The House Financial Services Committee is expected to consider a bill that would change the privacy protections of the two year old Financial Services Modernization Act, alternately known as the Gram-Leach Bliley Bill, when Congress reconvenes next Wednesday.
The Consumer’s Right To Privacy Act (HR-2720) sponsored by Reps. Edward Markey (D-MA) and Joe Barton (R-TX), would replace the existing “opt-out” provision in the FSMA with an “opt-in” provision, which would prohibit banks, insurance, securities and other financial institutions from sharing a person’s personal financial information with third parties for marketing purposes without permission.
Additionally it would prohibit banks, insurance, securities and other financial companies from “denying service to consumers for exercising their right to say no to having their personal financial information sold or transferred to others.”
It would also give consumers the right to review their personal information held by those institutions and companies; expand the Federal Trade Commission’s authority in financial privacy matters and permit state authorities to file civil actions against violators who face damages of up to $1,000 per violation, plus court costs.
This is the second time the pair introduced the bill. Their first efforts in 1999 died with the expiration of the 106th Congress.
“By introducing this bill, we are signaling our determination to assure that consumers are given the right to say no to their bank, their broker, or their insurance company selling or sharing their family’s financial secrets with other companies,” Markey said in a statement.
He went on to say that “consumers want companies to have to get their permission before selling or sharing their financial records with others” in the same way as they have to give their permission before companies can rent or sell other information about them.
Barton, who co-chairs the Congressional Privacy Caucus, said in a statement that the “current opt-out standard places the burden of privacy protection squarely on the shoulders of consumers.”
While he ripped the privacy notices banks, insurance, securities and other financial companies sent to consumers earlier this year, comparing them to “deciphering Sanskrit,” Markey said “the jargon ridden, loophole laden, privacy notices…….underscore the inadequacies in the current law and the need for the type of stronger privacy protections” being proposed.
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