Senator Richard Shelby (R-AL) has sponsored a bill prohibiting financial institutions from buying or selling Social Security numbers.

The Social Security Number Privacy Act (S-324), plugs a loop hole in the two-year-old Financial Services Modernization Act (FSMA) that revised the nation’s financial service’s industry.

Under the FSMA financial service firms are permitted to merge and share customer information to offer competing products and services but are prohibited from sharing confidential customer data with affiliated and unaffiliated third parties without permission.

While financial institutions can sell a vast amount of information about their customers to third parties, Shelby said, there is nothing in the FSMA that prohibits them “from buying and selling individual Social Security Numbers.”

Noting that financial institutions have used Social Security Numbers as personal identifiers, he added that the buying and selling of them “facilitates criminal activity and can result in a significant invasion of individual privacy.”

The legislation would classify individual Social Security Numbers as “nonpublic personal information” under the FSMA, meaning that while they could not be sold, a financial institution could share them with any of their affiliates.

Shelby’s bill would also require various federal regulating agencies, including both the Federal Reserve Board and the Federal Trade Commission, to develop stiff new rules enforcing restrictions on the use of Social Security Numbers.

It is the second major bill relating to the use of individual Social Security Numbers to be introduced so far this year. Last month Representative Ron Paul introduced the Identity Theft Protection Act (HR-220) which would prohibit various local, state and federal agencies from using Social Security Numbers as a personal identifier or disclosing them to anyone, including marketers.

They could only be used by the Social Security Administration in connection with its benefits programs and by the Internal Revenue Service for tax purposes.

Senator Richard Shelby (R-AL) has sponsored a bill prohibiting financial institutions from buying or selling Social Security numbers.

The Social Security Number Privacy Act (S-324), plugs a loop hole in the two-year-old Financial Services Modernization Act (FSMA) that revised the nation’s financial service’s industry.

Under the FSMA financial service firms are permitted to merge and share customer information to offer competing products and services but are prohibited from sharing confidential customer data with affiliated and unaffiliated third parties without permission.

While financial institutions can sell a vast amount of information about their customers to third parties, Shelby said, there is nothing in the FSMA that prohibits them “from buying and selling individual Social Security Numbers.”

Noting that financial institutions have used Social Security Numbers as personal identifiers, he added that the buying and selling of them “facilitates criminal activity and can result in a significant invasion of individual privacy.”

The legislation would classify individual Social Security Numbers as “nonpublic personal information” under the FSMA, meaning that while they could not be sold, a financial institution could share them with any of their affiliates.

Shelby’s bill would also require various federal regulating agencies, including both the Federal Reserve Board and the Federal Trade Commission, to develop stiff new rules enforcing restrictions on the use of Social Security Numbers.

It is the second major bill relating to the use of individual Social Security Numbers to be introduced so far this year. Last month Representative Ron Paul introduced the Identity Theft Protection Act (HR-220) which would prohibit various local, state and federal agencies from using Social Security Numbers as a personal identifier or disclosing them to anyone, including marketers.

They could only be used by the Social Security Administration in connection with its benefits programs and by the Internal Revenue Service for tax purposes.

Senator Richard Shelby (R-AL) has sponsored a bill prohibiting financial institutions from buying or selling Social Security numbers.

The Social Security Number Privacy Act (S-324), plugs a loop hole in the two-year-old Financial Services Modernization Act (FSMA) that revised the nation’s financial service’s industry.

Under the FSMA financial service firms are permitted to merge and share customer information to offer competing products and services but are prohibited from sharing confidential customer data with affiliated and unaffiliated third parties without permission.

While financial institutions can sell a vast amount of information about their customers to third parties, Shelby said, there is nothing in the FSMA that prohibits them “from buying and selling individual Social Security Numbers.”

Noting that financial institutions have used Social Security Numbers as personal identifiers, he added that the buying and selling of them “facilitates criminal activity and can result in a significant invasion of individual privacy.”

The legislation would classify individual Social Security Numbers as “nonpublic personal information” under the FSMA, meaning that while they could not be sold, a financial institution could share them with any of their affiliates.

Shelby’s bill would also require various federal regulating agencies, including both the Federal Reserve Board and the Federal Trade Commission, to develop stiff new rules enforcing restrictions on the use of Social Security Numbers.

It is the second major bill relating to the use of individual Social Security Numbers to be introduced so far this year. Last month Representative Ron Paul introduced the Identity Theft Protection Act (HR-220) which would prohibit various local, state and federal agencies from using Social Security Numbers as a personal identifier or disclosing them to anyone, including marketers.

They could only be used by the Social Security Administration in connection with its benefits programs and by the Internal Revenue Service for tax purposes.