Senate denies privacy motion

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Shelby leads bipartisan opposition to amendment, despite revelation that his Social Security number had been purchased over Internet

Mobile Register (Alabama)

WASHINGTON — As part of a campaign to dramatize the failure of existing privacy safeguards, a California consumer group announced Monday that it had purchased U.S. Sen. Richard Shelby’s Social Security number over the Internet for $30.

Undeterred by the stunt, Shelby led a successful bipartisan charge Tuesday against what consumer advocates called the most significant privacy protection legislation in years.

By a 70-24 vote, the Senate steam rolled an amendment that would have allowed consumers to block corporations from sharing their personal financial information with affiliated companies in other lines of business. U.S. Sen. Jeff Sessions, R-Mobile, joined Shelby, R-Tuscaloosa, in opposing the measure.

U.S. Sens. Dianne Feinstein and Barbara Boxer, both California Democrats, had sought approval for their “do not share” amendment during debate over an extension of the Fair Credit Reporting Act, which provides much of the legal underpinning for the nation’s credit system.

Supporters of the amendment argued that consumers urgently need more control over sensitive financial information — particularly since Congress decided in 1999 to erase long-standing barriers that had kept banks, securities firms and insurance companies from merging.

Since then, those businesses have tended to combine into ever-larger conglomerates. The result is that they can create enormous files that detail everything from customers’ charitable contributions to their prescription drug purchases, Feinstein said on the Senate floor Tuesday.

Hypothetically, for example, a life insurance company could refuse to cover someone because credit card purchases showed that the applicant was a mountain climber or had bought a gun, she said.

“And you have no way to prevent the company from sharing your most intimate personal information,” Feinstein said.

Banks and other segments of the financial services industry argued information trading allows them to serve customers better. They had lobbied fiercely against the amendment.

In late September, the Senate banking committee, which Shelby chairs, had unanimously passed its version of the fair credit reporting bill without giving consumers the right to stop information sharing.

The bill would also bar states from passing tougher limits on their own. That provision could undermine a California law that provided the model for the FeinsteiBoxer amendment.

As the bill’s sponsor, Shelby on Tuesday repeated earlier assertions that the measure strikes “a careful balance between ensuring the efficient operation of our markets and protecting the rights of consumers.”

He contented that the Feinstein/Boxer amendment would favor some types of businesses over others, and added that existing federal laws already furnish safeguards for personal data. In financial circles, that data is known as “transaction and experience information.”

“I believe the bottom line … is that consumers already have access to and rights concerning transaction and experience information right now,” Shelby told his colleagues Tuesday afternoon.

Earlier in the day, he also noted that his measure contains provisions that consumer groups applaud, such as access to a free credit report and tougher penalties against identity theft. It also allows customers to stop companies from using affiliate information to pitch products to them.

The Senate was still debating other provisions in Shelby’s version of the fair credit bill Tuesday evening. Once the complete bill passes the Senate, it will have to be reconcil ed with a House version that also lacks restrictions on information sharing by affiliated companies.

While disappointed, consumer organizations were not surprised by the defeat of the FeinsteiBoxer amendment. They predicted, however, that consumers will not drop the issue so easily.

“It’s a tough fight, but it’s the right fight,” said Jerry Flanagan of the California-based Foundation for Taxpayer & Consumer Rights. On Monday, the foundation announced that it had legally bought Shelby’s Social Security number over the Internet, as well as the numbers for House Speaker Dennis Hastert, R-Ill., and U.S. Sen. Paul Sarbanes of Maryland, the top Democrat on the banking committee.

Although Flanagan acknowledged that the problem of Social Security number theft is not addressed by the fair credit bill, information sharing makes it easier for marketers and identity thieves to get access to those numbers, he said.

Attempts to reach representatives of banking and other financial services trade groups were unsuccessful early Tuesday evening.

On Capitol Hill, Shelby has long been known as a champion of privacy rights. But his largest single campaign contributor over the last five years has been Citigroup Inc., the New York-based conglomerate that ranks among the world’s largest financial services companies. Other banks and financial services companies have given Shelby hundreds of thousands of dollars in additional contributions through employees and political action committees, according to the Center for Responsive Politics, a Washington, D.C., watchdog group.

“What this shows is that the Senate’s leading privacy advocate has been influenced by bank contributions,” Flanagan said.

Andrew Gray, a Shelby spokesman on banking committee issues, had no response to that allegation Tuesday. Gray also did not respond directly to a question from the Mobile Register about the role of Stewart Hall, a former top Shelby aide who registered as a lobbyist for Citigroup in August, according to a filing in the Senate public records office.

The filing does not make clear whether Hall would be working for Citigroup on the information sharing issue. Asked whether Hall had lobbied either Shelby or the banking committee staff on that subject, Gray provided a prepared statement saying the committee “has been receptive” to meeting with any individual or group with an interest in the bill, “including consumer interests, government officials and representatives from the business community.”

Consumer Watchdog
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