The protection of Social Security numbers is a burning theme on Capitol Hill this term.
Two pieces of legislation have been introduced in the Senate to prohibit the buying and sale of Social Security numbers in a month. The newest would make it a federal crime punishable by 5 years in prison and a $25,000 fine to buy and sell Social Security Numbers.
The Social Security Number Protection Act, sponsored by Florida’s freshman Democrat Sen. William Nelson, would also subject violators to civil penalties of between $10,000 and $100,000 for each number that is sold or purchased.
An earlier measure, sponsored by Sen. Richard Shelby (R-AL), seeks to plug a loophole in the two-year-old Financial Services Modernization Act (FSMA) by prohibiting the buying and selling of Social Security Numbers. But it does not include any provisions for civil or criminal prosecutions and penalties.
The FSMA reformed the nation’s financial services industry by permitting banks, insurance, securities companies and other financial firms to merge and offer competing services. Although the law also prohibited the sharing of confidential financial information of customers with affiliates and unaffiliated third parties, it allowed third parties to buy and sell a customer’s Social Security numbers.
Nelson is also sponsoring the Financial Institution Privacy Protection Act (S-450), to plug another loophole in the FSMA.
That bill would require banks and other financial institutions to obtain a customer’s written permission before selling or sharing their private financial and medical data with affiliates or business partners, including advertising agencies and marketers.
It would also prohibit them from refusing to provide insurance, investments, loans and mortgages to customers refusing to allow their personally identifiable financial and medical data to be shared with third parties.
Meanwhile in the House, a bill limiting the use of individual Social Security numbers is pending. The Identity Theft Protection Act (HR-220), sponsored by Rep. Ron Paul (R-TX), would prohibit various local, state and federal agencies from using Social Security numbers as personal identifiers or disclosing them to anyone, including marketers.
But it would allow use of those numbers by the Social Security Administration in connection with its benefits programs and by the Internal Revenue Service for tax purposes.
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