PAGE 1 GirG�t` selling consumer information to Speier believes the changes nancial services they didn't need. marketing firms or sharing it proposedby Dutra would gut the Meanwhile,opponents took out with their affiliates. bill,her staff said4 a full'page ad in the front section The provision;that would prow To make their case, Speier's of the Sacramento See to assail hibit the information from being allies provided the sworntesti- the measure as full of loopholes used by all companies that fall un mony of former employees of a and not in the public interest. der an entity's corporate umbrella Citigroup financial services af- Speier's legislation is one of has drawn loud complaints from filiate in a case brought by the dozens of controversial matters the financial services industry. Federal Trade Commission lawmakers will decide in the fi- Banks and insurancecompa- against the corporation for preda- nal bays of this year's session, hies say such sharing is interwo- teary business practices. which is scheduled to end at mid- ven into their business practices Gail Kubiniec, who worked night'Saturday.And diremany of and enhances customer service. until Feb. 22, 2001, for CitiFi- the hotly debated treasures re- Dutra, however,said the re- nancial in Tonawanda,N.Y.,tes- maining, SB773 is still up in the strictions of SB773 should be tified she would use information air. broadened so companies can on consumers to oversell them. The billhas cleared two As- share information with other of- "I;and other employees would sembly policy committees and is filiates if they are"vertically in- of't+en determine how much in- awaiting a#Tatar vote But the mea_ tegrated,"or all in the same type surance could be sold to a bor- sure's backers conceded Monday of business,such as insurance. rower based on the borrower's they do not have enough support tinder Dutra's alternative,an occupation, race,age and edu- to pass it in its current form.. auto insurance firm could send cation level,"Kubisuec said. A group of moderate Democ- consumer information,to a sub- "lf someone appeared unedu- rats,led in pert by Assemblyman sidialY without the consumer's cated,inarticulate,was a minority John Dutra,D-Fremont,say they consent,if that company offered or was particularly old or young, won't vote for the legislation *mother type of insurance,such I would try to include all the cov- without changes.But,Speier re- as life insurance. erages CitiFinancial offered. fuses to consider amendments. The Dutra plan would allow "'The more gullible the con- Dutra and Assemblyman Joe consumers to black any of their sumer appeared,the more cov- Canclarnilla,;B Antioch,are two information being;relayed to an erages I would try to include in of the Democrats o posed to other company for marketing this loan." SB773. Canciailla called:it a purposes. That's an approach "bad twill"that needs substantial backed by Canciamilla as well. Andrew LaMar covers state changes and therefore should be "Jackie (Speier) is just plain government.Reach Pains fe�for nest year. trying to ramrod this through...," at 916-441-2101 or atamarcc- l7utra has suggested five Dutrtt said."People don't like her times.com. r Sharing is a right Editor—Everyday,it seems,my Chronicle is littered with unso- licited junk articles and editorials proclaiming the virtues of the fi- nancial privacy bill SB733. As a customer,I ask you to please stop News flash: It is not wrong to share information. Quite the con• trary, our Constitution grants us the right to share information.' Since sharing information is a right,any restrictions on informa- tion sharing must be made not by Blanket legislative prohibitions, baby voluntary contracts between individuals.Scrupulous businesses already offer an easy way to enter into reasonable privacy contracts. If a parti RV . ' 0IL ¢i 4V rN �. LV IM � k. .. EyCt �► .n ' C63 3 bo 4t 41 �•o �, • _ r�, �� r..,r q��"tib '+� 6+ as•�G� �Q�yq G m bp° ; 44 '' � •,j...:{ air � �"" �� '� � �' � �'� 40 �r co U �z acs }Vcs � .� a�. 'cin n�. •� . 7z",4. _4 y, _1040 C;hionlCts ra Y�ic find"adtindtWij's ad , t6l*Wt priv Cy bill, o PRIVACY tion by some lawmakers that con- From Pulte A] sumer privacy was an issue impor- tant only to middle- and upper-class people. The measure's backers said the "�`he predatory practices of the ads misrepresent the tenets Of the large banks are particularly aimed bili. "We"11 see how effective it is,"' at thRicharrdd Holober,executive di ec- said Shelly Curran,a lobbyist for ' Consumers Union;."They've de- cided to spend the money doing ' this, and it's just going to show 'Thpredatory there is a lot of money behind the r; people who don't want lo see this practices of&e r measure passed." peier's bill would force;fman.' large bat&&are t cial institutions to obtain their cli- ents' permission before welling partir;urrl �d personal financial information z about them. Consumer t# S+EI� j Consumer groups say they ex. 1 pert an attempt to gut the mead sure on the Assembly floor by amending it to let;financial con- RicuARD Hot.oaisx glomerates' share information Consumer iederateonofCatijornia without being blacked by their customers,as long as the informa- tion stays within the family, of tot of the Consumer Federation companies offering the same of California. ; product. Holober released depositions Efforts to pass at least five ft- from a former.manager of a Citi- nar tial privacy measures; have Financial branch in New York failed over the year, and Speiees who said."lt was particularly easy bill did not win enough votes to to sell insurance to my Spanish pass out of the Assembly in Sep- speaking customers because they tember.Speier has resurrected the were not financially savvy," bill, and lawmakers have until Supporters of the privacy mea Saturday to take final action on it. sure urged lawmakers to set aside Both advocates and opponents any personal differences they may declined on Monday to provide have with the author.Some mock assessments of haw they think a erate Democrats have said they vote would go,although a Chain- were threatened politically when icle nose count found it may the bili reached the 'Assembly come up six votes short of the floor last year. minimum heeded for.passage. ` Consumer and!labor groups &mail Christian Berthelsen at said Monday there is a mispercep- cberthelsenWehronicle com. wowl THE VOICE OF THE WEST' EDITORIALS All lel the familyl- ' B Of the main arguments over thein by cotporations is enough to stop against proposcrlfrnancial--privy them from,doing the right thing,"Carmaejo cy legislation is that it would be said Monday. 1 ,unfair to restrict information Camejo is partially right.There are many sharing within a family of companies. good people in the California Legislature. This point deserves a closer loop. But personal pettiness also has a way of Citigroup,which has been lobbying ag- creeping into,the procexs—as has been the gressively and,funneling funneling;contributions to case with SB773. legislators and Gov. Gray Davis to defeat Some Assembly members are still brist1mg SB773,has snore than 1,800 affiliates. at tht way Speier and several tither women The question to ask is.When you get a Visa senators bolted'onto the Assembly floor last � card from Citibank;do you assume you have September to convince wavering lawmakers granted it permission to share your personal to support SB773.By all accounts,,they were financial information - fr6ni your applica- forceful and persistent,thou apparently not tion,your transactions,your Web site visits persuasive enough to keep 21 members from ? 4 a and mare--with 1,804 sopa- skipping thevote. nies sellnrg rnyr ad products un• "I'll tell you, if this bill derabroadcorporateumbrella7 Opponents may had a different author, it Davis addressed this'issue would pass.fll tell you that directly in a June 8,2441 meet- try to blow d straight'up," Assemblyman ing with The Chronicle's edi- Dennis Cardoza,0-Merced, tonal board. loophole into told a Chronicle reporter "I believe a family of,;com- over the weekend. poniescarrshareinformationif . privacy bill. Several points musts be you are clearly presented — made.First of all;this is not like in-tire first paragraph of a a resolution to honor Jackie letter—with the opportunity to`opt out," Speier as lets.Congeniality.This is about the said Davis."In other words,you should be most important consumer-protection meas- able tosay.`Wells Yargoj I bank with you,but ure of the session. I do not want Wells Fargo Real'Estate or Thereisalsoadecidedly sexist overtoneto Wells Fargo Title or whatever...to-have the the oft-repeated descriptions csf"senators in irrfmmation 1 g veyou.'That should bein the high heels"et nfronting Assembly members, ti frrst-paragraph,in big bold print." In other cont6d4,asserdvenew at the critical s The governor's call for clear disclosure and moment--a willingness to ruffle feathets— customer choice is reflected in the version of' is praised as leadership:. SB77'3(by So.JackieSpe er,D-Hillsborough? Besides,the two-year history of financial pending on the Assembly floor.Ih,-bill,co- privacy legislation in the state Capitol sug- authored by Assemblyman Joe Matson,D-%n Bests that a low-key approach favors the 204 Rafael,would,put a higher threshold on the lobbyists working the hallways on behalf'of sharing of information with I telemarketers companies that have contributed$4.7 mil- and other"undfiliated companies. In those lion;to Davis and key legislators.Just ask taste;the burden would be on the Bank or in- then-Assernbly�wornan Sheila TLuehi,whose sorer to get customer permission. financial-privacy bill was quietly killed in A group of self-proclaimed"Business De- committee in May 200%1;or Assemblywoman mocrats;'Inas been trying to create air error- Hannah«Beth Jackson,whose bill was reject- mous loophole in Speites bill by lifting any ed with little fanfare in May 1001.• restrictions on information sharing among California legislators need to be remind- affBiutes.The group may try to,add such an ed- straight up—to pass a financial-privacy amendment when SB771 comes',up for de- bill before adjourning this week bate,possibly as early as'today.Tht loophole -�--� should be rejected ICjITB88 Your views The vote on the bill is expected to be ex- tremely close,even though Democrats orci- Potentlatly key Assombty iremocrats on py 50 of so seats in the Assembly.Dav*who this issue include Lou Papan of Miftbrae(e.- ,called for strong financial privacy legislation mail pap+ * av3�`*t'o In his State of the State addles&,has yet to as- warns the bii€putted lysyl to lis tie�k sert on zeal leadership to help move,such a and t'€rianea Curnmittee;tssbn tlutra of f re- y p rnont{assatyrrrn#srelutrabaseum- bill Ltd his desk. btyca gov)Who wants the re.trktons on Fetes Camejo,the Green Party candidate atkote str�, remwed from$8773and fot gavornat and a supporter of S9773,sug- nonvoters from September ib6 --1W Bested the difficulty of passing legislation to c tlrg.Joe Canclaam tla off pittsturg iat- depriwc the financial services industry of"a tamtrtyrrerr+bercancaa04xeasmbtyca. swl,Barge€v omews ot'rr y is M.: license to&Driest you" vas symptomatic of a biymeer6e rE+ptthews aa€seu y er.gov) larger problem in Sacramento. and use Salinas tit tawnas tokhore,satik ""'given though theree'are nrrany good peo- nasarurr ca guvl Contact�iforurat€on for plc iii tine Legislature,Aepublicans and De- other Asses ably members can tSe fowvd at arwwWA"ensbty ea pov. mocrats,the pressure and the domination i w 44 � 0A lk sk tr Aw CO Or s ° tll �� q to '� 51. m ice tt a , ra " + o M, t 13+ Pi jjq � �'�• '�"' -.r f' �L�� (�'�� 'yam,�{� �r N' ��^�gyp"�,. S31 �.