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A Privacy Message to D.C.

September 05, 2003

It's deja vu for Barbara Boxer and Dianne Feinstein, two Democrats in the congressional delegation who witnessed how this state's ballot initiative system finally prodded California legislators to protect the privacy rights of consumers. The senators now must spread California's message to federal colleagues -- Americans are fed up with and want curbs on banks, insurers and telemarketers that swap and profit from their personal financial data.

This issue is coming to a head as Congress reviews the 33-year-old Fair Credit Reporting Act, which governs the exploding business of collecting and evaluating consumer eligibility for credit. The act should be the first line of defense for consumers angered by burgeoning sales of their intimate financial and personal information. The federal law, however, doesn't really protect the easily abused data, coveted by both marketers and identity thieves.

Instead of bolstering the act, the bankers, insurers and securities dealers hope to use a periodic congressional review of the law to prevent California and other states from keeping or creating consumer privacy rules stricter than Uncle Sam's. Stronger, not weaker, regulation is needed because identity theft is rampant and total outstanding consumer credit has soared from $556 billion in 1970 to an estimated $7 trillion now.

Unfortunately, the House -- swooning to big business -- has put up HR 2622, a bill that preserves the interests of the financial services industry over consumers'. This measure, as written, bars states from passing stricter privacy laws, effectively halting California's trail-blazing regulation.

The Senate, which soon will begin its own credit act review, should heed Consumers Union, the AARP and 42 state attorneys general fighting for consumers' rights. Senators should give the nation what Californians got last month when Gov. Gray Davis signed SB 1, the nation's most comprehensive financial privacy protection measure. SB 1 requires businesses to ask customers for permission before selling personal financial data to telemarketers and unrelated companies and expands consumers' rights to halt the sharing of sensitive financial data with corporate affiliates.

Boxer and Feinstein can remind congressional colleagues that more than 550,000 Californians swiftly signed petitions to put a privacy initiative on a statewide ballot in March 2004; corporate opposition to SB 1 evaporated in the face of such overwhelming public support for an even tougher privacy initiative. Current events in California ought to tell Congress that consumer privacy isn't something to be sold out in Sacramento -- or Washington.

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