Copyright 1999 Times Mirror Company
Los Angeles
Times
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July 23, 1999, Friday, Home Edition
SECTION: Metro; Part B; Page 6; Editorial Writers
Desk
LENGTH: 490 words
HEADLINE: PRIVACY PROTECTION
BODY:
A consumer's name and Social Security number
are worth a good deal of money. More so if they come with address, phone number,
credit card purchases and bank account balance. Banks, which have all this
information on their depositors, are raking it in, selling data about their
customers to just about anyone who will pay for it. This blatant violation of
personal privacy can be stopped with an amendment to banking reform legislation,
now close to enactment. Such an amendment has been proposed, has the full
backing of the government and consumers and should be adopted. The privacy issue
is a tiny, but increasingly thorny, part of long-overdue legislation designed
primarily to allow banks, insurance companies and brokerage houses to affiliate
under one roof. Years in the making, the measure has broad bipartisan support
and is expected to pass this fall once the House and Senate versions have been
reconciled. If adopted, it will transform banks into financial conglomerates
taking deposits, selling insurance and trading stocks.
If the banks had
their way, there would be no restrictions on what they do with customer data.
Adverse medical records obtained by an applicant for life insurance could be
sent to the lending affiliate, which could then deny a mortgage or require the
purchase of an insurance policy. Cashing in a life insurance policy could bring
a call from the bank's brokerage affiliate, soliciting business.
After a
blizzard of adverse publicity, the banks agreed to give customers the modest
right to "opt out" of disclosure to outsiders unaffiliated with the bank. That
doesn't go far enough. As Comptroller of the Currency John D. Hawke, the
country's top banking regulator, told a House banking subcommittee Wednesday,
unrestricted sharing of customer data among affiliates would undermine the trust
on which the banking system is built.
Rep. Edward J. Markey (D-Mass.)
proposed an amendment that would allow customers to opt out of any disclosure,
either to outsiders or to the banks' affiliates. That is the minimum provision
the final bill should include. It would be even better if banks had to get
explicit permission--an "opt in"--but such a consumer-friendly idea has little
chance of consideration.
The House-Senate conference committee, in
drawing up the final version of the bill, should also delete a sinister
anti-privacy provision inserted into the bill by Rep. Greg Ganske (R-Iowa) that
would allow health insurers to sell medical records to other insurance companies
without the consent or even knowledge of the patient. Ganske's bill, adopted by
the House without public debate, would shred even the meager protections some
states have tried to enact.
Banks have frittered away the confidence of
their customers and lost their case for self-regulation. A law giving consumers
some control over their private financial and medical records is the only
reasonable recourse.
LOAD-DATE: July 23, 1999