�g�4 ,��, r'' to "AV t1t PoA °si w ad o 11,12, VAR is sn p s cs cy , a Up ot ts zh ` t9 C S}v WCamI 4 ro sy� ' s � SAt7iRISAY,AtkGtiST 24,UO2 Privacy tneosutv 4 Sit T vote � �fWairlif d "ce ry tawd Assembly vbte FaPA2me srge43 ' " ' G 2 I r A company could,for esta rssple,: ,> Pane �.5 peieI h�, create a list of serdorr with high' wiU pass the floor:' equity in their homes and high toeistirEhaaiw , o mEt tarCu oi�ssaaarr ills hostile amendment lotton loan at Mated interest f rates Citaoarucs a SaoeAsiaNro Byaaau. Speier acknowledged in testb' tnony before the Judiciary Cam-' small operatiotts that must algid SAOgAuENTo—Ctearing one of the last hurdles taittee that her bill is based an joint maarketing agreemttitsin.or- for a finaziew-privacy mlaifu* a keY Assembly anecdotal evidence and a fear of der to sell their products, committee narrowly approved the landmark bill, what could happen.She said the Speier did On the support of lsriday and readied it lox a final showdown neat€ measure is not lust about prevent- one Repurbtiean this week,Assem- wctk, ung lank mail and talenrtarketixig blyxivan Rod Pacheco, R-Rivtx- with Assembly and'Senatt Democratic leaders tails but"rite irisidlcus practice side,who is leaving this year bew blessing the measure behdnd scenes,th#,Vwivaty of prttCtlirig customers and then tease of term limits Pacheco said hill was iipprbvetd by the Assembly Judiciary Co- selling ox twadtag the irsformation he has been working with Speier mittee with only a handful of moderate Democrats Sprier xva%follower!by Steve for months refusing to vote. Slaekledge with the California "We need to get something Now it appears that:state,Sen.tache Spoior D- Public Interest Researc=h Croup done on this issue, Facheca said, Hillsborough,has one last Aurdle:passage inthe full who pulled out a federal list of "arid coming from my back- Assembly before the legislature stllourns An&33. affiliates for Citigroup,the huge ground as a prosecutor,.it deals The bill failed in the Assembly in September after 21 conglomerate based it rerun York; with identity theft and that is why members de clanatl to Note,.but over the past jarsaying that al}1,824 affiliates are it s very ixnptirtant to me Speier has picked up support. allowed under federal law to Gov,Cray Davis is still unde- Ry one coun4 35 to WAsseblymembersback share inforinabon without pet- tided on the Speter measure,This Fier bill,but slab needs 41 for pas mission. spokesman said l:riday.Banks and The measure was approved 8 3 insurance companies still fiercely M very hopeful itwill pass, by the Assembly Judiciary Gam- oppose'the measure and have the floor;'said Asstmb mittte,with Democrats john Du- Contributed $109,00 to Davis' Ellen Cariut€, l7-Batt W ;tra L7 Fretriant,and Joan Vargas, campaign ixt xecrait weeks ln'the clutitwoinan of tht, J D,San Diego,dtCliniw+gtvvott peak year, those same interests oinrnittet. `"$lie The Judiciary Gamntittte sac• have given $47 millionto:the has been debated r.. Cteded Friday in nm»deg a hos- L,egislature and Davis, hours,and I really do file amendment that had#teen in- All sides expect that Speier's .her,Have heard serted in 5peder s mtasurt in the measure, It approved by D vis, constituents and they knew oat J kitvpa#et' Asaemia,Banlc{ng aad �ce will end up in mat, g in- l people support being Able tri pon Committee,which srnrowly Ap- terest say the measure violates the s tral haw their primo mforrrtptiort u ILtd." proved the measure Wtdtxsday= federal FW Credit Reporting Act, ` The Speer measure Curt about because, the The hostile amendment would whieh prohibits laws that blodlt federal government in 1999 mlliiwcd financial oom- have gamed a key portion of the the sharing of information be. parries€o expand their operAMM iota new areas bill and a awed msuranee tom-' testi n affiliates. state Yarm hutment a for is now� x paries aid hanks to share info And the Wsurance industry be- up State I*rn bank—and art expettai to relyyxnatim oil their customets with lievesthe bill would force insurers on the vast'amatmts,i f ixiforrivaWit about 'afftUtes offettng similar prod- 'to violate other laws that require their customers to nnarket products. t them to fully inform their euus- Sptier smeasure would a a oustoma to pre- insurance companies In part- tourers about all available prod- Whir the exchange of' titan t etwtert alar wanted the am adment be- acts so'they dont get caught'un- affillates of a Marge cis like Citibank or cause thty are required to der insurad, Bank of f tMCnstiiiritracan raft into affiliatesunneer 'If you check the hnaximutn include analyses of speri ` its,debt balaneea, decades old law They argue that privacy box we cannot offer you private phone nuunben and#rte h'atoxies' Speitt's measure would allow the umbrelLc policy,Whirl is un. Federal law already prob'bits.the seliing tr trail- some customers to block the shay- der a separate affiliate;said lean intaTCredit eardnu 6ers.lsutsmiscompaideathat � portant information oyorr,resident of the Per- haw&pxodudts on the phone have agreenneapu with ng a family of coin sonal lnsuitance Federation of credit card cornpan IUs that allouv a consumefs ad- no offering the same product, California."If someone slips and count to be charged aui:_atcally; but Consumer groups said the falls and you're exposed,you're spur's measure wa nldprabibit trent Caird Corn• arrigndt nt would have givtrn a going to sue-us for not letting you panes or banks from supplying a potential list Of tremttidous advantage to huge know about the u ibrella policy." customers to thtsc outside marketing oompaiutts if Conglomttates such as Allstate or they are selling a noritltutncsial product lilts a Cruise Citlgraup freeing them to share E•truuif ItoLart Saticiday at vaeatlon or aluiniWo m siding, -:informatiisn while hampering rsatladayibpsfcduonidle.Com, Speier and consumer groups largue that private information is dowwi g too Sreety and sam0a un setupulottacampaniaatobuild Winbritttcttsto rs ; and these sou d;Wd pwodutcta theyhol t need rrwant r PRtYACYi?ogaA0CoL l r THE VOICE OF THE WEST 6F EDITOR I AL:4 Privacy bills revival BILL to give Californians more accounts into high-risk investments being control over their personal financialpushed by its affiliates. Consumer groups information was strengthened and point out that these practices are extremely dif- f passed ifv, Apassed by the Assembly judiciary ficult to track and prosecute,especially since a Committee on Friday, but,it remains a long 1999 federal law gave banks,insurance coin way from adone deal. panies and stock brokerages new freedom to. The financial privacy bill, SB773 by Sen. merge and there were no restrictions on infor. Jackie Speier.and Assemblyman Joe Nation, mation sharing-within rapidly expanding fam- still must make itoff the Assembly floor,where il,ies of companies. it stalled 1= September. Also, Gov. Gray Another concern is the way less-sophisti- Davis,who has received asix-figure flood of fi- sated customers are sometimes"steered'"by nancial-services industry contributions in re- companies to an affiliate's high-rate "sub- cent weeks, has not indicated whether he prime" mortgages, even though they may would sign or veto the bill. qualify for conventional loans..Again, cos- Banking, insurance and brokerage lobby- tomere financial.histories can readily identify s have mounted a. full-court press against those who would be most susceptible to a pitch 773."rve never seen anything like this for a lousy deal. ever,"Speier said Friday, Under 513773, a bank In the Assembly,one of the would have to obtain cus- easures barriers remains thelome, permission before Senate Bill 773 pusperception among some sharing sensitive personal in- rural and Southern California C1,earS JUdiCiary formation with a nonfinancial Democrats that the selling or company. For the affluent, sharing of personal financial Committee, the current free flow of infor. information is an"elite issue mation can be an annoyance. pfconcem only to people who For people on fixed or meager are being bugged by telemarketers in their incomes,it can be a matter of exploitation. comfortable homes during dinner hour, "It is just wrong to characterize this as a The reality is, the most insidious knowm wealthy person's issue,"said Shelley Curran,a abuses of financial data involve the working lobbyist for Consumers Union. poor and the elderly. The Speier-Nation bill now awaits action For example,U.S.Bancorp of Minneapo- on the.Assembly floor,where some members Itis paid a$3 million settlement after alleged- have a bad habit of not voting on tough issues ly providing.everything from account bal- —a practice known as"taking awalk"In a dis- pces to Social Security,numbers to:aule- turbing portent of what maybe ahead,Assem- marketer that was peddling $89.95-a-year blyman John Dutra,DmFremont,who had sup- dental plan&The targets of this marketing ported a stronger version of SR773 last Sep- campaign were offered 30-day free trials, tembet did not vote on the bill in the j4dicia- What they were not told is that the market- ry Committee on Friday.(His email address is in firm had the ability to automatically assernb4mumber.dutra@assembly.caic v). draw the fees from the credit card or check- It would be f it-ting for California to become in account of unwitting"customers" at the the first state in the nation to.seize the oppor- end of the 30 days. tunity,offered by Congress to exceed the weak The important lesson is that this scam privack rules in the federal Financial Modern.- could be prosecuted only because the infor- ization:Act of 1999 matron sharing violated the bank's publicly This is the state that established privacy as declared privacy policy, an inalienable right in its constitution.Few as- In 1997,NationsBank was fined nearly$7 pests of our lives are as personal as our family million by the U,S.Securities and Exchange financ6. Assembly members should be en- borntnission for steering many of its cus- couraged by voters who=e about priv;5 c --lomers—mostly elderly from stable savings pass the Speier-Nation bill. 7MI � HOW T W � Here's how SB773 compares with current federal law in giOng consurmrs control of their personal financial in- formation , it a or mance company wants to: 50773 Current 14W a Aell account balances,loan amounts,spending;profiles or Capt in Opt out other personal flivncial information to a third party. .. wr ire oust mer information Opt out No opt M with one its affiliates. wr,' i re sensve customer Information with outside companies {list out -Nokopt � that are erigned in a'dnt marketing agreemenr with atanck _�tituti . Requires+dear wrotice,t w plain tawgash so cus#smor imows how a Yesµ No winpany plans to share intormation and the customees right to step IL DEFINITIONS it Opt hi Companies must obtain customer permission first. a OptAm*Selling or sharing OK unless customer objects. ■No opt No restrictions. THqW,EY NtMS fzf geer version of S8773 slaked on the Assembly,floor on Sept 14,20 01 when it failed to+ga�the r41 votes:32 voter(yes. 6 voter!no and 22 did not vote. athe 2001 r avoters,Joe Nations,D-;San Rafael,nas worked with Speier to develop tie current vSB773 bill and RebeccaCorhn,D-Saratoga,Rod Pacheco,RRiverside,and Helen Thomson,0-ve declared their support. •'fuse Asse fly members failed to vote on 58773 when it reached the fluor last year; Sam i Anestad R-Grass Walley Marco Firebaugh D-Los Angeles Rod'Pacheco R-Riverside Thomas Calderon D-Montebeliv Darks Fromntwer D-Los Felix { Simons Salus O-Salinas lose CanciamiSa D-Pittsburg Jerome Norton zD-Inglewood i .Tuan Va as D-San Diego Tony Carden4s D-Sylmar lacy Law Suer Rd,a Mesa Roderwk Wright0 Los Angeles tiewrnls Cardoza D-Merced Barbara Matthews . D-Tracy. Charlene Z+wetttal R-Poway Id C Vez D-La Puente Woria Ne to McLeod D Chiino Lou as D-R al*m I Jet wy Oropen D-Long Bead Yoau.