LEGISLATIVE UPDATES

8/7/00

Federal Agencies to Conduct Bankruptcy Privacy Study

On July 31st, the Department of Justice, the Department of the Treasury and the Office of Management and Budget issued a notice regarding a study on how the filing of a bankruptcy affects the privacy of individual consumer information that becomes part of a bankruptcy case. The study will consider how the privacy interests of debtors in personal bankruptcy cases are affected by the public availability of information about them in those case.

It will also consider the need for access to this information and accountability in the bankruptcy system. Finally, it will consider how changes in business practices and technology may affect all these interests. To assist in the study, these agencies are requesting public comment on a series of questions. The study is to be completed by December 31, 2000. Any responses to the questions listed below should be submitted by September 8, 2000.

 The Study will examine: 

The types and amounts of information that are collected from and about individual debtors, as well as analyzed and disseminated, in personal bankruptcy cases.

Current practices, and practices envisioned for the future, for the collection, analysis, and dissemination of information in personal bankruptcy proceedings.

The needs of various parties for access to financial information in personal bankruptcy cases, including specifically which individuals or entities require access to which particular types of information, for what purposes, and under what circumstances.

The privacy issues raised by the collection and use of financial and other information in personal bankruptcy cases. The effect of technology on access to, and the privacy of, a debtor's personal information.

Business or governmental models that can provide access to, and protect debtors' privacy interests in, bankruptcy records.

Principles for the responsible handling of information in bankruptcy records, and recommendations for any policy, regulatory, or statutory changes.

Questions to be Addressed:

1.01          What types and amounts of information are collected from and about individual debtors, analyzed, and disseminated in personal bankruptcy cases?

(1.1)         What types of information are collected, maintained, and disseminated in bankruptcy?

(1.2)         Which of these data elements are public record data?

(1.3)         Which are non-public record data held by bankruptcy trustees?

(1.4)         How much data is at issue?

(1.5)         Are certain types of data more sensitive than others; that is, are there types of data in which debtors would have a stronger privacy interest? If so, which ones?

(1.6)         How valuable is the information in the marketplace?

2.0 What are the current practices, and practices envisioned for the future, for the collection, analysis, and dissemination of information in personal bankruptcy proceedings?

(2.1)         What methods of data collection and aggregation are now used by the courts, creditors, trustees, and other private actors to collect, analyze, and disseminate public record data and non-public data?

(2.2)         What methods are being contemplated for the future?

3.0 What access do various parties need to financial information in personal bankruptcy cases? Which individuals or entities require access to which particular types of information, for what purposes, and under what circumstances?

(3.1)         What entities currently access public record data?

(3.2)         What entities currently access non-public data from trustees?

(3.3)         What specific data elements do they need, and for what purposes?

(3.4)         Are the purposes for which the information is sought consistent with the public interest?

A.     Public Record Data

(3.5)         What data elements in public record data should remain public for purposes of accountability in the bankruptcy system? For other purposes?

(3.6)         Is there certain information that need not be made available to the general public, but could be made available to a limited class of persons?

(3.7)         If so, what are these data elements, to whom should they be made available, and for what purpose?

(3.8)         Is there a need to make the following data elements publicly available: (a) Social security numbers, (b) bank account numbers, (c) other account numbers?

 

B.    Non-Public Data 

(3.9)         What issues, if any, are raised by existing limitations on trustees' handling of personal information?

(3.10)     Are all of the data elements held by bankruptcy trustees necessary for case administration purposes? If not, which data elements are not?

(3.11)     What interests would be served by private or commercial enterprises collecting, compiling electronically, and redistributing information from bankruptcy cases?

 

4.0 What are the privacy issues raised by the collection and use of personal financial and other information in personal bankruptcy proceedings?

 

A.     Public Record Data

(4.1)           Do debtors' have privacy interests in information contained in public record data made available through the bankruptcy courts? If so, what are those interests? Do they vary by data element? If so, how?

(4.2)           What are the benefits of a public record system for court records in bankruptcy cases?

(4.3)           What are the costs of collecting and retaining data in bankruptcy cases?

