Consumer Group Warns Gov. Davis Should Not Deliver Half-Loaf On Privacy To Save Himself From Recall

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Consumer Group Warns Gov. Davis Should Not Deliver Half-Loaf On Privacy To Save Himself From Recall

8/14/03 9:27:00 AM

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To: National and City Desks

Contact: Jerry Flanagan, 415-497-1710 (cell), or Jamie Court, 310-392-0522 ext. 327; both of the Foundation for Taxpayer and Consumer Rights

SACRAMENTO, Calif., Aug. 14 /U.S. Newswire/ -- The Foundation for Taxpayer and Consumer Rights' Northern California Director Jerry Flanagan will hold a press conference at 10 a.m. outside of the Governor's Press Room 1190 in the California State Capitol to challenge Governor Davis not to rush through a weakened financial privacy bill which would derail a stronger March ballot initiative on the issue simply to save face with the voters. Governor Davis is schedule to announce the deal with Senator Jackie Speier at 10:30 am in the Governor's Press Room 1190.

In a letter sent yesterday to Governor Davis (below) the Foundation for Taxpayer and Consumer Rights said: "Saving yourself from being recalled should not be the goal of this legislation":

August 13, 2003

Governor Gray Davis State Capitol Sacramento, CA 95814 VIA FACSIMILE

Don't Give Californians More Illusions About Their Privacy In Order To Save Yourself From The Recall

Governor Davis:

Voters do apparently influence you. We understand that your office has proposed a deal to pass financial privacy legislation in the next week before 600,000 signatures are turned in for a stronger ballot initiative on the issue which would dramatize your lack of leadership.

The financial privacy protections you deliver must be real. Saving yourself from being recalled should not be the goal of this legislation. Rather, individuals must truly be protected from corporations selling their private information to third parties and affiliates without consent. Californians have already been victimized by the fine print of financial services contracts. They must not be duped by the fine print of eleventh hour legislation designed to boost your chances of surviving a recall.

More than 600,000 Californians have indicated their desire for strong financial privacy protections by signing petitions to qualify the ballot initiative since you and the Legislature could not get the job done. All Californians deserve the right to vote to protect their privacy if the Legislature cannot deliver a comparable safeguard.

There can be many rationalizations for why one could accept a weaker compromise proposal, but the ultimate reason not to is that the voters are almost certain to approve a far stronger standard and that the courts are likely to test any law.

It would be yet another betrayal of the people of California to support anything but the most protective privacy policy.

The failed SB 1 apparently has been revived in order to give you a platform to fight the recall. It has already been watered-down. Now we understand that you want to provide new give-aways to banks and insurers, such as allowing the Bush administration to be the final arbiter of the consent form. That is like giving the financial services industry a blank check. We understand that the new bill also precludes District Attorneys from enforcing the law, leaving that job up to bureaucrats -- not a real protection.

Any new law should be at least as protective as the ballot initiative by requiring a clear written "opt-in" from consumers before banks and other financial institutions sell private financial information to affiliates or third party businesses. The compromise bill you are considering must not contain any exemptions that allow the largest banks to share personal information without consent.

The history of this bill and your involvement in it has been marked by deference to financial services industry lobbyists who have spent more than $20 million over the last several years to kill privacy protections.

On June 4, you and Senator Speier announced a compromise agreement on the financial privacy legislation after 4 years of opposition from your administration. When that compromise language was released to the public two days later, it contained a half dozen bank-friendly loopholes -- including allowing banks to obtain a consumer's consent to share private information over the telephone or to hide consent agreements in financial contracts.

In response to our objections, Senator Speier closed the worst of these loopholes before the final hearing in the Assembly Banking and Finance Committee. But your refusal to get personally involved in the debate sealed the bill's death warrant.

Your historical indifference to the loss of privacy by the public is why we released the first three digits of your Social Security number after purchasing it on the Internet for $26 -- to show how everyone's private information is at risk without better laws.

If you want to show the voters you truly support protecting the individual's financial privacy, produce a bill that is as strong as the ballot initiative voters will decide on, or lend your personal and financial support to that initiative.

It is far better to support a real solution, even if it would be adopted after the recall is complete, than to give Californians yet another illusion about their own privacy.

Sincerely,

Jamie Court

Jerry Flanagan

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http://www.consumerwatchdog.org/insurance/rp/rp003541.pdf

The Foundation for Taxpayer and Consumer Rights is a non-profit and non-partisan consumer advocacy organization. For more information, visit us on the web at http://www.consumerwatchdog.org.