• get a-rmg addresses,oh*numbers and other contact Infornution at wwwAssembl3r ca. v and cricking on"m ber directory." i i 0-0 .�.� � Fighting for privacy �1 Editor -- Thank you for sup- porting SB773 and the -opt-in- standard opt in"standard for financial firms to share customer information (Edi- torial, "Restore the privacy bill," Aug.ZZ).My own experience with Wells Fargo Bank's"opt our poli- cy --•- requiring me to instruct them not to share information-- illustrates the problem with that ' approach, First,I had to give them mSo- cial Security' number twice --- once to the automated system in order to speak to a person and then to the person because the comput- er doesn't always agister the full i num ber as keyed in.Then I had to i' answer a series of questions specif- ically opting out of every single possible,level of information'shar- ing. Finally, I was told that my re- quest had been entered into the system but there is a processing time of 60 days.I can only assume that array request triggers' two months of intense information sharing within Wells Fargo. The Assembly needs to pass the privacy bill and, for my money, Lou Papan can't retire fast enough, NIELS ERICH Son Francisco ia ` DEL OMS BOAR13 OF SOR C ►l Y OF $TA.%OPP,CAIIFORN7A ,AN 0jWP!4 l E MATING THE DISCIO$UIRE OF CO'+IFIMNnAL 'T10 VINANCTa IN UNWR INFODRMA N:BY The Board of Supervisors of the County of , State of California,ORDAINS, as follows. SECTION LCl�hpter ,consisting of Sectio s�>€�iD t + W,090,of `6####of the County Ordinance Code are hereby added as €allow, 410 moose and Intent (a It is the purpose and intent a sf Lhe Board of Supervisors that the operaxiort of fm:: a] institutions as!de defined in this Or man. should regcil so as to provirie cu ►rue of financial institutions notice and meaningful choice about how:irrtarmation is shared or:sold by their ftn ocial institutions. (b) it is the intent of the Board;of Supervisors in enacting this brdinarice to afford persons greater financial privrotection than those provided in Public Law (lfi-1t?2,.the federal Cxrarnrrr :arh Ailey Act,and thai this ordinance be interpreted to be consistent with that pr-pose. 010 Trinitions (a) ontidential consumer intrrnation"means information(l)th t consumerprovides to a f racial institution to obtain a product qr service from the financial institution;(2�about a consumer resultg fro m any tranactioh involving a product or service between the financial institution and a consumer,or(3 that the f�aodial institution otherwise obtains about a consumer in connection with providing aptoduot or service to that consumer: Any piursonally identifiable info, rtation is ftnaicial if it was obtained by a financial institution in,cone coon with providing a fan, al'product or spice to a consumer,including the fact that,a consumer is a customer of a financial institution or has obtained a financial product or service from a fin Bial institution. Confidential consumer informWbn dries not iracludepublicly aralable formation that the financial institution has a reasonable basis to believe tally na€le available to the general public Erato(1}federal,�,car local �gpvesntnent records,(2 widely distributed media,or(34 di elosurres to the general public that are;required to be,node byfoderal,state,or local law. Cciential consumer information shall include any Iist;z description,or other grouping ofconsumers, and publicly available information pertaining to them that is derived using any nonpublic personal infarrnatit►n other than publicly available information,but shall not include any list,description,or other grouping of consumers, and publicly available information pertaining to them that is derived without using any c€rifidential consumer information. (b) Confidential consumer information includess,but is not limited to,all of the following; (1) Information consumer provides to a€ianciai institution tin an application to obtain P.I ( "Consume 'means individual rsr business that obtains or has bbta ned,front a financial institution as defined iti subsection(c) above, a financial product or service that is to be used primarily for personal,farily,or household purposes, or that individual's legal representative, or purposes of this ordinance, an in,: is not a consumer of a financial ittstitittion solely because he or she is (1)s pa rucipant or beneficiary'of an mployee benefit plan that a financial institution adrninistrs or sponsors, or for which the financial institution acts as a trs ,insurer;or fiduciary, (2)covered under a roa uteenor blanket insurance policy group annuity contract issue by the financial institution,or(3) a beneficiary.its a wooers' compensation plats provided that(A)the financial institution all requited no.€ is and rights wed by this ordinance to the plan sponsor, provides group or.blat ket insurance policyholder,or group annuity con tractholdex and(13)the fuancial institution does not disclose to arty affiliate or any trona iliated*k4arty confidential consumer information about the individual except as authorized in Section #. consumer does not ixtclttde an individual who obtains products or services for business,corercial, or agricultural purposes> (g) "Control"means. the direct or indirect possession of the power to direct or cause the rireuti+ n ofthe management and policies of another entity; Control includes anyof the foIlowing: (1) ownership or power to vote J5;percent or xnctre of the outstanding shares of any class of voting security of a company;arti�rtg though one or more persons,(2)power its any tnAhrter over the election of a majority of the directors,or of individuals exercising similar functions,orf 3)true power to eicercise a directing influence over the management f policies o s cornp#ny. (h) 'Vecessary to effect,administer, or enforce"means the following: (1) The disclosure is required;or is a usual, approp 'ate x or acceptable method to carry out the transaction or the product or service business of which the transaction is a part, anal record or service or maintain the consurtter's account in ttte ordinary icourse of,providing theft uci service er ftmncial product, or ttr mister nr service benefits or cls relating.to the transaction or the product or,service business of which it is.a part,and includes the fall©wing: ( ) Providing the consumer or the consumer's agent or broker with a etation�,statefnent,or other record of trio taransaction, or information on the status or value of the financial service or financial product. } The accrual or recognition of incentives or bonuses associated with the transaction that are;provided b the financial institution or`another party involved in providing the financial service or product. (2) ',the dikIdsum is required or is lawful method to enforce the rights of the financial institution or of other persons engagl in carrying out the financial transaction or providing the product or service, (3) The disclosure is requireI d, or is a usual, approprii.ate, or acceptable method for nsuraxtce underwriting at the consumer's request,for rein urart ptarpc�ses.o for :any of the following purpeises as they relate to a consumer's insurance; A) Account administration. (B) Reporting,investigating, or preventing fraud or material misrepresentation. (C) Processing premium payments. (i)) Processing insurance clams. (E) Administering insurance benefits, including utilization review activities; (F) For internal research purposes. p,3 ............... ........... ...... .......... Nogin thisordinance shall require a fik- ancial, written to provide�a notice to consumer pursuant toSection060 if financial histitudoiif,does not disclose confidential'caisui146 rmatIon to any nonaffiliated third-party orloany afflliate, - ## except.as provided in Section #UQ, (b) Afinan-clilinstitution shall provide written notices and i consent acknowledgements: 0 or �ance to.consumers as sep te written documents that are easily required this:, separate identifiable and distinguishable fro.mothM documphts-t imay be provided to a c at,otherwise notice provided to:a�m olisumef. A ember of ahousehold , .. ,.pursuant:to.Section####.030 shallbe ccihsidtred notice to all members of that household o so4old unlessth at household contains anotheriindividual'who also has separate with the inancial institution., (C) wilti6ii u6ii6ei required by flus ordnance shall mciuOAt kast the following: (1) lhe specificitypes of hi bm*00 that would be dsclosed or shared, i (2) The ge ral pe cirstanPea underwhich the infrirmatirn W01Id be disclosed or Shared (3) 71171iespecific types of persons or businesses that wWd r—ecei-v if 6�the:ir ormation, and (4) The specific proposed types of uses:for the information., .0W.4,50 ExeixiptUsclosures (a) Secti-om~.0 30 shall not. apply to'information that is not petsonally identifiable to a par-ficular.P.M.011., ,:proconfidential (b) Section 030 shalt not hibit the.release of consumer information under the_:.fallowing circumstances: 'Ibe c-on"Wig consumer in-faftqI orm i LAdin .: tinister,ortfforce,n,. s�neces,s4qt, o,.e effect, a transaction requested or auffihodzedby the con Wrier,forin connection with servicingorp ro cessing.ifipanaial.P duct.orservice requested or authorized by the canstxrnx,'Orin..connectionwith m g or the c onswner's account with the fxnaucial- s or with another entity as part of a.privot'Jabel credit card program or other ext-ension Of orediton behalf of such entity, with a proposed or actual securitization or secondary market sale,including sales of 'q.rights,related to. transaction f:the - 0 con T'he confidential consumer informationon isreleased with the signed consent _- o consumer. acknowledgment of or' wauw it the ft, tion of 'the The confidential consumer information i k ea protect the confidential or.s6burity of the:financial(A) eleas to pro alit Y institution's records,.pertai n to:the consumer,,the transaction g ice or::product, or the therein. Released to protect Against or,prevent a ctual.orpotetitialfraud;identitvth eft, unauthorized:transaction clailns.:orotherliability. {Q Released for required institutional risk control,or for resolving customer disputes osinquiries, Released persons holding a legal or beneficial interest relating to the ednsu -ox. in (E) Released to persons acting in a fiduciary orrepresentative capacity on behalf of the consumer. p,5 ...................... ......-........ ........................... .............. ..................................... .................................. (1:1) The confidential consumer information is released to identify or locate missing and abducted children,witnesses,criminals and fugitives,parties to lawsuits,parents delinquent inn child support payments,organ and bonemarrow do ors,pension funds beneficiaries, and nxissing heirs. (c) Iotlung in this ordinance is intended to change existing law relating to access by law en brcement agencies to information held by financial institutions. #l###.060 Insurance,,and Securities Disclosures he restrictions on disclosure and use of confidential consumer information,and the irement for notiicaticn, disclosure;and,oportityfor the consumer to either direct that the confidential consumer information not.. e disclosed or provided prior written; consent, as prt,vided in this ordinance, not apply t€ any person or entity that Meets the c ements of Section# #.QoO (a) (l)or( )except when confidential consumer information is or will be shared with an affiliate or nonaMiated third p ( ) person or entity is licensed in one or both of the fallowing categories and is acting within the scope of the respective license: (A) As an insurance producer,'hmnsed pursuant to Chapter.5 (conirnencing with Section 1621), chapter 6(c6 CIA �awith Section 176b),orPter 8 (commencing with Section 18311of lJiYision 1 of the Insurance Code. (B) Is duly licensed to sell securities. (2) The person or entity meets!the requirements of Section# i 0603 (a)(1)and has a written contractual agreement with another person or entity described lx subsection (a) (1)and the contact clearly and explicitly includes the following. (A)L' 'The rights and obligations between the licensees arising out of the business relationship relating';to insurance or securities transactions. (B) An explicit limitationn on the use of confidential consunner nfarrntion about a consumer to transactions authorized by the contract and permitted pursuant to this ordinance. ( A requirement that transactions.specified in the contract fall within the scope of activities permitted by the licenses of the pies. (b) T'tte restrictions on disclosure and use of con dential Consumer tion,and the requirement for notification and disclosure provided in this ordinance, shall not limit the ability of insurance producers and brokers to respond to written or electronic,including telephone;requests from consumers seeking price quotes on insurance products and services. #x###.070 Administrative Fines (a) In addition to any other remedies''and penalties_provided by law, any financial institution that negligently discloses or shares confidential consumer information in violation of this ordinance shall be liable,irrespective of the amount of damages suffered.by the consumer as a result of that violation,for an administrative fine not to exceed one thousand five hundred dollars($1,500)per violation. P,? Fnyacy.the voters`tum hftp://www.sfgate.corrV4*-bin/article.cg.,.VC/2007J09/`03/ED50507.DTL&typ"rintabli ,0+-SFGAar v www.sfgate.com Return to repru Privacy: the voters' turn Tues day,September 3,2002 02002 San Francisco Chronicle URL:htip://www.sfg4te.cortVcgi-birL/a.rticle.cgi?flte=/chronicle/archive/L2002/09/03/ED50507.DTL FOR THE THIRD straight year,the California Legislature has proved incapable of standing up to the financial-services industry to protect consumer privacy. Californians may have to do it themselves. We have a suggestion for the drafters of a March 2004 ballot, initiative:Keep it strong and simple.Put the burdenon banks,insurance compame s and stock brokerages to get customers' permission before selling or sharing personal financial information. Oh,they will howl. They will spend tens of millions of dollars on phony arguments about how a privacy law would prevent us from using other banksATM machines, getting tailor-made offers for-equity loans, or learning about those!'affinity" credit cards that support your university or earn frequent-flier.miles. The initiative should be drafted to let financial companies do whatever they want with the personal information they compile from your applications,account balances,purchases and Web site visits. They should be able to share the details with their affiliates,other banks, telemarketers,or even used-car dealers who want to know who among,us is spending a lot of money on repairs. They would just need to ask. Today,many companies, including major players in banking and insurance, are not being forthcoming about how they can and do use yourpersonal financial information. Even if they were,your ability to stop them is extremely limited under federal law. The legislative hearings showed how Citigroup, for example,was using its databases..,to serve up custom-filtered "contact lists" to telemarketers and was profiling the elderly,.minorities and less-educated customers for a hard sell on certain insurance policies. Let them make the case that such practices are in your interest. Rest assured: If the burden were on them, the process would be simple, convenient and speedy. The checkoff boxes explaining your options would be in plain English. Your privacy preference would not take up to 90 days to process, as it does now with some banks,because the burden is on you to "opt out." Most important,unless you said otherwise, they could only share information as required to administer your account or provide services you requested. The three-year battle for a financial privacy bill has shown that the stronger the bill, the lower the chances of passage inside the state Capitol. Interestingly,polls show that it's just the opposite with voters. Support rises proportionately I of 2 9/4/2002 10:10 AM ........... ............... Primacy the vbters tum http://www.sfgate.comfcgi-bin/article.cg...ve/2002/U /"03/ED50507.DTL&type=printable with the simplicity and strength of the measure. We have a feeling that the same voter-politician dichotomy will apply to money. The industry invested more,than 10 million in campaign contributions and lobbying fees on Gov'. Cray Davis and 120 legislators --and it got its way.' In North Dakota, supporters of a recent financial-privacy referendum credit heavy industry spending on a doom'.-and-gloom advertising campaign with helping the measure pass with a 74-percent vote. And the ATMmachines still work in Bismarck. California's initiative process was established in 1911 out of frustration that Southern Pacific Railroad and ether powerful interests were dominating Sacramento,thwarting.the public's will. Sound familiar? Legislators will try again next year,but don't hold your breath. Get ready to circulate the petitions. Tomorrow: The roll call on Saturday night's Assembly vote on Sen. Jackie Speier's financial-privacy bill, SB773. OG 2002 San Francisco Chronicle. Page A.- 18 2 of 2 9/4/2002 10:10 AM Financial privacy issues go down fighting /Iwww.sfgateconVcgi-birt/articte.cg...9/011stateO3l5EDT0005.DTL&type-Vrintabli rw www.s-fg—ate.com Return regular vie Financial privacy issues go down fighting LOUISE CHU,Associated:Press Writer Sunday,,-§epternbar 1,..2002 02002 Associated Press URL:kttpk//wwwstate.cortVcgi-bin/arti.Cle.Cgi?file=/D.e.ws/archive/200.2/09/01/stateG3l5EDTO.005.DTL (09-01),130:15 PDT SACRAMENTO(AP) California consumers will not gain any new financial privacy protections this year,despite three different attempts to pass such a bill on the last day ofthe legislative session. A turbulent debate over the issue culminated on the Assembly floor Saturdayas lawmakers first killed a bill by Sen. Jackie Speier,D-Daly City, that would have allowed consumers to prohibit companies from sharing their financial information,��That bill was then amended, passed the Assembly and then slaughtered in the Senate,after Speier called the new version a "sham." The Assembly narrowly voted 34-36 Saturday afternoon to kill Speier's original bill,which was the strictest of the three measures. Shortly afterward,Assemblyman John Dutra,D-Fremont,proposed amendments to the bill, ,which were backed by a coalition of Democrats and Republicans who opposed the previous version.The amendments would give customers theability to prohibit companies from sharing their financial information with non-affili ate companies,while Speier's version would have applied to affiliate companies as well. Dutra said the bill still would have been the strongest privacy law in the country and could have been much stronger if the two had worked together. "Keep in mind,mine got 49 votes (in the Assembly).Hers got 34 (votes)," Dutra said. "Regardless of what she said about how much more beneficial it would have been,it's not beneficial if you can't enact it into law." Speier and consumer activists said the amendments weakened the bill to the point it would not offer consumers enough protection. Dutra previously had plans to introduce an entirely new bill but reportedly had trouble finding a Senate author, forcing him to "hijack" Speier's bill without her approval, With Speier retained as the bill's author, she attempted to remove the bill from the floor, only to have supporters of the new bill counter with a vote to override herrequest. The bill passed the Assembly in a 49-12 vote. Speier,however,.promised to"take it up and kill it after exposing it for what it is.,' She was successful: The bill got just one vote. in a last-ditch effort to get a more stringent bill through,Speier worked with Assemblywoman Jackie Goldberg,D-Los Angeles,to reincarnate her bill in the form of another bill. I oft 9/4/2002 10:11 AM ............................ Ainanclal privkcy issues go dawn fighting http://www.sigate.,popVcgi-b i n/articlexg..9/01/state03 t 5EDT0005,DTL type==printabl( The nervi measure, authored by Goldberg but virtually identical to Speier's bill with some minor amendments, cleared the Senate,,27-10 but was then stuffed in the Assembly's Banking and Finance Committee, where it was never heard. Rosemary Shahan, legislative director of the Consumer Federation of California, said her organization probably won't try to.get a bill past lawmakers next year and will instead try to get a financial privacy initiative on the 2004 ballot. "I think it makes the case for why we need an initiative," Shahan said. "The Legislature has shown itself for three years now that it is incapable of doing what the public wants," Speier vowed to propose more legislation next year,saying,she will "not rest until consumers in this state have the privacy protection that they want." On the Net: Read the bill, SB773 by Speier and AB2347 by Goldberg, at www.le ing fo ca.gov. 02002 Associated Press loft 9/4/2002 10:11 AM Consumer privacy bill dies/Moderate Democrats unite with state GOP http://www.sfgati�.corn/cgi-bin/ar€icle.cg...e/2002/09lillIMN155884.DTL&type=printabi 41,a, www.sfZ—ate.com Return to regular view Consumer privacy bill dies Moderate Democrats unite with state GOP Christian F3erthe[sen.Chronicle staff Wi ter Sund :ptember 1,2002 Q2062 San Francisco Chronicle. URL:ht' ://www.sfgateconi/egi-hinfarticle.cgi?file=/chronicle/archive/2002/0?9/0l/MN155884.D'FL' Sacramento-- For the second year in a row, the state Assembly, led by pro-business Democrats, killed a far-reaching financial privacy measure. Moderate Democrats joined Republicans to defeat the bill on a 34-36 vote,ending what was possibly the most contentiously debated piece of legislation this year. The closely watched political drama pitted consumer advocates against hanks and insurers,' which spent more than$10 million on lobbying and campaign donations. "I will not stop until we have a strong privacy law in effect," said the bill's author, Sen.Jackie Speier, D-Hillsborough. Top Democratic Assembly leaders had blocked a floor debate on the hilt for days.Saturday's vote carne only after!the Senate, using shame and strong-arm tactics, forced the issue'. After defeating the measure,moderate Democrats pushed a weaker version of the privacy bill that Speier said left consumers without adequate protections to block the sharing of their private financial records. But the amended measure appeared to have little chance of passin the Senate,which signaled it had no interest in the bill earlier in the day by endorsing Speier's bill for a second time. Speier said Gov. Gray Davis had actively lobbied against her proposal,despite publicly proclaiming his support for a strong financial privacy bill. She said Davis called one legislator to weigh in against the bill'--at the same time she was in the lawmaker's office. A Davis spokesman was not immediately available for comment late Saturday. Speier said the vote showed that corporate interests continue to hold sway over the Assembly and that moderate Democrats were "playing with the public interest and cashing in on it." On the Assembly floor, Joe Nation,D-San Rafael,urged fellow lawmakers to support Speier's bill,but to little effect. "I think it is the strongest financial privacy bill'in the nation," he said. "The question you have to ask yourself is: Do you support consumer choice or not?" ASSEMBLY SPEAKER SEES GAPS' But Democratic and Republican legislators alike said the measure would'harnl'California's 1 of 3 9/4/2002 10:10 AM Comzurner privacy bill dies/Moderate Denverats€mite''wit4 state GOP http. e.coOcgi-bitVarticle.ir gg..,el2002/09/01/MN155884,DTL&typ.