Bryan rips lack of privacy protection in bill

Phil Levine

Monday, Oct. 25, 1999 | 11:23 a.m.

Sen. Richard Bryan says a lack of privacy protection in a historic new banking bill means "financial institutions got the gold, while consumers got the shaft."

Acknowledging the need for an overhaul of banking and financial industry laws, Bryan said the privacy protection offered in the new legislation "is truly a sham."

Bryan, D-Nev., is a member of the Senate Banking Committee and has been close to the issue.

The historic bill -- a compromise agreed to early Friday -- would make it easier for financial and insurance companies to merge businesses, products and customers. Proponents say the legislation, replacing 60-year-old banking laws, is needed if America's financial and insurance sectors are to remain healthy.

Opponents of the bill say the lack of privacy protection means consumers' most private information will be eagerly shared between banking, securities and insurance partners.

Bryan found himself on the losing end of a political tug-of-war between consumer groups and privacy advocates on one side, and the powerful financial and insurance lobby on the other.

"In my 12 years on the banking committee, I've never seen a more intense lobbying effort," said Bryan. "And this is not a theoretical issue. This is a real problem. You need only look at what happened previously with U.S. Bank."

Earlier this year, U.S. Bank agreed to pay $500,000 to the state of Minnesota and $2.5 million in charities to settle an investigation into allegedly illegal direct marketing practices. In agreeing to the settlement, the bank did not admit to any wrongdoing.

Changes in the proposed bank legislation, which must now pass both the Senate and House, include

But it's the issue of lost consumer privacy that most troubles Bryan and other consumer advocates.

Bryan said there's little doubt increased joint marketing agreements between banks, insurance companies and securities firms will result in a sharing of "everything from credit card to personal health information."

The senator did not mince words in his criticism of what he perceived as the "hypocrisy" of the industry lobbyists pushing for the bill's passage.

"One of the things that offended me greatly was that these same institutions provide their European customers with greater privacy than will be available to their American customers," he said. Financial institutions provide their European customers the option to "opt-out" of joint marketing ventures, Bryan said. That same option is not included in the proposed new banking law.

Bryan said he was "disappointed, and downright mad" at the lack of consultation provided by the Clinton Administration during the final phase of negotiations.

"I told the Treasury secretary I thought we were shabbily treated," he said. "We had been told that the privacy issue was one of the top four (Clinton Administration) concerns. And then there was no consultation with us at the end. They don't have to agree with our position, but at the bare minimum we should have been consulted prior to the agreement being reached."

Bryan said there would likely be "a significant push" to get the proposals passed into law as soon as possible.

"It could go to a vote as early as this week," he said. "There are a lot of people who are pushing to see this passed, and I'm sure they want to see it done sooner rather than later."