Copyright 2000 The Washington Post
The Washington
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May 9, 2000, Tuesday, Final Edition
SECTION: FINANCIAL; Pg. E03
LENGTH: 629 words
HEADLINE:
Privacy-Law Deadline to Be Put Off; Delay on Finance Industry's Compliance Hit
BYLINE: Kathleen Day , Washington Post Staff Writer
BODY:
Bank and securities
regulators, with the Clinton administration's blessing, are planning to extend
by eight months a deadline for the financial industry to comply with privacy
laws Congress enacted last fall, prompting criticism from privacy advocates and
some lawmakers who say companies have had plenty of time to prepare for the
rules.
The law mandates that federal agencies this week publish new
regulations requiring financial companies to craft privacy policies and issue
clear statements of that policy to consumers. In addition, the regulations will
require the companies to allow consumers to decline having their personal
financial information shared with unaffiliated third parties. Companies were
supposed to have six months--or until Nov. 12--to comply with the final
regulations. Saying they need more time, industry officials have persuaded
regulators to give them until July 1, 2001.
"What this really shows is
that policymakers have consistently underestimated the complexity of the privacy
issue," said Ed Yingling, chief lobbyist for the American Bankers Association.
"The timetable that was set last fall was never realistic."
The decision
is potentially embarrassing to the White House, which just last week introduced
new legislation for even tougher financial privacy laws. Both critics and
proponents of tougher privacy laws say it's contradictory for the administration
to delay implementation of the current law as it advocates a tougher one.
Treasury Department officials, who have taken the lead on the privacy
issue for the White House and have worked closely with the regulators to craft
the rules, say there's no inconsistency. Treasurey Secretary Lawrence H.
Summers, speaking to a group of banking executives yesterday, said the delay
underscores the complexity of privacy rules and the need to quickly enact
tougher laws rather than waiting to see how well implementation of current law
works.
But Republican congressional aides, who oppose the White House
legislation and spoke on the condition that their names not be used, said the
delay undermines the White House's argument that tougher laws are needed.
And some advocates of stronger privacy rules say they will push the
regulators not to delay. Rep. Edward J. Markey (D-Mass.), who favors tougher
privacy measures, wrote in a letter to financial regulators, "We would note that
the financial services industry has had ample notice and time to prepare for
these new regulations." Markey was circulating the letter late yesterday among
other lawmakers for their signature and expects to deliver it today.
Regulators are expected to announce the compliance delay this week as
they publish the final rules by Friday's deadline. The regulators include the
Office of the Comptroller of the Currency, the Office of Thrift Supervision, the
Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit
Union Administration, the Federal Trade Commission, and the Securities and
Exchange Commission.
Regulators have created a working privacy group to
ensure that the agencies' final regulations are consistent. Treasury Department
officials say current law gives regulators the leeway to extend the compliance
period if needed.
Last week, the White House proposed legislation to
give consumers sweeping new powers to block companies from sharing consumer
financial information among affiliated or unaffiliated companies. The financial
industry decried the proposal, saying current law should be implemented and
assessed before any new privacy laws are passed. The proposal stands little
chance of passing in an election year but was read as an indication that Vice
President Gore would favor tougher standards if he wins the presidency.
LOAD-DATE: May 09, 2000 