-piintabl, economy and asserted that the measure was loaded with spe, ial- interest protections. Assemblyman Louis J.Papan, D-Millbrae,said the,Bill had."gaping loopholes that do not protect the public." Assembly Speaker Herb Wesson allowed the vote only after state Senate President Pro Tern John Burton,D-San Francisco,appeared to kill one of the speaker's pet bills,a measure to give Hollywood television and movie production companies tax incentives to film in California. Speier's bill, SB773 would have,given Californians,greater control over hove banks,insurance companies,stock brokerages and other,financial services companies use bank balances and spending patterns and other personal financial information. It would have prohibited companies from selling personal data to third parties without first getting a customer's permission in writing. The measure also would have given cons mers;the option of barring institutions from shaving personal information internally with affiliates of the corporation. After Speiees measure failed,Assemblyman John Dutra,D Fremont, introduced amendments to the bill that would require financial institutions to obtain customers'permission before selling their data to outside,non financial companies. The amended bill eliminated controls on how in is shared between different divisions of the sate financial conglomerate. The amended version was denounced by supporters of the original bill as a sham. "This amendment thatpurports to giveL important privacy protections for Californians is a minimal,even arguable protection," said Assemblywoman Hannah-Beth Jackson,D-Santa Barbara.. "This notice is misleading to the public. " MILLION'S SPENT BY OPPONENTS Bay Area lawmakers who voted;against the original bill were Dutra,Papan,Joe Canciamilla, D-Pittsburg,and Lynne C Leach,R-Walnut Creek. Rod Pacheco, Riverside,was the only GOP Assembly member to vote for the measure. Financial institutions that opposed Speer's measure have contributed$4.7 million to the campaigns of lawmakers and Gov. Davis and'have spent more than$5 million on lobbyists. Speier"s bill grew out of an attempt to strengthen federal laws which consumer groups say is too lax and open to abuse. A 1999 federal law reversed Repression-era regulations o the mergers of banks,insurance companies and other financial institutions and required companies to tell consumers they had the option not to have personal information shared with third parties. But consumer advocates say the law leaves consumers powerless to control the trade of certain types of financial information.The burden is on consumers to block the sharing of information, and notices sent by banks have been roundly criticized as intentionally confusing. E-mail Christian Berthelsen at cLberthelsen . Lchrot icle.cvm. 2`-of 3 91412002 1 11;10 All Tho.Sacramento Bee'—sacbeexornFinancial-privacy bill hits major hurdle wysiwyg-1/56/http.//W-ww.sacbee.coWconte...icslv-print(stoTy/4224156p-5245087c.htrnl This story is taken from poiltics at sacbeexom. Financial-privacy bill hits major hurdle But Davis gets a tougher measure on driver's licenses for immigrants. By Kevin Yamarnura and Jim Sanders Bee Staff Writers - (Published September 1, 2002) On a whirlwind final night of session Saturday, state lawmakers blocked a high-profile financial-privacy proposal While they sent other measures on immigrant driver's licenses and hou sing construction defects to Gov. Gray Davis. One of the most heavily lobbied bills of the two-year session, SB 773 would have blocked financial companies from sharing a consumer's personal information without permission in most cases, The measure died last year on the final night of session, but a renewed effort this summer on the part of its author, Sen. Jackie Speier, D-Hillsborough breathed new life into the proposal. On Saturday, the Assembly treated SB 773 like a pingpong ball. In an initial vote, the bill fell short of passage. Then.Assemblyman John Dutra, D-Fremont, hijacked the measure, inserting business-friendly amendments that allowed companies to,share information with related affiliates without requiring a customer's:permission. Dutra and other Assembly lawmakers touted the amended version as still the strongest.privacy measure in the nation, while consumer groups and liberal Democrats charged that the bill had been gutted. The amended bill was on hold in the Assembly late Saturday. "It's been a circus and a charade,"said''a disappointed Speler. "Consumers will continue to be vulnerable in this state." On other key legislation Saturday- *The Senate sent a compromise measure to Davis that would enable as many as one million undocumented immigrants to:obtain California driver's licenses if they pass criminal background checks. Lawmakerspreviously sent a separate proposal:to Davis, but the Democratic governor demanded changes, including a battery of checks to ensure that license recipients are not criminals. After days of negotiating with Davis, senators Saturday approved a second measure that would require license applicants to submit fingerprints that would be-used to determine Zany past criminal involvement. The legislation applies only to undocumented immigrants who are not yet citizens or permanent residents but have filed citizenship papers with the federal government. SB 804 would prohibit the state from issuing licenses to felons or those facing a conviction for serious crimes,such as large drug'transactions or terrorist plots. Proponents assert that issuing driver's licenses would make California streets safer because undocumented immigrants would be able to purchase:insurance and, receive training. Some senators on Saturday anguished over SB 804. While they say it is discriminatory and unfair, they want undocumented imrnIgrants to obtain in licenses. Sen. Deborah Ortiz, D-Sacramento, said SB 804 treats immigrants"as second-class citizens. But right now, they're not even second-class citizens." 1 of 3 9/4/2002 10:03 AM .................... ................................... .................... . ............. ............................................... The Sacramento Bee—sacbee.com Financial-privacy bill hits majorhusdie, wysiwyg:H56/http:l/www.sacbee.corn/conte...ics/v-print/story/4224156p�5245087c.htrw The Senatepassed the bill on a 25-8 vote to send it to Davis, whOhas no stated position on the bill. The Senate passed a last-minute measure exemptingsmall-scalecar dealers --including the bill's author, Sen. Maurice Johannessen from a new law1hat requiresJdealers to post more expensive surety bonds. The bill, SS 2073, previouslyset up a grant for short-line railroads.But Democratic lawmakers Wednesday waived deadline rules allowing Johannessen to gut the bill and insert the exemption. Jo ha n nessen provided the lone Repubi ican vote for the budget in June. The Redding lawmaker said the increased bond requirement was unfair to small-car hobbyists, such as himself, whocollect and purchase limited numbers of vehicles each::year. Critics called the last-minute move a special-interest exemption. The Senate voted 24-5 in favor of the measure. A long-discussed bill that could spark housing construction went to Davis,on Saturday. SB 800 by Senate leader John Burton, D-San Francisco,and Wesson, D-Los Angeles, enables builders to fix construction defects before homeowners.can sue. The bill is intended to encourage more insurers to cover builders of.apartments in California. The Senate passed the measure on a 33-0 vote. Drivers who have,carried insurance for at least three,years would receive a.policy,discount under a bill sent to the governor, but consumer groups say that it would unfairly burden,the poor., State Insurance Commissioner Harry Low plans to implement rules.that would let insurers consider a driver's insurance past-- dubbed "persistence" -- only when customers renew their policy with the same company. SB:689 would expand that policy by enabling drivers,to receive a:persistence discount from any insurer,. not just their current one. Proponents say the measure wouldincrease competition:and lower prices for most drivers. But Doug Heller, of the Foundation for Taxpayer and Consumer Rights,said it would,create another barrier to low-income drivees.,seeking insurance for the first time. He said c6nipa6ies.would,offset discounts to long-term policyholders by charging:higher rates for drivers'who have never had coverage. SB 689 passed the Senate.30-0. AB 669, allowing creation of a 311 non-em&gency telephone system, was sent to the governor. The Assembly voted 68-7 to concur in amendments. The measure, by Assemblyman Robert Hertzberg, D-Sherman Oaks,I.would permit local governments to operate such a phone system in hopes of reducing 911 calls for non-emergency police, fire and other services. Hertzberg said 20 percent to 80 percent of calls received by 911 systems are not emergencies. AB 2240, givingcourts greater latitude to overturn paternity judgments, was sent to the governor. The Assembly voted 46-16 to concur in amendments. The bill sets conditions under,which a man who did not initially challenge an allegation of paternity, but later discovered he didnot father the child, could challenge a judge t paternity order and sue the biological:father for financial:relief. Regardless Of DNA.results, however, a court would not be obligated to overturn a paternity judgment if doing so would not be in a child's best interest, 2of3 9/4/2002 10:03 AM ...... .... ..... ...................................... The Sacramento heel--sacbee.com—Financial-privacy bill hits major hurdle wysiwyg:/J56/htcp://�www.saebee.coni/conte...icsYwpribt/story14224156p-524508'7c.htmI * A9 2147,;proposing tax credits designed to encourage Hollywood studios to film in California, died Saturday in the Senate Appropriations Committee. The measure would have;given studies a tax credit of lap to 15 percent for wages paid to film a motion picture, excluding salaries over $200;000. * AB 634, regarding mandatory kindergarten attendance, was sent to the governor.The Assembly concurred in amendments, 41-20. The legislation would prohibit children between the ages of'5 and 6 from withdrawing from kindergarten if they have attended classes for at least'30 days during the school year. Currently, children are not compelled to attend classes until the first grade. Many parents send their kindergarten-age children to school occasionally-- not daily -- wh'ich can confuse there and disrupt the pace of education,,AB 634's supporters say. About the Writer --------------------------- The Bee's Kevin Yamamura can be reached at(916)'326-5542 or kcyamam€ra0sac ".com. Go to : Sacbee/ Bar*to story Contact t_isfl=eedback i Privacy Polley I Terms of Use News l Snorts t Business i Politics i ni n'i Entertain rpt nt I Lifestyle i Tr'v l i ftmgn Qm- 10assifieds.fH.pmes I l h' in H.