Banks, businesses line up solidly against 2 bills
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The state Senate moved yesterday to expand the rights of consumers and employees in a growing battle over privacy. The most significant measure approved yesterday would require banks and insurance companies to get permission before sharing or selling a customer’s personal information. A separate bill would force employers to disclose whether they monitor their workers’ e-mail or Internet usage, an increasingly common practice. Both bills, however, face an uncertain future. Corporate hostility is likely to doom the bank and insurance privacy measure in the Assembly, and Gov. Gray Davis is expected to veto the e-mail bill if it reaches him. The measures are attempts by some lawmakers and advocacy groups to protect information that many consumers and employees may think is private when they apply for a loan or use a company computer to chat with a friend. Some banks, for example, compile the spending and credit habits of their customers and pass the information to sister insurance companies or telemarketing firms — something backers of the privacy legislation think should be done only with a customer’s approval. “Your personal information is a DNA code identifying who you are,” said Sen. Jackie Speier, D-Hillsborough, the bill’s author. “It ought to be protected with vigilance.” Lobbying from business, the lack of major attention from consumer groups, preoccupation with the energy crisis and voter apathy have kept the privacy issue mostly underground. But as identity theft rapidly increases in the United States, so has interest by lawmakers and consumers. Last year, the Legislature and Davis approved a new state department to monitor and research privacy issues. “I don’t think you’re ever going to get a backlash on privacy issues until individuals really start feeling the pain,” said Stephen Keating, executive director of the nonprofit Privacy Foundation. “In some cases, you’re already seeing that, in cases of identity theft.” In the case of banks and insurance companies selling personal information, many consumers are just now getting notices asking if they want to “opt out” of sharing financial data. A new federal law requires the notification. But many of the forms are confusing, filled with legal jargon, and they often look like junk mail, some lawmakers said. The forms often instruct people to call a toll-free number, where customers end up in “voice mail hell, ” said state Sen. Debra Bowen, D-Marina del Rey. Speier’s measure faces animosity in the Assembly, where the Banking and Finance Committee last week sabotaged an identical bill. It died after full- throttle opposition from scores of banking and insurance lobbyists and committee Chairman Lou Papan, D-Millbrae, who is co-founder of the Peninsula Bank of Commerce. Speier’s bill probably will be heard in Papan’s committee this month. Fred Main, a lobbyist with the California Chamber of Commerce, said federal law already provides enough protection for consumers and that Speier’s bill would shut off the sharing of critical information between businesses and consumers. “That information reduces the cost of mortgages, makes credit approval easier,” Main said, “and allows new products to be provided that the consumer may not know about.” |