Banks Attack Tough California Privacy Law

September 13, 2004

• RFID Eyed as Anti-Shoplifting Tool • Internet Providers Admit to Monitoring Customers' Web Surfing • Big Brother Hitching A Ride in California? • GAO: Government Can Do More to Protect Personal Data • US Search Agrees to Stop Selling Private Credit Data • TSA Site Left Passenger Data Exposed To ID Theft • Connecticut Governor Wants 'Opt Out' For Online Directories • Verizon Gave Customer Data To Government Without Court Orders • House Democrats Probe Warrantless Surveillance --- • More Privacy News ...

A suit making its way through the court system seeks to overturn a California law that provides strong privacy rights to consumers. Banks and other financial services companies are suing to invalidate a 2003 law, the California Financial Information Privacy Act, commonly known as "SB1."

The bankers' association argues that the federal Fair Credit Reporting Act supercedes the California protections. However, a coalition of consumer and civil liberties groups representing 41 million individuals, has filed a brief in support of the law, saying it protects against identity theft and fraud.

SB1 is considered by many to provide the strongest financial privacy protection in the U.S. It allows customers to "opt-out" of information-sharing practices between affiliated institutions, companies that have common ownership. SB 1 also bars financial institutions from sharing information about consumers with nonaffiliated third parties unless an individual gives his or her express "opt in" consent.

In April 2004, the American Bankers Association, the Financial Services Roundtable and the Consumer Bankers Association filed suit arguing that SB 1 conflicts with the federal Fair Credit Reporting Act (FCRA). As interpreted by the banking industry, the FCRA imposes a preemptive ceiling on state privacy statutes, thereby preventing any state or local regulation concerning affiliate sharing of consumer information.

A judge has already ruled otherwise, saying federal legislation expressly allows states to erect stronger financial privacy protections. In late July the banking institutions appealed, with the case now before the Ninth Circuit Court of Appeals.

Report Your Experience
If you've had a bad experience -- or a good one -- with a consumer product or service, we'd like to hear about it. All complaints are reviewed by class action attorneys and are considered for publication on our site. Knowledge is power! Help spread the word. File your consumer report now.

Back to the top |

Terms of Use Your use of this site constitutes acceptance of the Terms of Use

Advertisements on this site are placed and controlled by outside advertising networks. ConsumerAffairs.com does not evaluate or endorse the products and services advertised. See the FAQ for more information.

Company Response Welcome If complaints about your company appear on our site, we welcome your response. Please see the Response Form for more information.

For more information, see the FAQ and privacy policy. The information on this Web site is general in nature and is not intended as a substitute for competent legal advice.  ConsumerAffairs.com Inc. makes no representation as to the accuracy of the information herein provided and assumes no liability for any damages or loss arising from the use thereof. 

Copyright © 2003-2009 ConsumerAffairs.com Inc.  All Rights Reserved.    The contents of this site may not be republished, reprinted, rewritten or recirculated without written permission.