�.kp k m k Newsletters l Sb MaI2.I Subscribe to the'print Edition I Tr fft I Wireless!Deliyery About-Us i Advertise in The Bee iAdvertlse Online I Q=t Cir culiation Customer Service I Event [Sacramento Bee web sites MovleClub.com i 5zt-e icom i Sacramento.com This article is protected by copyright and should not be printed or distributed for anything except personal use. The Sacramento Bee,2100 Q St., P.O. Box 15779,Sacramento,CA 95852' Phone.,(916)321-1000 Copyright 0 The Sacramento Bee/ver.4 3 of 3 9/4/2002 10:03'AM ............... tramsta va CY b1i e h.RIOA)l C le, Mod6t0d 00MO Upr ASSEMBLY From Page I C,olnparing privacy proposals �A measure awaiting a vote in the, S8771 Requires annual privacy .the bill than accept them. Assembly,SB773,would strength- notices,one for state law and one Privacy 'They would cut the heart of enjinancial privacy laws in Califor- for federal,in clear language,so the,protections were trying to n io...Moderate Assembly0emocrats customers can decide their level of provide for the consumers out of have proposed changes.Here is a privacy protection.Large compa- the bill," she said. "it really just comparison of the competing pro- nibs would have to provide a post- throws us back into the arms of p0a& age-paid,self-addressed envelope the federal (law) that everyone S8113:Prohibits personal infor- with the notices. now knows is not worth the paper motion,such as bank balances and Amendments,.State and federal K.RIC hosta :by it's printed on." spending habits,from being sold to notices would be combined in one Ibe amendments are expected a third-pa rty marketing company, form.Financial companies would to be introduced when SB773 is unless the consumer gives permis- have more leeway with the lan- V'r, brought up for Poor debate,possi- sfbh. quageand presentation of the no o r Dem c dobly as early as today.Speie?s bill Amendments:Nochange. tires—including removing strong, failed in the Assembly last Sep- 58773-Allows bank and incur- clear Language and replacing it with Moderates insist temper after 21 members de- once customers to block a.large more ambiguous wording.Banks glorne rate from clihed to vote. co n sharing person would,not necessarily have to pro al information among affiliated vide postage-paid return enve- on amendments Financial companies that op- companies ompanies. lopes. pose the bill have donated $4.7 Amendments:Customers would 58773.Exempts customers of Speier opposes million to lawmakers and Gov. not be able to block a conglomer- USAA,the insurance company that Gray Davis and are mounting an ate from sharing information with serves the military,and"integrated' By Christian Berthelsen intense lobbying effort to defeat an affiliate that offers similar servic- financlat services companies such CHRONICLE STAFF WRITER the bill before lawmakers adjourn esor products,fAn affiliate is de- as Fidelity.and American Express. their session on Saturday. finW as a company at least partially Amendments:Deletes exemp- SACRAMENTO-The fate of a Chief among the amendments con troiled by another company tion. sweeping financial privacy bill is one that would not allow con. through the ownership of stock or -Mote information,including the proposed amendment would clarity www.leginfoxa.g pro election of directors.)Another votes and analyses,at Search for rn was in the hands of moderate As- suers to stop financial conglom- ov. sembly Democrats who warned erates from sharing private finan� P the bill to allow sharing of informa. 56773 under"Bill Information:"The Tuesday they will withhold sup- cial information with affiliates tion for"servicing"customers,but bill's authoris state Sen.Jackie port unless ch anges are"consid- that offer similar products, would continue to restrict sharing Speier,D-Hillsborough. ered" that consumer advocates Consumer groups say the defi- for rnarketing purposes, claim would water down the mea- niticin, supplied: in the amend- sure. merit is so broad that virtually any The stalemate is holding up financial service would be fair said. .the final vote on the Financial game, and information sharing from sharing information about information Privacy Act, which would be uncontrolled as a result. Another amendment would ex- them with other entities under em t the sharing of names and would give consumers greater They p 9 the same corporate umbrella. Say it would also give huge addresses of custom s saying control over how information advantages to companies,freeing thli (,do or 09 Another amendment. would .not constitute confiden- loosen restrictions on the ]an- about them is,used by financial them to share information while tial consumer information." Still guage and presentation financial institutions for marketing purpos- hampering small operations that another would remove the actor- companies'must use to inform e& must sign joint marketing agree- ney general's Oversight in approv- consumers of their privacy rights. Assemblyman John Dutra, D- ments in order to soil,their prod- al of the notices. Fremont, said the amendments ucts, are intended as a framework for Citigioup, for example, has The amendments were provid. E-mail Christian Berthelsen at negotiations with the�bill's au more than 1,800 affiliates and ed to Assembly Speaker Herb lcbc'ythelseh@sfchroni,-Ie.corn. ,thor, state Sen.Jackie Speier,D- subsidiaries. Under current Wesson in,the hopes:of facilitat- IbIlsborough. law, ink,a meeting with Speiet.Steve Dutra made it Clear,however any Citigroup entity— anything Mavigho,a spokesman for Davis, from its auto.leasing division, to said e that many of the members he its Travelers insurance ..th governor's office had of.- . group to fered "a couple' of the amend- speaks for would not support the its Mexican banking operation� measure without the cha'49111- ments to the moderate Democrats can.share information about a in response to calls from.them "They really feel the bill is not customer with any other affiliate. asking how Davis fell about the cooked and needs a little more GE has hundreds of affiliates arid bill. work," he said, adding later-, subsidiaries that offer everything 'There are at least 16 members from power mortgages to dental 'We're not trying to 'kill the who, if she doesn't consider the plan& bill,"he said. amendments,will not vote for the Dutra said a bank's mortgage As the bill is written, banks, bill," lending unit should be able to brokerages and insurancecompa- Spejer said Tuesday that the share information about custom- nies would have to seek,and ob- changes would gut the bill and ers with carlending units.Restric- taita,.:their customers'.permission that she would rather Withdraw tions on sharing between diver- before selling information about ASSEMBLY'Page A]3 Col,I gent divisions such as stock them to other companies, It brokerages and insurance com.pa- would also allow consumers to nies would still be pr hibited,he prohibit financial institutions ............. ons�e r � A session. neer end. borough,and Assemblytrtan Joe Nation, D-Marin, unv fled a 1ltdV�fllaS SE ll1Y1g = week ago,is the rallying cry for oridonM6011 heavy-handed tactics by prop°` nents and opponents alike. shablig Wiffi ri1IG � f}Tr On Monday,supporters of the By Andrew Lamar "' bill handed reporters copies of r€ s FrA�F WWMR testimony given by former Citi- SACRANI 1 To --� As law Cat�mttl� putt a group employees to a Federal makers attempt to wrap up their rade Commission proceeding. oration work for the year,a measure that can prevent financial companies they told how the corp mers pits banks and insurance corn- hag sharing their information to used info r theist into buying fi- p ies against consumer and p with.other firms. lacy advoca#es has spurred air a 1a#es#versii n of 5B7 See pRTVACY,Back Page all-out lobbying battle,that will vvl'tich Sen.Jackie peier,II-Hills- determine whether consumers � ' 'Tit auttendments, As it is now,the tactics.The suggestion is being C landmark legislation wound pre made that the bill in its current e d vent financial companies from form is perfect incl it is not." FlZ£)lt PAGE l selling consumer information to Speier believes the changes nand l services they didn't need. marketing firms or,sharing it proposed by Dutra would gut the Meanwhile;opponents took out with their affiliates. bill, her staff said. a full page ail in the front section The provision that would pro- To make their case, 5peier's of the Sacramento Bee to assail Mbit the information from being allies provided the sworn testi used by all companies that fall un- moray,of former employees of a the measure as full of loopholes der an entity'scorporate orporate umbrella Citigroup financial servicesaf- and not in the public interest. hasdrawn loud complaints from filiatle in a case brought by the j Speier's legislation is one of the financial services industry. Federal Trade Commission dozens of controversial matters lawmakers will decide in the fi- nalBanks and insurance corr�pa- against the corporation for previa- lawma days of this year's session, ams say such sharing is interwo- tory business practices. which is scheduled to end at mid- vera into their business practices Gail Kubiniec, who worked right Saturday.And lige many of and enhances customer service. until Feb. 22 2n41,'for CitiFi thehotly debated measures're- Dutra, however, said the re- nancial in Tonawanda,N.Y.,tes- maining,SB773 is still up in the strictions of SB773 should be tified she wound use infornitation air. broadened so companies can on consumers to oversell them. The bill has cleared two As- share information with other,of 9,1 and other employees would sembly policy,committees and is (;!;ares if they are `vertically in- often determine hove much in- awaking a floor vote But the t ea- tegrated,"or all in the same type suranee could be sold to a bar- sre's backer conceded Monday of business,such as insurance. rower based on the borrower's they do not have enough support "finder Dutra's°;alternative,an occupation, race,age acrd edu- to pass it in its current forrrv. ' auto insur=ance firm could send cation level,"Kubiniec said. , A group of moderate Democ- consumer information to a suer- "If someone appeared unedu- rats,led in part by Assemblyman sidiary,without the consumer's cated,''inarticulate,was a minority John Dutra,D-Fremont,say they consent,if that company offered; or was particularly old or young, won't'vote for the legislation another type of insurance,such 1 would try to include all the cov- without changes.But,Speier re- as life insurance. erages CitiFinancial offered. fuses to consider amendments. The Dutra plan would allow The more gullible the con- Dutra and'Assemblyman;toe consumers to block any.of their sumer appeared, the more cov- f Cancia itla,D-Antioch,are two information Eyeing relayed to an-' erages l would try to include in of the Democrats opposed to other company for marketing this loan," SB773. Cancamilla'called it a purposes. That's an approach "bad bill'that needs substantial backed by Cancirmlla as well. Andrew LaMar covers state changes and therefore should be "Jackie (Speier) is,just plain government.