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Home My WebLink AboutMINUTES - 09092003 - C.50 TO: BOARD OF SUPERVISORS .......... s?� Contra ., FROM: Silvano B. Marchesi, County Counsel �r Costa DATE: September 9, 2003 SUBJECT: Ordinance Regulating Disclosure of County Confidential Consumer Information by Financial Institutions SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: INTRODUCE ordinance amending Chapter 518-4 of the County Ordinance Code and amending Ordinance No. 2002-44, regulating disclosure of confidential consumer information by financial institutions, WAIVE reading, and FIX September 16, 2003 as the date for adoption. BACKGROUND: On September 24, 2002, the Board of Supervisors unanimously adopted Ordinance No. 2002-30, adding Chapter 518-4 to the County Ordinance Code, regulating disclosure of confidential consumer information by financial institutions. On November 5, 2002, the Board of Supervisors unanimously adopted Ordinance No. 2002-44, which amended the effective date of Ordinance No. 2002-30 to September 1, 2003, On February 16, 2003, the Board of Supervisors unanimously adopted Ordinance No. 2003-03, to clarify the manner and frequency with which consumer notices must be sent and to correct typographical errors. On August 11, 2003, the United States District Court issued a final judgment in Bank of America, N.A., et al. v. City of DDjy City, et al., which implemented the Court's July 29, 2003 order on the parties' cross-motions for summary judgment, and which directed the involved jurisdictions to amend their respective financial privacy ordinances to comply with that order to remove restrictions on the sharing of information among affiliates. The Court also stayed the effective date of the ordinances until 60 days after the July 29, 2003 order, making the current effective date September 27, 2003. On August 26, 2003, Governor Davis signed Senate Bill ("SB") 1, which adds consumer financial privacy protections to the California Financial Code, and which expressly preempts local ordinances. SB1 becomes effective July 1, 2004. The Court's August 11, 2003 judgment requires that Contra Costa's financial privacy ordinance be amended, and this ordinance accomplishes the required amendment. Delaying the effective date of the ordinance to track SB1 will enable time for clarification of issues regarding any appeal of the Court's decision regarding the local ordinances as well as the applicability and pre-emptive effect of SB1 on the local ordinances. FISCAL IMPACT: None. CONTINUED ON ATTACHMENT: �`tES SIGNATURE: 1 ---------------------------------—------- ---- s.,-' ECOMMENDATION OF COUNTYADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE' APPROVE OTHER SIGNATURE( ---------------- - _ »�:> - TION OF -----------------_------------------- -- ------------ -- --_-- -- ------- -A BOARD ON-.17"'e-1h ,f`" r t 3 APPROVE AS RECOMMENDED OTHER bJ VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPYOF AN ACTION TAKEN UNANIMOUS(ABSENT ) AND ENTERED ON THE MINUTES OF THE BOARD OF SUPERVISORS ON THE DATE AYES: NOES: SHOWN. ABSENT: IABSTAIN: ' ATTESTED CONTACT:Kelly Flanagan(335-1849) JOHN SWEETEN,CLERK OF THE BOARD OF SUPERVISORS AND COUNTYADMINISTRATOR cc: County Administrator r rs (i BY7� L, -� _,DEPUTY HAB of ATIn Adv Amwd Staff Report.wpd ORDINANCE NO. 2003-30 PROTECTING CONSUMER FINANCIAL INFORMATION The Contra Costa County Board of Supervisors ordains as follows (omitting the parenthetical footnotes from the official text of the enacted or amended provisions of the County Ordinance Code): SECTION 1. This ordinance amends Section 518 of the County Ordinance Code to comply with the order of the United States District Court in its Judgment of August 11, 2003 in the case of Bank of America.N.A., et al. v. Cit of DalyCity, California et al. This ordinance also amends Ordinance No. 2003-44 to extend its effective date. SECTION 11. Section 518-4.602(a) of the County Ordinance Code is amended to read: "(a) A financial institution shall not disclose to,or share a consumer's confidential consumer information with any nonaffiliated third party 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 acknowledgment 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 signed 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." (Ords. 2003-30, § 2; 2002-30, §2.) SECTION 111. Section 518-4.604(x)of the County Ordinance Code is amended to read: "(a) Nothing in this ordinance shall require a financial institution to provide a written notice to consumer pursuant to Section 518-4.602 if the financial institution does not disclose confidential information to any nonaffiliated third party, except as provided in Section 518-4.606." (Ords. 2003-30, § 3; 2003-03, § 5; 2002-30, § 2.) SECTION IV. Section 518-4.608(a) of the County Ordinance Code is amended to read: "(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 chapter, do not apply to any person or entity that meets the requirements of paragraph(1) or(2)of this subsection except when confidential consumer information is or will be shared with a nonaffiliated third party. (1) The person or entity is licensed in one or both of the following categories and is acting within the scope of the respective license: (A) As an insurance provider, licensed pursuant to Chapter 5 (commencing with Section 1621), Chapter 6 (commencing with Section 1760), or Chapter 8 (commencing with Section 183 1)of Division 1 of the Insurance Code. ORDINANCE NO. 2003-30 1 (B) Is duly licensed to sell securities. (2) The person or entity meets the requirements of paragraph(1)of this subsection and has a written contractual agreement with another person or entity described in paragraph(1)of this subsection 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 the ordinance codified in this chapter. (C) A requirement that transactions specified in the contract fall within the scope of activities permitted by the licenses of the parties." (Orris. 2003-30, § 4; 2002-30, § 2.) SECTION V. SECTION II of Ordinance No. 2002-44 is amended to read as follows: "SECTION IL EFFECTIVE DATE. This ordinance shall be effective July 1, 2004, and within. 15 days of passage shall be published once with the names of the supervisors voting for and against it in the Contra Costa Times, a newspaper published in this County." (Ords. 2003-30, § 5; 2002-44, § 2; 2002-30, § 3.) SECTION VL EFFECTIVE DATE. This ordinance shall be effective 30 days after passage, and within 15 days of passage shall be published once with the names of the supervisors voting for and against it in the Contra Costa Times, a newspaper published in this County. PASSED ON by the following vote: AYES: NOES: ABSENT: ABSTAIN: ATTEST: JOHN SWEETEN, Clerk of the Board of Supervisors and County Board Chair Administrator By [SEAL] Deputy ORDINANCE NO. 2003-30 2