Bank Customers' Privacy Stressed http://www.latimes.com/sbin/iawrapper?NS-search-set=/36394/aaaa002RZ3941c2& NS-doc-offset=1&NS-adv-search=1& Consumers: U.S. official tells gathering that pressure is building for regulation because some banks are doing a poor job. >From Associated Press VENTURA, Fla.--Commercial banks must do more to protect their customers' privacy or submit to federal regulation that would force them to do so, acting comptroller of the currency Julie L. Williams said Monday. Addressing a meeting of the Consumer Bankers Assn., Williams said her office has found that while some banks do a good job of protecting confidential financial information, many do not. To the extent that banks are not living up to customers' expectations for privacy, "pressure will continue to build for government action that could lead to restrictions on your ability to use precious information resources()," Williams told 250 top-level consumer bankers gathered here for the final day of a four-day conference. Privacy has emerged as a major issue for banks and regulators as the wave of financial industry mergers has been largely driven by companies' ability to compile vast amounts of personal financial data that can be shared between newly merged operations. The banking operations of the new financial services giant Citigroup have every intention of sharing their customer information with Travelers Group() insurance operations. Bank customers are increasingly worried about data sharing within companies and how easy it is for people outside their bank to obtain private information about them. In congressional hearings over the summer, legislators and regulators learn ed the ease with which information brokers and scam artists were able to pry loose personal data from bank customer service personnel. Congress passed legislation in the recent session that criminalizes identity theft, gives victims the ability to seek restitution and establishes in the Federal Trade Commission a central clearinghouse to receive complaints and assist victims. That bill is awaiting President Clinton's signature. The Fair Credit Reporting Act requires banks to inform their customers how their data are being used and that the customers may instruct their banks to not share the data within the company. But, Williams said, too many banks are not complying with the spirit or the letter of that law. Williams encouraged banks to adopt voluntary privacy guidelines that have been suggested by her office and endorsed by banking groups such as the Consumer Bankers Assn. Further, she said, banks need to make sure their customer service personnel know about the guidelines and monitor their operations to make sure the guidelines are followed. Joseph Belew, president of the association, asked Williams whether non-bank financial service companies such as insurers and brokerages that are not federally regulated will be required to comply with the same privacy standards. Implying that companies that don't have to abide by the guidelines could get a competitive edge, Belew said, "I'm sure I don't have to explain to you the realities of the competitive marketplace." Williams responded by saying bankers should view the safeguarding of private information as a marketing asset, not a liability. "Doing well conspicuously on privacy ought to be something that you can turn into a positive marketing tool," she said. -o- Subscribe: mail majordomot_private with "subscribe isn". Today's ISN Sponsor: Repent Security Incorporated [www.repsec.com]
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