Fw: Your personal financial privacy and new law

----- Original Message -----
From: "Gina Rodgers" <gsrodger@yahoo.com<
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Sent: Wednesday, April 04, 2001 11:07 AM
Subject: Your personal financial privacy and new law

< read me! and don't throw away notices from your fin. institutions until
< you read them!!!
< gina
<
<
< Excerpt from Business Week:
< < In coming weeks, households will receive a torrent of notices from every
< < financial institution with which they do business. Many will dump the
< < deluge as so much junk. If they do, they risk throwing away their right
< < to protect their privacy over vast swaths of their personal and
< < financial information from name and address to details of assets,
< < income, and debts.<BR<
< < Under new rules now going into effect, financial institutions must
< < disclose what information they collect about their customers, and how
< < they share it, both with affiliates and outside firms. Consumers can't
< < stop in-house sharing, such as by a bank with its brokerage arm, but
< < they must be offered the chance to opt out of sharing with third
< < parties. Hence, the avalanche of mail.<BR<
< < If customers don't object, financial institutions
< < can release customer account numbers to outside marketers or partners
< < who run programs such as air-miles. The rules don't require institutions
< < to make sure that third parties, handling everything from preparing
< < account statements to marketing, keep consumer information under wraps.
< < They don't protect information about people in employee benefit plans,
< < such as 401(k)s, administered by financial companies. And they allow the
< < sharing of extensive customer information that, while not personally
< < identified, can be merged easily with other databases to create detailed
< < portraits of consumers' financial dealings.<BR<
< < Until now, information sharing has been largely unregulated, leaving
< < individual companies to decide how much, or little, they would protect
< < privacy. ``[The new law] extends some important additional protections
< < to consumers about their personal information,'' says Julie L. Williams,
< < chief counsel to the Treasury Dept.'s Office of the Comptroller of the
< < Currency, who played a key role in writing the rules.<BR<
< < But privacy advocates complain the law permits an Orwellian intrusion
< < into consumers' financial lives. Short of an outright ban on sharing of
< < consumer information, they wanted a much stronger opt-in rule that would
< < have prevented information-sharing unless customers positively agreed.
< < ``Consumers have no control over sharing most of their information most
< < of the time,'' complains Ed Mierzwinski, consumer director for the U.S.
< < Public Interest Research Group, a Washington watchdog group.<BR<
< < The rules are even leakier than they appear. For example, financial
< < institutions must protect private information. But if they ``reasonably
< < believe'' that information is publicly available, the data can be shared
< < with third parties. So if information has been published say in a
< < magazine or on a Web site--even if access is restricted by a
< < password--then it's no longer protected. Some joint account holders
< < might be in a strange situation: Though all holders have the right to
< < opt out of disclosure of their information, the rules say financial
< < institutions need send only one notice per account. And employees in
< < benefit plans don't get the chance to protect themselves, as their
< < employers, not they, are considered the customers.<BR<
< < If the new arrangements sound as though they were designed to please
< < banks, brokers, and insurers, that's because they largely were. They are
< < the by-product of a hugely expensive, two decades-long campaign by the
< < financial industry to sweep away Depression-era laws that forbade
< < mergers among banks, brokers, and insurers. The resulting
< < Gramm-Leach-Bliley Act, signed in Nov., 1999, aimed to legalize one-stop
< < financial conglomerates such as Citigroup. But it also laid down the
< < parameters for privacy protection.<BR<
< < Financial institutions for the most part aren't adopting completely
< < new privacy policies. Instead, they're codifying their current practice
< < and telling customers about it. Atlanta's SunTrust Banks Inc., for
< < example, uses outside firms to provide services such as credit cards and
< < insurance. If customers don't object, the bank can give suppliers their
< < information, including name, Social Security number, assets, income,
< < account balance, and details of transactions with itself or its
< < affiliates. Some firms, like New York's J.P. Morgan Chase & Co., go
< < further. Its policy allows customer contact information--names,
< < addresses, and phone numbers--to be shared with nonfinancial companies
< < offering travel programs, dental or legal services, and the like.<BR<
< < A few institutions, leery of consumer backlash, have decided not to
< < share information with outsiders. Bank of America Corp., for instance,
< < will handle all customer contact itself if it enters joint marketing
< < projects with third parties.<BR<
< < Still, most of the industry is intent on defending the rules. So far,
< < it has been able to protect its big investment in getting the law
< < changed. If customers don't react to the notices they're now receiving,
< < that investment will be even safer.<BR<
<
<
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