LaFALCE LEGISLATION SEEKS BROADEST CONSUMER
PRIVACY PROTECTION

WASHINGTON, D.C., June 14-- U.S. Rep. John J. LaFalce (D-29, NY), Ranking Member of the Committee on Banking and Financial Services, today said that privacy laws should not stop at safeguarding only health related information in limited areas, but go further and protect the full range of financial and medical privacy concerns of all consumers. LaFalce, the author of the "Consumer Financial Privacy Act" (HR 4380), the Administration's privacy initiative, made his remarks during a full Committee hearing on the "Medical Financial Privacy Act" (H.R. 4585), legislation recently introduced by Republican Chairman Jim Leach.

The Leach proposal (H.R. 4585) "is comparable to the medical privacy provisions of the more comprehensive Administration privacy initiative that I introduced in early May," said LaFalce. "While there are a few substantive problems I believe we can correct, the primary limitation of H.R. 4585 is that it applies only to medical and health information. The higher standard of protection for the sharing of consumer profiles and lists should apply to all sensitive financial and health information. The stronger standards for reuse and re-disclosure of information should apply to all sensitive financial information and not just health or medical information," said LaFalce.

While H.R. 4585 would restrict financial institutions from using or disclosing personally identifiable health and medical information without consumer consent, the LaFalce approach more broadly expands on the framework of privacy protections that were initially included in the Financial Services Modernization Act, as the result of a bipartisan compromise LaFalce helped to craft.

"If consumers don't want their financial account information shared among affiliated companies without their knowledge, we need to do more than the H.R. 4585," said LaFalce. "If consumers object to having their spending habits and product preferences monitored and sold or shared for marketing purposes, we need to do more than H.R. 4585. If consumers don't want health and insurance information taken into consideration for investment or employment decisions, we need to do more than H.R. 4585. If American consumers want to have the same privacy rights being given to European customers of U.S. institutions, we need to do more than H.R. 4585. And if consumers want the right to determine if their financial records are accurate and up to date, we must do more than H.R. 4585. All of these issues are addressed in the more comprehensive Administration proposal I have introduced (H.R. 4380) and which is before the Committee."

The LaFalce bill (H.R. 4380) extends consumer protections in the following ways:

LaFalce introduced the "Consumer Financial Privacy Act," H.R. 4380, last month, supported by Treasury Secretary Larry Summers and House Democratic Leader Richard Gephardt. The legislation has been praised by all the major consumer organizations, including those testifying at today's hearing: National Consumer Law Center, U.S. Public Interest Research Group, and Consumers Union.