Wednesday deadline for passage of bill
The San Francisco Chronicle
SACRAMENTO, CA — A breakthrough agreement to give California the strongest financial privacy legislation in the country has drawn another key endorsement from Assembly Speaker Herb Wesson but faces an uphill battle against the clock this week.
Banks and insurance companies dropped their opposition to the bill after a few changes were made, ending their four-year fight with Sen. Jackie Speier, D-Hillsborough, over the legislation.
Both houses of the Legislature must pass the bill by Wednesday morning, or backers of an initiative said they would turn in the 600,000 signatures they had gathered to put an even-stricter measure on the March ballot.
Wesson, D-Los Angeles, said he would do what he could to get the legislation through as soon as possible. Over the weekend, he sent a memo to lawmakers outlining how he plans to move the bill through three committees and onto the floor for a vote, all by the close of business today.
The bill has faced stiff opposition in the Assembly, where it has already failed in committee twice this year as a block of moderate Democrats have opposed it.
At its last hearing, only three members of the Assembly Banking Committee voted for the bill. Speier said she believed it would be “a tough challenge” to get the bill through the Assembly.
But at least one Republican who had previously opposed the bill said he was leaning toward supporting it now.
“I wanted to make sure it was a workable bill,” said Assemblyman Tony Strickland, R-Moor Park (Ventura County). “From what I have heard, it is.”
Other members who did not vote or voted against the bill were unavailable for comment, many still on vacation before lawmakers return to work today.
Gov. Gray Davis said he supported the deal reached to pass financial privacy legislation in California, saying it was time that people’s personal financial information — such as spending habits and bank balances — should not be “bought and sold like baseball cards.”
“You should control that information, and you should decide if anyone has access to it,” Davis said at a bill-signing event in Southern California last week.
Representatives of banks and insurance companies — although they have removed their opposition to the bill — aren’t necessarily enthusiastic about it.
“We believe that the measure being proposed today is a balanced measure that will provide meaningful privacy protection to consumers while also addressing the workability concerns that our members and customers had,” said Diane Colburn, lobbyist for the Personal Insurance Federation of California.
MILLIONS SPENT TO DEFEAT BILL
Banks such as Wells Fargo and Bank of America have spent millions to defeat three previous versions of the bill.
Representatives of the financial industry said they were now officially neutral on the bill, still believing it would be better to have a national law.
It is unclear how much they will push the bill, however.
“We will tell everyone that we have no objection to this measure passing,” said James Clark, lobbyist for the California Bankers Association. “We have no objection to members voting for it.”
But Speier said she expected more than simply a pass. She said she expects the financial services industry to urge key lawmakers to vote for the bill when it comes up for consideration today.
Likewise, Speier said she believed the companies who had agreed not to oppose the bill also would not sue once it becomes law.
“My expectation is that all the parties of the agreement will stand by it,” she said. “If that does not happen, I would recommend that all Californians take their money out of the bank and put it into credit unions.”
The legislation requires financial companies such as banks, brokerages and insurance companies to obtain their customers’ permission before sharing or selling information about them to other companies. It also would give consumers the right to opt out of allowing financial companies to share data among disparate divisions.
Changes made to the bill that led to the agreement include delaying the implementation date to July 1, 2004; eliminating a “mega box” option that allows consumers to check one box to get the most protection possible; and relieving companies from supplying postage-paid envelopes if they provide at least two free alternatives, such as a toll-free number or e-mail address.
The bill also eliminates district attorneys from its enforcement, instead leaving that to the attorney general or industry regulator.
One consumer group not part of the agreement criticized the deal, saying consumers should get the strongest measure, the initiative, which would make consumers have to opt in to any sharing of their information.
“If this proposal wasn’t a half a loaf, the industry wouldn’t swallow it,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights. “The only reason SB1 was brought back, obviously, is because the governor needed some popular issues to show the state of California that he deserves to keep his job.”
But both Speier and industry representatives said they believed hashing out the complex issue was better done with legislation than the initiative process.
E-mail Lynda Gledhill at [email protected]