(teach frim left for next year, trying,to ramrod this through...,"' at 916-441-2101 or alamar@cc- Uutra has suggested five Dut said."People don't like her times.com. 1 Sharing is a right Editor-Everyday,it seems,my Chronicle is littered with unso- licited junk articles and!editorials proclaiming the virtues of the fi- nancial privacy bill SB733. As a customer,I ask you to please stop. News lflash. It is not' wrong, to share information. Quite the con- trary, our Constitution grantsus the right to share information. Since'sharing infor ation is a right,any restrictions on informa- tion sharing must be made not;by blanket legislative prohibitions, but by voluntary contracts between individuals.Scrupulous businesses already offer an easy way to enter into reasonable,privacy contracts. If a particular consumer wants ad- ditional restrictions, she is free to negotiate these before giving away her personal information. Not convenient enough for you?Well,tough luck.America is a country,not a convenience shop. JOSEPH KENT Burlingame Bach SB773 Editor—The amount of money the financial corporations are will- ing to spend to defeat state Sen. Jackie Speier's bill,SB773,tells you that what these corporations want will most certainly not benefit the consumer. Get off your duffs and support Sen.Speier's bill. GAIL HENIGMAN San'Francisco w 2,11 : ° ' Cs:�` ` 41 ai •tet � "�,,� �_� '; ,�. .4 U 0 j O� a`a ,to sw C a ° 41 ca Q4. . Im, 20 � `� y } •—' ool �' ' .. I�j 72 ° i .w cs a4 m n a 3 Chronicle Crap#rie ddl dl � tr es de0 l► PRIVACY tion by some lawmakers that con- From Page A17 sumer privacy was an issue impor- tant only to middle. and The measure's backers said the upper-class people. ads:misrepresent the tenets of theer�u practices of the bill: large banks are particularly aimed We'll see how effective it is," at those of lesser income," said said Shelly;Curran,'a lobbyist,for Richard lfolober,exeeutivedirec consumersUnion.. "They've de-cided to,spend the money doing ' this; and it's just going to show 1 ,eprat ry j there is a lot of money behind the people who don't want to see this pradki s ofthe measure passed." Speier's bill would force Finan- la �bdr&S are tial institutions to obtain their all F eats' permission before sellingatlrdxrl}�aimed ' personal financial information about them � � lesser~ Consumer groups say they ex- pect an attempt to gu# the mea- ZC"o17er>r sure on the Assembly flog by amending it tolet financial con- RlCkARDHOLOBER glornerat.es i share information ConsuwrFderationofCalifornia' without being blocked by their customers,as long as the informa- tion stays within the family of—'tor of the Consumer federation companies offering the -same of California. product. Holober released, depositions Efforts to pass at least five fc- from a former manager of a Citi- nancial privacy measures have Financial branch in New,York failed over the year,and SpeieeS who said:"lt was particularly easy bill did not win enough voles to to sell insurance to my Spanish pass out of the Assembly in Sep- speaking customers because they tember.Speier has resurrected the were not financaay savvy," bill, and lawmakers have untilSupporters of theprivacy mea- Saturday to take final action on it. sure cried lawmakers to set aside Both advocates a nd opponentsany personal differences they may declined on Monday to provide have with the author.Some mod- assessments of how they think.4 erste Democrats have said they vote would go,although a hron- were threatened politically when icle' nose count found it may the bill' reached the assembly come up six votes short of the floor last year. minimum needed for passage. Consumer and: ,labor groups E-mail Christian Berthelsen at said Monday there is a mispercep- ebertheisen@sfclrronicle:corn. THE VOICE, OF THE WEST EDITORIALS All in the family? 0 NE OF the main arguments over them by corporations is enough to stop against proposed financial-priva- them: from doing the right thing," Camejo cy legislation is that it would be said Monday. unfair to restrict information Camejo is partially right.There are many sharing within a family of companies. goodpeople in the California Legislature. This point deserves a;closer look. But personal pettiness also has a way of I Citigroup, which has been lobbying ag- creeping into the process-as has been the gressively and.funneling contributions to case with SB773. legislators and Gov. Gray Davis to defeat Some Assembly members are still bristling SB773,has more than 1,800 affiliates.' at the way Speier and several other women The question to ask is When you get;a Visa senators bolted onto the Assembly floor last card from Citibank,do you assume you have September to convince wavering lawmakers granted it permission to share your personal to support SB773.By all accounts,they were { financial information - from your applica- forceful and persistent,though apparently not I tion, your transactions, your Web site visits persuasive enough to beep 22 members from and more—with 1,800 compa- skipping the vote. nies selling myriad products un- 'T11 tell you, if this bill der a broad corporate umbrella? Opponents may had a different author, it Davis addressed this'issue` would pass.l'll tell you that directly in a June 8,2001 meet try to blow a straight up," Assemblyman ing with The Chronicle's edi- Dennis Cardoza,D-Merced, torial board. loophole into told a Chronicle reporter "I believe a family of,com over the weekend. panies can share information if . r 1VQCy32l1. Several points must be you are clearly presented made.First of all'this is not like in the first paragraph of a a resolution to honor Jackie letter —with the opportunity to'opt out,'" Speier as Ms.Congeniality.This is about the said Davis. "In'other words, you should be most important consumer-protection meas able to say-`Wells Fargo,I bank with you,but ure of the session, 1 do not want Wells Fargo Real Estate or There is also a decidedly sexist overtone to Wells Fargo Title or whatever,..to have the the aft-repeated descriptions of"senators in information I give you,'That should be in the high heels"'confronting Assembly members. first paragraph,in big bold print" In other cont&-ts,assertiveness at the critical The governor's call for clear disclosure and moment—'a willingness to ruffle feathers- customer choice is reflected in the version of is praised as leadership. SB773(by Sen.Jackie Speier,D-Hillsborough) .Besides,the two-year history of financial pending on the Assembly floor.The bill,co privacy legislation in the'state Capitol;sug authored by Assemblyman Joe Nation,D-San gests that a low-key approach favors the 200 Rafael,would put a higher threshold on the:. lobbyists working the hallways on behalf of sharing':of information with telemarketers companies that have contributed $4.7 mil and other unaffiliated companies. In those lion to Davis and key legislators. Just ask cases,the burden would be on the bank or in then-Assemblywoman Sheila Kuehl, whose' surer to get customer permission. financial-privacy bill was quietly killed in A group of self-proclaimed"Business De committee in May 2000;or Assemblywoman mocrats,"has been trying to create an error- Hannah-Beth Jackson,whose bill was reject- mous loophole in Speer's bill by lifting any ed with little fanfare in May 2001. restrictions on information sharing among California legislators need to be remind- affiliates,The group may try to add such aned—straight up-to pass a financial-privacy amendment when SB773 comes up for de` bill'before adjourning this week. bate,possibly as early as today.The loophole --- should be rejected. Express your views The vote on the bill is expected to be ex- tremely close,even though Democrats occu- Potentially key Assembly Democrats on py 50 of 80 seats in the Assembly.Davis,who this issue include Lou Papan of Millbrae(e- called for strong financial privacy legislation mail:lou.papan0assembty ca.gov),who in his State of the State address,has yet to as, wants the bill pulled back to his Banking sect an real leadership to help move such a and Finance Committee;John Dutra of Fre- monty p p (assembiymember dutrafassem- bill to his desk. bly.ca.gov),who wants the restrictions on Peter Camejo,the Green Party candidate affiliate sharing removed from SB773;and for governor and a supporter'of SB773,sug nonvoters from September 2001—in- gested the difficulty of passing legislation to eluding Joe Canciamilla of Pittsburg(as- deprive the financial-services industry of"a semblymembercanclamiilla0assembiy.ca .gov),Barbara Matthews of Tracy(assem- license to solicit you"was symptomatic of a blymember.matthows@assembly.ca.gov) larger problem in Sacramento. and Simon Salinas of Salinas(simon.sall- "Even though there are many good peo- nasOasmca.gov).Contact information for ple in the Legislature,Republicans and De- other Assembly members can be found at mocrats, the pressure and the domination www.assembly.ca.gov. f tD CM tz ,-•� �M�. �,,�`"'� � ` ��,.� � ��' � �; .R9 R-5 ° r o ,�• lb d ro CD CA U� r*r5 tJ • -. Ss� CInt O'C? C tis' C7 tD C3 A> j rn rn ro � Cs� 'i ru � t� coo�°' ' �•• e� � '� � ��t � 1� CDIA why t:r'`. " jt ,� on 00 " - eb �* �n crm et ° ° th ` c) � 0TN, Vic : . " � +� „.. tai � sem • ' '= c. C ro om c� 5 5 ra ra M n� co z; Pet '� �+ro*�+ y ,t1s � � ��` •+, G'+� abs � fo rp p� ct Ca et dc �, q "HS , vz p> rs , G�- Gxi� p n � nth rtOn M to 0 Ol ID CP 10 p"LfCA to C6 rtr O ,.. ri� h Cts C7 rs {3 P}P-'-4 -4 O + ft w• + n Ll � 4 1 a p oco h o.° `° /} r PAGE 13 C/Lj)C 1 Saturday, a�j �mttll>2002 Awk CA sATvAY,;XucusT za,roar set i measure n vote �1 *A advances toward b te Asse ly V-0 , %, 7 Measure 0, IVACY From Pag A 3 "I'm I m very hopeful it =, A 'company could, for example, » Panel LOKs Speier's bill, create a list of seniors with high will pass the floor. equity in their homes and high hostilekills amendment, BETT debt,and then sell them a consoli- ELLENman,o-San dation loan at inflated interest assembiyluomatl,D`San Leandro By Robert S;et'Taciny rates. CHRONICLE SACRAMENTO BUREAU, Speier acknowledged in teW- mony before the Judiciary Corn- small operations that must sign SACRAMENTO_clearing one of the last hurdles mittee that her bill is based on joint marketing agreements in or- for a financial-privacy measure, a key Assembly anecdotal evidence and a fear of der to sell their products. committee narrowly approved the landmark bill what could happen. She said the Speier did gain the support of Friday and:readiedit for a final showdown next measure is not just about prevent- one Republican this week,Assem- week, ing junk mail and telemarketing blyman Rod Pacheco, R-River- With Assembly and Senate Democratic leaders calls, but "the insidious practice side,who is leaving this year be. blessing the measure behind:the scenes,the-privacy of profiling"customers and then cause of term limits.Pacheco said bill was approved by the Assembly Judiciary Com- selling or trading the information, he has been working with Speier mittee with only a handful of moderate Democrats Speier was followed by Steve for month& refusing to vote. Blackledge with the California "We need to get something Now it appears that state'Sen. Jackie Speier,D- Public Interest Research Group, done on this issue,"Pacheco said, Hillsborough,has one last hurdle:passage in the full who pulled out a federal list of "and coming from my back. Assembly before the Legislature adjourns Aug. 31. affiliates for Citgroup, the huge ground as a prosecutor, it deals The bill failed in the Assembly in September after 21 conglomerate based in New