Pending Lawsuits and Legislation Force Bankers To Examine Consumer Financial Privacy
The Financial Services Roundtable, a banking industry group, has called for a “summit meeting” to address the issue of the privacy of financial records of banking customers. The meeting could take place as soon as next month.
The announcement follows a week of attacks on the banking industry’s current privacy practices. A suit was filed against US Bancorp alleging that such confidential data was shared with telemarketers pitching products or services to US Bancorp customers in Minneapolis. In reaction, a class action suit was filed in St. Paul against US Bancorp and First Bank Systems, claiming violations of various statues addressing the transfer of confidential customer information to telemarketers. And while citing no particular inspiration, The Bank of America announced that it will no longer share any customer data with third-party marketers who offer their products or services to its customers and no longer allow such marketers to offer products unrelated to customers’ financial needs.
In addition, United States Comptroller of the Currency John D. Hawke Jr. issued a statement that suggested banks stop selling customer data to unaffiliated telemarketers lest Congress legislate against the practice. And a banking bill that includes passages giving consumers the right to block banks from sharing personal financial information with their insurance or securities affiliates cleared the House Commerce Committee last week.
The industry argues that sharing information with affiliate companies is necessary to provide customers with one-stop shopping for financial services. While acknowledging that the meeting might lead to an industry-wide privacy code of ethics, a spokesperson for the Roundtable voiced concern that attaching privacy legislation to banking reform in Congress could derail both measures.
