NU Online News Service, Aug. 22, 6:33 p.m. – The California state legislature is reviving Senate Bill 773, a dormant consumer financial privacy bill.
The California Assembly Banking and Finance Committee voted 7-4 Wednesday to approve the bill, which would put strict limits on financial-services companies’ ability to share confidential consumer information with “nonaffiliated third parties.”
The original version, introduced in February 2001 by Sen. Jackie Speier, D-San Mateo, Calif., and Rep. Joe Nation, D-San Rafael, Calif., would have required financial-services’ companies to ask customers to take active steps to “opt in” to most information-sharing arrangements.
The bill was amended eight times in 2001 and has progressed slowly this year.
The latest version:
- Lets financial services companies offer consumers a chance to opt out of joint marketing arrangements with third parties, rather than inviting consumers to opt in to such arrangements.
- Eases privacy notice requirements, by giving financial institutions permission to include the privacy notices with bills and other mailings.
- Exempts institutions with less than $25 million in assets from a requirement that institutions enclose postage-paid return envelopes along with the opt-out notice forms.
The American Council of Life Insurers, Washington, and property-casualty trade groups still oppose the bill.
The bill must jump through several parliamentary hoops if lawmakers are going to adopt it before the current legislative session ends Aug. 31.
But observers say the bill stands a better chance of enactment this year than it did in the past, in part because the switch to an opt-out provision for third-party joint marketing arrangements, rather than an opt-in requirement, has won new support for the bill from the California Credit Union League, Rancho Cucamonga, Calif.
The new opt-out provision is important because it creates a level playing field for small institutions that need to work with outside marketing companies, according to CCUL spokesman Mark Lowe.