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Major Breakthrough in California Campaign to Win Financial Privacy Protections


Thursday, August 14, 2003
Michael McCauley 415-431-6747
Laurie Azzano 504-296-1349 (cell)
Tiffany Kelley 925-560-2614
Dan Schnur 916-441-0934

SACRAMENTO, CA – In a sweeping victory for consumers and taxpayers, Californians for Privacy Now (www.californiaprivacy.org) today announced that California is poised to enact the strongest financial privacy protection law in the nation. Following a series of meetings over the past week, financial industry representatives have indicated that they will no longer oppose landmark privacy reform legislation and Governor Gray Davis has pledged to sign the bill into law.
“This is a monumental victory for California consumers and taxpayers,” said Chris Larsen, E-LOAN’s Chairman and Chief Executive Officer. “We are thrilled that our negotiation efforts with consumer groups and the financial industry have paid off. We are confident that by next Wednesday the legislature will pass the strongest consumer financial privacy law in the nation and that the Governor will stand by his pledge to sign it into law.”
Negotiations involving members of the Steering Committee of Californians for Privacy Now, Senator Jackie Speier and financial industry representatives began last week. The meetings were held to determine how to maintain the strong consumer protections included in Senator Speier’s financial privacy bill (SB 1) while overcoming some of the financial industry’s workability concerns. In the end, a slightly revised version of the bill emerged, resulting in a major victory for California consumers and taxpayers.
“This bill maintains the same strong framework for protecting consumers’ financial privacy that we’ve advocated all along,” said Betsy Imholz, Director of Consumers Union’s West Coast Regional Office. “With some very minor changes, this is essentially the same proposal we urged state lawmakers to enact earlier this year.”
If the legislature fails to pass Senator Speier’s bill before petitions are due to the Secretary of State’s office on August 20, Californians for Privacy Now will take the issue directly to the voters by turning in over 600,000 signatures to qualify its privacy initiative on the March 2004 ballot.
“As we’ve said all along, we believe that the legislative process is the most constructive way to get laws passed,” said Beth Givens, Director of Privacy Rights Clearinghouse. “However, if the legislature fails to do the right thing before the petitions are due to the Secretary of State’s office on August 20, we’ll be compelled to take our ballot measure directly to the voters so that they can settle this issue once and for all.”
Under Senator Jackie Speier’s financial privacy bill, California consumers will have the right to stop the sharing of information by financial institutions with affiliates unless they meet very stringent criteria. The bill requires financial institutions to obtain a consumer’s affirmative consent before sharing information with third parties. It also establishes standards that financial institutions would be required to follow to inform consumers of their privacy rights.
“Enacting these groundbreaking consumer financial privacy protections in California will set the standard for similar reforms across the country,” said Lupe De la Cruz, Legislative Director for AARP in California.
Under current federal law, consumers have very little protection when it comes to controlling whether their personal information is shared or sold by financial institutions with which they do business. These weak protections leave consumers vulnerable to identity theft, aggressive marketing practices, and fraud.
Californians for Privacy Now is a coalition of organizations, including AARP, CalPIRG, Consumer Federation of California, Consumers Union, E-LOAN, Privacy Rights Clearinghouse, and American Civil Liberties Union.