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CONTACT: Amy Simmons/(202) 225-7141 FOR IMMEDIATE RELEASE:
                     Gary Luczak/(202) 225-3231 June 28, 2000


BANKING COMMITTEE ADOPTS LaFALCE CONSUMER PRIVACY PROVISIONS

WASHINGTON, D.C., June 28-- The Committee on Banking and Financial Services today adopted measures offered by U.S. Rep. John J. LaFalce (D-29, NY), Ranking Member of the Committee on Banking and Financial Services, that take bold steps to preserve consumer privacy. The LaFalce provisions were adopted during the Committee's mark up of of H.R. 4585, the "Medical Financial Privacy Protection Act." A LaFalce amendment that gives consumers the right to sue if their medical information is misused in violation of the law was adopted by voice vote. Another LaFalce provision that was adopted bars financial institutions from requiring or coercing a consumer to consent to sharing their personal information as a condition for receiving a financial product.

"This is a huge victory for consumers. And a huge victory for those of us in Congress who want meaningful privacy rights for all consumers." said LaFalce.

LaFalce, who earlier introduced a strong consumer privacy bill, H.R. 4380, led Democratic efforts to defeat Republican attempts at gutting privacy provisions during the negotiations of the Manager's Amendment for H.R. 4585 For instance, Democrats were successful in limiting a broad exception permitting any disclosure of private information for purposes of "customer service," which according to LaFalce "created an enormous loophole." LaFalce was also successful in pressing the Republicans to drop a provision which in effect would have effectively nullified any "opt in" consumer protection for people in group health plans.

Frank Torres, Legislative Counsel for Consumers Union said, "There is no doubt that Congressman LaFalce cares about consumer privacy. He puts his money where his mouth is. The amendments he introduced today– to create a private right of action for consumers and to protect them from coercion– show that he is a true champion of consumer rights."

Committee Democrats were also successful in expanding protections for highly sensitive information to include personal genetic information, in addition to mental health. This means an individual's genetic susceptibility to disease cannot be used to disqualify them for any insurance or other financial service.

However, despite these victories, LaFalce still expressed concern that the bill did not address a broader array of privacy issues.

"A major limitation of the bill before us is the fact that it applies only to medical and health information. The higher standard of protection for sharing of consumer profiles and lists should apply to all sensitive financial and health information," said LaFalce. "The new protections for consumer access and correction should apply to all sensitive financial information. The stronger standards for reuse and redisclosure of information should apply to all sensitive financial information and not just health or medical information."

"I regret that my amendments to add those protections were considered non-germane. I believe them not only germane, but extremely important, and will pursue those additional protections aggressively in the future."

The vote on final passage was 26 to 14 with all 22 Democrats present voting "aye", 4 Republicans voting "aye", and 14 Republicans voting against the medical privacy bill.


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