York, with identity theft and that is why members declined to vote, but over the past year saying that all 1,824 affiliates are it's very important to me.. Speier has picked up support. allowed under federal law to Gov. Gray Davis is still unde- By one count, 35 to 38 Assembly members'back share information without per- tided on the Speier measure,his mission. spokesman said Friday.Banks and her bill,but she needs 41 for pas-' The measure was approved 8-3 insurance companies till fiercely sage b the Assembly judiciary Com- "I'm very hopeful it will pass y Y J � oppose the measure and have the floor," said Assemblywoman mittee,with Democrats John Du- contributed $100;1100 to Davis' Ellen Corbett, D-Scan Leandro, tra,D-Fremont,and Juan Vargas, campaign in recent weeks.In the chairwoman of the Judiciary D-San Diego,declining to vote, past year, those same interests The Judiciary Committee suc- have given $4.7 million to the Committee. ` privacy issue ceeded Friday in removing a hos- Legislature and Davis. has been debaatedced for hours and file amendment that had been in. All sides expect that Speier's hours,and l really do believe that � members have heard from their serted in Speier's measure in the measure, if approved by Davis, constituents and they know most Jackie Speier Assembly Banking and Finance will end up in court.Banking in- I Committee, which narrowly ap. terest say'the people support being able to con- roved the measure Wednesday. federal air Credit Re violates the trol how their private information is used. p Reporting Act, The Speier measure came about because the The hostile amendment would which prohibits laws that block federal government in 1999:allowed financial com- have gutted a key portion of the the sharing of information be- panies to expand their operations into new areas. bill and allowed insurance com tween affiliates. State Farm Insurance,for example,is now starting a panies and banks to share infer- And the insurance industry be- up State Farm Bank—and both are expected to rely mation on their customers with lieves the bill would force insurers on the vast amounts of personal information about affiliates 'offering similar ;.prod- to violate other laws that require their customers to market their products. u • them to fully inform their cus- Speiees=measure would allow a customer to pro- Insurance companies in Partic- tomers about all available prod- hibit the exchange Of personal information between ular wanted the amendment be- acts so they don't get caught un- affiliates of a large conglomerate like Citibank or cause they are required to sepa- der-insured. Bank of America.Information kept on customers can rate into affiliates under "If you check the `maximum include analyses of spending habits,debt balances, decades-old law.They argue that privacy'box,we cannot offer you private phone numbers and credit histories. ,, Speier's measure would allow the umbrella policy,which is un Federal law already prohibits the selling or trad- some customers to block the shar- der a separate affiliate,"said Dan ing of credit card numbers.But some companies that ing of important information Dumnoyer,president of the Per hawk products on the phone have agreements with even among a family of compa- sonal Insurance Federation of credit carni companies that allow a consumer's ac nies offering the same product. California."If someone slips and count to be charged automatically. But consumer groups said the falls and you're exposed,:you're Speier's measure would prohibit credit card com- amendment would have given a going to sue us for not letting you parties or banks from supplying a potential list of tremendous advantage to huge know about the umbrella policy." customers to these outside marketing companies if conglomerates such as Allstate or. they are selling a nonfinancial product like a cruise Citigroup,freeing them to share E-mail Robert Salladay at vacation or aluminum siding. information while hampering rsalladay@sfchromcle.com. Speier and consumer groups argue that private information is flowing ton freely and allows un- scrupulous companies to build profiles on customers and then sell them products they don't need or want loPRIVACY:Page AIS Cot.'i 1\ THE VOICE .OF THE WEST EDITOR I A LS 4 Privacy brevival BILL to give Californians more accounts into high-risk investments being control over their personal financial pushed by its affiliates. Consumer groups information was strengthened and point out that these practices are extremely dif- passedby the Assembly Judiciary ficult to track and prosecute,especially since a Committee on Friday, but it remains a long 1999 federal law gave banks,insurance com- way from'a done deal. panies and stock brokerages new freedom to The financial privacy bill, SB773 by Sen. merge and there were no restrictions on infor- Jackie Speier anti Assemblyman Joe Nation, mation sharing within rapidly expanding fam- still must make it off the Assembly floor,where ilies of companies. it stalled last September. Also, Gov. Gray Another concern is the way less-sophisti- Davis,who has received a six-figure flood of fi- cated customers are sometimes"steered" by nancial-services industry',contributions in re- companies to an affiliate's high-rate "sub- cent weeks, has not indicated'whether he prime" mortgages,;even though they may would sign or veto the bill. qualify for conventional leans. Again, cus- Banking, insurance and brokerage lobby- tamers'financial histories can readily identify ists have mounted a full-court press against those who would be most susceptible to a pitch SB773,"I've never seen anything like this ... for a lousy deal. never,"Speier said Friday. Under SB773, a bank In the Assembly,one of the would have to obtain cus- measure's barriers remains theSer�dte Bill 73 tomer permission before misperception among some sharing sensitive personal in- rural and Southern California ClearS jUd iCIipy formation with a nonfinancial Democrats that the selling or company. For the affluent, sharing of personal financial Committee. the current free flow of infor- information is an"elite issue" mation can be an annoyance. of concern only to people who For people on fixed or meager are being bugged by telernarketers in their incomes,it can be a matter of exploitation. comfortable homes during dinner hour. "It is just'wrong'to characterize this as a The reality is, the most insidious known wealthy person's issue,"said Shelley,Curran,a abuses of financial data involve the working lobbyist for Consumers Union poor and the elderly. The Speier-Nation bill now awaits action For example,U.S.Bancorp of Minneapo- on the Assembly floor,where some members lis paid a$3 million settlement after alleged- have a bad habit of not voting on tough issues ly;;providing everything from account bal- —a practice known as"taking a walk."In a dis- ances to Social Security numbers to a tele- turbing portent of what may ahead,Assem- marketer that was peddling $$9.95-a year blyman John Dutra,D-Fremont,who had sup- dental plans. The targets of this marketing ported a stronger version of SB773'last Sep- campaign were offered' 30-day free trials. tember,did not vote on the bill in the judicia- What they were not told is that the market- ry Committee on Friday.(His e-mail address is ing firm had the ability to automatically assemblymember.dutra@assembly.ca.gov).' draw the fees from the credit card or check- It would be fitting for California to become ing account of unwitting"customers" at the the first state in the nation to seize the oppor- end of the 30 days. tunity offered by Congress to exceed the weak The important lesson is that this 'scam privacy rules in the federal Financial Modern- could be prosecuted only because the infor- ization Act of 1999. mation sharing violated;the bank's publicly This is the state that established privacy as declared privacy policy. an inalienable right in its constitution.Few as- In 1997, NationsBank:was fined nearly$7 pects'of our lives are personal as our family million by the U.S. Securities and Exchange finances. Assembly members should be en- Commission for steering many of its cus- couraged by voters who care about privacy to tomers—mostly elderly from stable savings pass the Speier-Nation bill. NW It WKS Here's how SB773 compares with current federal law in giving consumers control of their personal financial in- formation. IIF a frank or insurance comparxy walft tos S8773 Current law •Sell account balances,loan amounts,spending profiles or Opt in Opt out other personal financial information to a third party. w.,.. ... ......... ......... ...................... a Share custQtner information Opt out No opt with one its ahliates. ......- ...... .. .... ... ....... ...................................._.... ...... ......................... .. ... . *Share sensitive customer information with outside companies Opt out No opt that are engaged in a joint marketing agreement" with a financial'institution. ........ . ...,. .., . ............................... .. .............................._ Requires clear notice,bt plain English,so customer knows how a Yes No company Plans to share information and the customer's fight to stop It DEFINITIFONS ■Optlln:Companies must obtain customer permission first. •Optout:Selling or sharing OK'unless customer objects •No opt:No restrictions. THE KEY VOTES ■A stronger version of 587 73 stated on the Assembly floor on Sept 14,2001 when it failed to gain the required 41 votes.32 voted yes,26 voted no and 22 did not vote. a Among the 2001 nonvoters,Joe Nation,D-San Rafael,has worked with Speier to develop the current version of SB773 bill and Rebecca Cohn,D-Saratoga,Rod Pacheco,R-Riverside,and Helen Thomson,D- Davis,have declared their support. a These Assembly members failed to vote on SB773 when it reached the floor last year, Sam Aanestad R-Grass Valley Marco l:irebaugh D-Los Angeles Rod Pacheco R-Riverside ' Thomas Calderon D-Nlontebeito € Dario 1Frommer D-Los Feliz Simon Salinas D-Salinas Joe Canciam la D'-Pittsburg Jerome Horton D-Inglewood � .duan Vargas D-San Diego Tony Cardenas D-Sylmar Jay La Suer R-La Mesa : Raderiek Wright'D-Los Angeles Stennis Cardoza -Merced ; Barbara Matthews' D-Tracy I Charlene'Zonal R-Poway Ed Chavez D-La Puente € Glorla Negrete Mcleod D-Chino Lou Correa b-Anaheim Jenny Oropeza D'-Long Beact' You can get e-mail addresses,phone numbers and other contact information at www.assembly.ca.gov and clicking on`member directory." frattriloto e)rouidt Fighting for privacy Editor — Thank you for sup- porting SR773 and the "opt-in" standard for financial firms to share customer information (Edi- torial, "Restore the privacy bill," Aug.22).My own experience with Wells Fargo Bank's"opt out"poli- cy -- requiring me to instruct them not to share information -- illustrates the problem with that approach. First,I had to give them my So- cial Security number twice -- once to the automated system in order to speak to a person and then to the person because the comput- er doesn't always register the full number as keyed in.Then I had to answer a series of questions specif- ically opting out of every single possible.level of information shar- ing. Finally, I wastold that my re- quest had been entered into the system but there is a processing time of 60 days.I can only assume that my request triggers two months of intense information sharing within Wells Fargo. The Assembly needs to pass the privacy bill and, for my money, Lou Papan can't retire fast enough. NIELS ERICH San Francisco ...........