Reprieve Offered on Privacy Plan

Marcy Gordon

Saturday, May 6, 2000 | 8:17 a.m.

WASHINGTON -- The nation's banks and other financial service businesses are getting eight months more to comply with new rules designed to protect consumers' personal data.

The rules were included in legislation enacted last November that removed Depression-era barriers and allowed banks, securities firms and insurance companies to enter each other's businesses. Published in preliminary form several months ago, they brought a deluge of written comments from affected industries and companies, which said it would be difficult to comply by the November deadline for final rules.

The agencies, including the Federal Reserve, the Treasury Department and the Federal Trade Commission, still plan to put the regulations in effect in November but will make compliance with them voluntary until July 2001, a government source, speaking on condition of anonymity, confirmed Friday.

Ed Mierzwinski, consumer program director for Public Interest Research Group, said the financial industries had won a delay "from something they knew they would have to do and which is easy to do."

The agencies' decision was first reported by American Banker, a trade publication.

The new rules give consumers the right, by written request, to stop banks, investment firms and insurers from sharing their personal data with third parties, such as telemarketers. They also apply to a panoply of "money" businesses, including consumer finance companies, department stores that issue credit cards, money transmitters and money-order businesses, debt collection agencies and credit bureaus.

Under the rules, all financial companies will have to disclose their privacy policies to customers at least once a year.

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