Copyright 1999 The Washington Post
The Washington
Post
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June 24, 1999, Thursday, Saturday, Final
Edition
SECTION: FINANCIAL; Pg. E01
LENGTH: 535 words
HEADLINE:
Privacy Provision Slows Banking Bill
BYLINE: Kathleen
Day, Washington Post Staff Writer
BODY:
Under pressure from the financial services industry, House
Republican leaders are spearheading an effort to delete a provision in the
pending financial services overhaul bill that would give consumers new authority
to stop banks, brokers and insurers from sharing customer information among
affiliates, according to industry and government sources.
The House
Commerce Committee had adopted the provision last week. The bill would make it
easier for banks, securities firms and insurers to merge with one another and
share information among affiliates to market new services and products. Since
the Commerce Committee met, though, industry lobbyists have said they will
oppose the bill if the privacy provision is not removed, sources said.
Industry leaders argue that allowing consumers to ban the sharing of
information effectively defeats the purpose of merging banks, brokers and
insurers. The overhaul bill the industry has been pushing would allow those
mergers to take place more easily and allow the resulting companies to
cross-sell products without the hindrance of Depression-era laws that severely
limit how closely financial companies can mingle banking, brokerage and
insurance products.
Rules Committee Chairman David Dreier (R-Calif.),
Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.), House Banking
Committee Chairman Jim Leach (R-Iowa), House Speaker J. Dennis Hastert (R-Ill.),
and other top House Republicans and their staffs have been in one meeting after
another in the past two days to try to come up with a solution to the privacy
question.
It's not only Republicans who are involved. Rep. Martin Frost
(D-Tex.) has been working to craft language on the issue that everyone can
accept, including the Democrats on the Commerce Committee who originally
sponsored the privacy provision -- Reps. John D. Dingell (Mich.) and Edward J.
Markey (Mass.).
"What they [the leaders] are proposing is a travesty. It
fails to give consumers a meaningful right to say no to financial institutions
transferring their most personal financial information," a Markey spokesman
said.
The meetings are part of a larger discussion on how to reconcile
the Commerce Committee's version of the overhaul bill with a version the Banking
Committee passed earlier this year so that a final bill can be sent to the House
floor next week.
David Runkel, spokesman for the House Banking
Committee, was rankled at suggestions that the effort to change the affiliate
sharing provision was primarily a Republican effort.
"The privacy issue
remains open for discussion by Republicans and Democrats," Runkel said. "There
are bipartisan efforts to come up with language acceptable" to the industry. And
he noted, as many other congressional staffers and lobbyists did, that no final
decision on the issue had been made.
Republicans have made one key
decision, sources said: The bill that goes to the House floor will give the
Treasury Department and the Federal Reserve Board joint oversight of the
nation's banking companies. That's the position favored by the House Banking
Committee and the White House. The Commerce Committee favored making the Fed the
primary bank regulator.
LOAD-DATE: June 24, 1999
