Bryan battles with banks, Internet firms over privacy

Benjamin Grove

Tuesday, May 23, 2000 | 10:53 a.m.

WASHINGTON -- Sen. Richard Bryan, D-Nev., wanted a straight answer from an Internet executive at a hearing last week.

Who owns a person's private information such as credit card numbers, Social Security number, reading habits, health history? The person -- or the Internet websites that person shares information with?

Josh Isay stumbled through a response. His company, DoubleClick, distributes 5 billion ads a month on the Internet, many targeted at users based on personal profiles.

The website, Isay finally said, "has a right to that information."

Bryan, who is retiring from the Senate after this session, has made the issue of privacy one of his top priorities. Privacy has become a critical issue in a fast-moving world of bank mergers, technology advances and Internet commerce, Bryan said.

"It's a complex field we're talking about, and the technology, in terms of broad public usage, is very, very new," Bryan said. "So the questions of what are the impacts of that in terms of privacy are important questions for Congress to answer."

To that end Bryan and Sen. Richard Shelby, R-Ala., this year launched the Congressional Privacy Caucus, a panel charged with examining the privacy issues emerging in a new economy.

The Internet poses some of the newest problems, Bryan said. One computer expert last week explained to the caucus how invisible "webbugs" often track the sites users visit and when they visit them. He explained how "cookies" keep records of where users tread on the Internet.

"It's clear, to me at least, that for some Internet providers, the be-all and end-all is the commerce -- their goal is to make money," Bryan said. "And from my point of view, the American public feels threatened and intimidated by this loss of privacy."

Bryan introduced a bill today that would require website operators to get the consent of consumers before using their personal information.

Bryan also frets about financial privacy. He has tried to take on the powerful banking industry, pressing for strict new laws that prevent banks, brokerage houses, insurance companies and marketers from swapping people's information "like a bag of Halloween candy."

"I had an assumption, as I think the American public does, that this information, with respect to personal bank accounts, was deemed private. As we looked at it a little bit more, we found this was a widespread practice," Bryan said.

Bryan found the more he pushed, the more banks resisted.

"I became even more suspicious about what was going on," Bryan said. "This is a cash cow for the financial services industry."

Bryan watched in frustration last year as Congress passed a sweeping new banking bill. The bill banned banks from selling customers information without getting customers' permission.

But Bryan said the bill still allows banks to trade information with affiliates -- banks can pass along information to affiliated mortgage lenders or insurance companies, for instance.

And the bill has a loophole that allows banks to sell information to non-affiliated third parties -- such as a telemarketer or other sales outfit -- as long as the bank and the third party have a "joint marketing agreement," Bryan said.

"The provision that purports to offer a protection is largely illusory," Bryan said.

Bryan's latest tactic was to go after Nevada's banks. He wrote them letters last month urging them to adopt stricter standards. He encouraged them to never share information, such as credit card buying habits, with a third party unless the customer gave the bank consent.

No banks have agreed so far, Bryan said.

"The way we feel is our customers benefit from information sharing between affiliates," said Catherine Pulley, spokeswoman for the industry's leading trade group, the American Bankers Association. "They get better products, better services, better discounts. Our customers want sharing between a family of companies. They are very comfortable with that."

She added, "Sen. Bryan needs to let the law work."

Nevada bank officials said they also disagree with Bryan.

Wells Fargo Vice President Kirk Clausen and other state bankers met with Bryan a month ago. Clausen said Wells Fargo sells information to third parties only with customer consent.

"The bottom line is Sen. Bryan wants to protect privacy of customers," Clausen said. "That's our same goal. It's probably now an issue of how we get there that the differences occur."

Bryan said passing tougher privacy protection laws this year -- his last -- will be difficult. He faces familiar battles this session with opponents in the Senate and against the industry.

"What's brought this all to the floor is the technology," Bryan said. "Now it's very, very easy to access this information. And it's very, very profitable."