DISADVANTAGES – CONSUMER/INTERNET – PRIVACY PROTECTION 436

DISADVANTAGES — CONSUMER/INTERNET — PRIVACY PROTECTION 436

DAMAGES FINANCIAL INSTITUTIONS AND BANKS WHEN APPLIED TO THEM

FINANCIAL SECTOR INFORMATION SHARING WILL BENEFIT CONSUMERS AND THE ECONOMY

Robert O'Harrow Jr., The Washington Post, October 31, 1999, SECTION: FINANCIAL; Pg. H01 TITLE: Reinventing the Bank; Consumer Advocates Fear Pitches by Companies Will Breach Personal Privacy // acs-EE2001

Industry officials argued that the point of reform is to make it as easy as possible for financial services companies to merge with one another and share customer names, addresses and account data. At a time when computers and information are the driving force of the nation's economy, it doesn't make sense to get in the way of industry innovation, financial services officials say.

In addition to improving services, the flow of information will enable bankers, insurers and others to cut down on costly fraud, said Charlotte Birch, a spokeswoman for the American Bankers Association.

FINANCIAL INSTITUTION MERGERS AND INFORMATION USE MAKE THE ENTIRE SYSTEM MORE EFFICIENT AND WITH BETTER SERVICES

That's because the legislation, a historic departure from Depression-era laws, will enable banks, securities firms and insurance companies to more easily merge with one another. And it will allow them to share--without customer permission--detailed account transactions, insurance details and an array of other personal information.

Industry officials believe such sharing will help them turn mountains of customer data into innovative financial products and services. They say the law catches up to trends long underway, making the system more efficient and better able to offer sophisticated services at a lower cost.

BANK AND FINANCIAL REFORM HAS ACTUALLY COME AT THE COST OF PRIVACY

The Seattle Times, March 29, 1999, SECTION: EDITORIAL; Pg. B4 TITLE: A FLEETING OPPORTUNITY FOR CONSUMER PRIVACY Web // acs-EE2001

A massive overhaul of laws on banks, securities firms and insurance companies is going forward with at least one serious flaw: inadequate protection of consumer privacy.

Among other things, the overhaul would allow companies to share financial information such as checking-account balances or the arrival of large deposits among subsidiaries.

Without protections, a life-insurance company could notify its securities affiliate that a widow has received a big check. Here comes the dinner-time call: Hello, would you like to buy something with that money?