San Jose Mercury News
SACRAMENTO — An Assembly committee on Tuesday rejected, for the second time in a month, a long-sought, heavily lobbied bill that would give greater privacy protections to consumers’ financial records.
Consumer groups and the bill’s author, Sen. Jackie Speier, D-Daly City, said they instead will push for an initiative on next year’s ballot.
“The bill has almost become a sideshow at this point, because it’s so watered down” in a futile attempt to gain legislative support, said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights.
It faced strong opposition from the financial community, which said it would cost too much to implement and would not be flexible enough to work with all companies. By Speier’s count, opponents spent more than $20 million the last four years to kill the bill.
It’s the fourth time the Assembly rejected the measure, which was backed by Senate leader John Burton, D-San Francisco. Speier added 11 amendments Tuesday in an attempt to satisfy various interests.
“I don’t know what more we can do,” Speier said.
She called on Banking and Finance Committee members to honor what she said was an agreement with Democratic leaders. Committee members said they knew of no such deal, and Assemblyman Juan Vargas, D-San Diego, accused Speier of coming “very dangerously close to trading votes” in exchange for support for her measure – an allegation she denied.
Speier’s bill would specify when banks, insurance companies and other financial institutions could sell or share private information about their customers.
In some cases the bill would require the companies to get explicit permission from customers before sharing or selling information about them. In others, it would require the companies to give customers the opportunity to block release of their financial information. Those that didn’t request privacy wouldn’t have their information protected.
Despite the amendments, the measure received just three of the seven votes it needed on the 12-member committee, which also rejected the bill last month. Two members opposed the bill and the others didn’t vote.
FTCR angered lawmakers by posting on its Web site the first four numbers of the Social Security numbers of the eight committee members who voted against the bill in June.
The foundation won’t release more financial details despite Tuesday’s vote. “I think we’ve made our point,” said Flanagan. “Everybody is equally in danger of losing privacy.”
Anticipating the Speier bill would fail, supporters of a financial privacy initiative said they have collected more than 300,000 of the nearly 374,000 valid signatures they need to put a stricter measure on the March 2004 ballot.
The initiative campaign, financed by Chris Larsen, chairman and chief executive officer of E-Loan, said Republican political strategists Dan Schnur and Rob Stutzman will run the campaign to create what backers call the nation’s strongest financial privacy protection measure.
Meanwhile Tuesday, the same committee approved, 9-0, a bill by Sen. Debra Bowen, D-Marina del Rey, prohibiting government agencies, including public universities, from using Social Security numbers on identification cards.
Bowen’s bill also requires banks and retailers to honor security alerts that consumers place on their credit reports. Companies would be required to call customers before approving loans and lines of credit in their name.
It also approved, 8-0, a measure by Sen. Liz Figueroa, D-Sunol, requiring businesses that sell personal information to direct marketers to provide customers with a written disclosure, upon request. And it approved, 7-3, a Figueroa bill regulating companies’ use of information contained in magnetic strips on drivers’ licenses.
Also Tuesday, Gov. Gray Davis signed a bill by Assemblywoman Fran Pavley, D-Los Angeles, requiring creditors to take reasonable steps to verify a consumer ‘s identifying information when inconsistencies are found on their credit report.
On the Net: Read SB1, SB25, SB27, SB602 and AB1610 at http://www.sen.ca.gov