(4.4)           To what extent do individuals who file for bankruptcy understand that all of the information contained in the public bankruptcy file is available to the public?

(4.5)           Should debtors in bankruptcy be required to forego some expectation of privacy that other consumers have under other circumstances?

(4.6)           Are there characteristics about debtors in bankruptcy that raise special concerns about wide public dissemination of their personal financial information?

 

B.     Non-Public Data

(4.7)           What are debtors' expectations about what uses and disclosures of information will be made by bankruptcy trustees?

(4.8)           What, if any, privacy interests lie in non-public bankruptcy data held by bankruptcy trustees?

(4.9)           If non-public data were made widely available to the public or to creditors for other non-bankruptcy purposes, what might be the consequences?

(4.10)       Are privacy interests affected if the distribution of non-public data bankruptcy information is for profit?

 

5.0 What is the effect of technology on access to and privacy of personal information?

(5.1)           Do privacy issues related to public record data in bankruptcy cases change when such data are made available electronically? On the Internet? If so, how?

(5.2)           Do privacy interests in non-public data change when such data are compiled electronically for ease of administration of bankruptcy cases? For commercial use? For other use?

(5.3)           Are new technologies being used to improve access to court records? Non-public bankruptcy data? Should they be? Why or why not?

 

6.0 What are current business or governmental models for protecting privacy and ensuring appropriate access in bankruptcy records?

(6.1)           What statutes, rules, or policies can serve as models for maintaining appropriate levels or access and privacy protection for public bankruptcy records? For non-public bankruptcy information held by trustees?

(6.2)           What statutes, rules, or policies are ineffective in providing appropriate access and privacy interests?

(6.3)           What statutes, rules, or policies, are otherwise relevant to this Study?

 

7.0 What principles should govern the responsible handling of bankruptcy data? What are some recommendations for policy, regulatory or statutory changes?

 

A.     Public Record Data

(7.1)           To what extent are privacy safeguards appropriate for public record data? If safeguards are appropriate, what should they be? How should they be crafted to ensure that they do not interfere with legitimate public needs to access certain bankruptcy data?

(7.2)           Should notice about the public nature of bankruptcy filings be provided to individuals who file for bankruptcy? What form should such notice take?

(7.3)           Should there be any restrictions on the degree of accessibility of such information, such as rules that vary if information is made available electronically? Via the Internet? If so, what should they be? Should policies on the handling of information in bankruptcy cases be technology neutral, so that the rules for dealing with information are the same regardless of what medium is used to disclose such information? Why or why not?

(7.4)           Are there any data elements in public record data that should be removed from the public record and held instead as non-public data by bankruptcy trustees or courts?

(7.5)           Is there some experience with other public records that is relevant to the privacy and access issues in bankruptcy cases? Do any records or filing systems, for example in the courts, provide instruction in this regard?

 

B.     Non-Public Data

(7.6)           To what extent are privacy safeguards appropriate for non-public data held by bankruptcy trustees in bankruptcy cases? If some safeguards are appropriate, how should they be structured? How should they be crafted to ensure that they not interfere with the needs of bankruptcy trustees to administer their cases?

(7.7)           Should debtors receive notice of what uses and disclosures will be made of their information in the hands of bankruptcy trustees? What would be the effects of such disclosures?

(7.8)           Should restrictions be imposed on the use and disclosure of information held by bankruptcy trustees? If so, what types of restrictions? What would be the effects of such restrictions?

(7.9)           Should debtors be permitted to access the information held about them by bankruptcy trustees? If so, under what circumstances? What would be the effects of such access?

(7.10)           If bankruptcy data are compiled and made easily and widely available to users outside of the bankruptcy system, should these users be charged for the collection and distribution process? How would the amount of the charge be set?

 

 

 

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TMA is committed to providing the most recent legislative actions affecting the corporate renewal industry. The following updates are provided by TMA's Legislative Consultant, David P. Goch, of Webster, Chamberlain & Bean in Washington, DC. Please contact David at dgoch@wc-b.com or (202) 785-9500 for more information or specific questions about the legislative information provided below.