Second, the industry is warning Congress that unless a national standard is created, and/or the ruling reversed by a higher court, the ruling sets the stage for giving the states the authority to establish patchwork financial standards “contrary to the clear intent of Congress for national, uniform standards for cross-marketing of financial products by financial services companies.”
The comments by Steve Bartlett, president and CEO of the Financial Services Roundtable, before the Senate Banking Committee last Tuesday did not make clear whether his group was asking Congress to pass a law this year specifically establishing national, uniform privacy. Congress thought it was doing that last year when it amended the Fair Credit Reporting Act. But the judge in American Bankers Association vs. Lockyer said the ruling did not bar language in the Gramm-Leach-Bliley Act that gives states authority to enact tougher privacy standards. In the case of Californias law, the ruling requires that insurance companies receive the permission of consumers in advance that would allow affiliates of an insurance company they do business with to solicit them to sell additional products.
In his testimony before the Senate panel on the status of financial services companies 5 years after the enactment of Gramm-Leach-Bliley, Bartlett also noted that federal regulators recently requested comment on alternatives to existing privacy notices that are more readable and useful to consumers.
“To avoid…consumer confusion and regulatory conflict,” Bartlett said, “the privacy standards in GLBA should be national, uniform standards. Also, the federal regulators should be directed to promulgate a simplified, national privacy notice with a safe harbor.”
Reproduced from National Underwriter Edition, July 16, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.