California Assembly Passes Strongest Financial Privacy Reforms in Nation

2003-08-19

After nearly four years of debate, California lawmakers have been successful in getting the state Assembly to pass a bill giving Californians the strongest financial privacy protections in the nation. By a 76 to 1 vote yesterday, the Assembly approved Senate Bill 1, which will be considered by the Senate today. Gov. Gray Davis has already indicated that if the bill reaches his desk, he will sign it.

Under Sen. Jackie Speier’s financial privacy bill, California consumers will be able to stop the sharing of information by financial institutions with affiliates unless they meet stringent criteria. The bill requires financial institutions to obtain consent before sharing information with third parties and also establishes standards that financial institutions will have to follow to inform consumers of their privacy rights.

"(Yesterday’s) vote is a huge victory for consumers and brings California one giant step closer to enacting the toughest financial protection in the country," says Betsy Imholz, director of Consumers Union’s West Coast regional office. "Californians have been demanding greater control over their private financial information and now they are going to get it."

Californians for Privacy Now, a coalition of organizations including the American Association of Retired Persons, the California Public Interest Research Group, E-LOAN and the Consumer Federation of California, have been advocating for stronger financial protections because they believe consumers have little protection when it comes to controlling whether their financial information can be shared or sold. The weak protections leave consumers vulnerable to identity theft, aggressive marketing practices and fraud, the organization says.

The coalition has collected over 600,000 signatures from registered California voters in support of the measure and pledged to take the issue directly to voters with a March 2004 ballot measure, if the bill failed to pass the Assembly and the House.