A revised version of the California Financial Information Act (S-773) is inching its way through the state legislature.
All it needs is the support of the General Assembly’s Banking Committee before it reaches the Assembly floor for a new vote. The panel, led by Democrat Assemblyman Louis Papan is scheduled to consider endorsing the revised measure tomorrow.
The Assembly defeated the original version of the bill last year in a 32-26 vote. The Senate passed it in its original form by a vote of 25-13.
With strong opposition to the measure from the state’s banking industry it is questionable whether Gov. Gray Davis will sign it into law so it could take effect on Nov. 1, 2003.
The new version of the bill is a softened version of the original sponsored by Democrat State Sen. Jackie Speier. It also incorporates portions of a similarly titled measure introduced in the Assembly last year by Democrat Assemblyman Joe Nation.
At the same time, it conflicts sharply with existing federal law, which requires that banks, insurance companies and other financial institutions give their customers a chance to opt out from allowing their personal information to be shared with third parties for marketing purposes.
The revised bill still requires consumers to opt in before companies could share their information with affiliates, but mandates that consumers be sent a simpler, less complicated opt in form to fill out.
Financial institutions would be allowed under the revised bill to share customer information with nonaffiliated firms without permission for marketing purposes only if they contracted with the nonaffiliated company before Jan. 1, 2003.
The new version of the bill would pre-empt all current local privacy ordinances and rules. Violators would be subject to a civil penalty of up to $2,500 per incident. Third parties that knowingly violated the law would also be subject to a civil penalty of up to $2,500 per incident.
In a related bank privacy development the holding company of the West Georgia National Bank in Carrollton, GA, announced an eight-point program called MyID to protect the financial information of its customers and to combat identity theft.
It includes on-site shredding of all bank-produced information; a no opt out clause/zero tolerance for sharing customer information; debit cards with a customer’s picture and signature on the face of the card, and computer-based photo verification at the teller window.
In addition all bank mailings will exclude a customer’s Social Security Number as required by federal law. The bank will also provide free shredding services of personal banking records for customers; help customers who have been the victim of identity theft, and provide customers with information on identity theft prevention.
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