STATEMENT ON FINANCIAL PRIVACY REGARDING GRAMM-LEACH-BLILEY ACT
STATEMENT ON FINANCIAL PRIVACY REGARDING GRAMM-LEACH-BLILEY ACT
June 20, 2001
We recognize the importance of privacy and are encouraged that many interest groups, politicians and businesses are also working to address this significant issue. Changes in the law, such as the Gramm-Leach-Bliley Act, as well as changes in regulation and technology mean that privacy will only grow as an issue that consumers, politicians and businesses alike must continue to debate. The FCF has a long-standing commitment to the issue [which Lisa will explain here].
The current status quo for financial privacy is in a state of great flux but does not fully satisfy anyone. Many privacy advocates think some areas need to be strengthened. Many industry leaders argue that the burden may already outweigh any real benefit for the consumer. Where we all agree is the need for change.
The financial privacy policies mandated by Title V of the Gramm-Leach-Bliley Act will require financial institutions to give their customers the choice to “opt out” of the selling or sharing of their person information in most cases. The Act was a very comprehensive and complicated one that both acknowledges the great changes that have occured in the marketplace and with the development of new technologies and new financial products. The Gramm-Leach-Bliley Act also forces a great deal of change on the industry. The treatment of privacy considerations in this context means that it is likely to be process, not an event.
In this context of a process of great change, we urge those hesitant to address the privacy implications that more needs to be done. We also urge those who demand immediate results to consider the whole context of great change and work together to help guide this process along in the most responsible manner forward. Already, the privacy debate process has been improving: at the beginning of this debate, such simplistic political statements and cavalier analyses did not recognize the need for data exchange for necessary anti-fraud measures or for regular and expected processes such as the printing of checks and account statements which are of great benefit for the customers without unduly jeopardizing their privacy.
The Free Congress Foundation stresses need for continuous vigilance and the need to respect principles of consent and individual choice. This process should recognize implied consent to share information where customers “opt” for specific products such as getting frequent flyer miles on credit card purchases. We would all be best served if the process were to focus on significant and real privacy abuses such as the gratuitous selling of personal information without consent and guard against future troubling possibilities such as the sharing of sensitive medical information.
There is a need for action on the part of both individuals and for privacy watchdogs. Individuals must decide what their privacy concerns are and act accordingly. The best way for consumers to “opt out” of policies that they do not like is to vote with their feet and put companies with bad privacy policies out of business. We would all be better off.
We celebrate the efforts of Beth Givens regarding consumer education and making choice easier. The Privacy Rights Clearinghouse is a nonprofit consumer education, research, and advocacy program which aims to empower consumers to take action to control your personal information by providing practical tips on privacy protection. There are two web sites that offer consumers valuable information: http://www.privacyrights.org and http://www.privacyrightsnow.com.
It would behoove trade associations and individual financial institutions alike to send her their members’ and their privacy policy statements for consumers to compare. Those insitutions that facilitate consumer education on privacy issues are the ones probably best suited to trust with our personal information.