June 23, 1999 The Honorable William J. Clinton The White House 1600 Pennsylvania Avenue, NW Washington, DC 20500 Dear Mr. President: We are writing to urge you to take steps that will ensure that legislation to modernize the financial services industry contains strong privacy protections for consumers. As you stated earlier this year, it is clear that we need better legal standards for financial privacy protection. At a minimum, final legislation should not be signed unless it includes the bi-partisan financial privacy opt-out provision adopted by the Commerce Committee on a voice vote. That provision would protect consumers whenever personal information is used for any secondary purpose, both inside and outside a financial institution. We believe that it is critical that the Administration reiterate its financial privacy position to Congress before the House takes further action on HR 10. Despite the strong Commerce Committee vote, the Rules Committee has received a Committee Print of HR 10 that does not not come close to, and is apparently designed to circumvent, the minimum standards for privacy protection that you outlined -- restated last week by Chief Privacy Counselor Peter Swire, when he said that "The President's position has been 'opt out' for both affiliates and third parties." .(American Banker) Ideally, we would prefer the Commerce language to be strengthened to include a consumer private right of action and also an opt-in for all third party sharing and selling. In addition, we are very concerned, as the Commerce Democrats point out in their Additional Views to the HR 10 Committee Report, that neither committeežs work on medical privacy is adequate, and would in fact roll back current state laws. Unless strong rules are put in place now, Americans stand to lose another piece of what little control they have over their sensitive financial information. Numerous surveys, such as the 1999 AARP survey which found that 92% of its members would mind if a company they did business with sold information about them, and the overwhelming public rejection of the proposed "Know Your Customer" rules, demonstrate that consumers are becoming increasingly concerned about the privacy of their financial information. Many consumers have complained to our organizations about unfair or poorly disclosed sharing of information among corporate affiliates. Others may not even be aware of the information collection practices frequently used to create profiles on them. Financial modernization will foster the continued development of increasingly complex networks of personal financial information. Consumers' privacy concerns are exacerbated as corporations merge, electronic commerce grows, the use of the Internet expands, and personal information is increasingly viewed as a commodity. Financial services modernization is likely to foster all of these trends. If the current financial services modernization bill moves forward it will do so without protecting consumers' privacy. It is critical that Congress act now. Privacy and confidentiality must not be an afterthought in the overhaul of our financial system. It is inexcusable for financial services' modernization legislation to pass through Congress without strong privacy provisions. We urge you to tell Congress to maintain the protections for personal privacy in H.R. 10 as passed by the Commerce Committee. Without such protections we believe that consumers will pay for financial services modernization with their privacy. /s/ Deirdre Mulligan, Staff Counsel Center for Democracy and Technology /s/ Ram Avrahami, Director The Named Inc. /s/ Ken McEldowney, Executive Director Consumer Action /s/ Beth Givens, Director Privacy Rights Clearinghouse /s/ Jean Ann Fox Consumer Federation of America /s/ Edmund Mierzwinski, Consumer Program Director U.S. Public Interest Research Group (PIRG) /s/ Mary Griffin Consumers Union /s/ Jason Catlett Junkbusters cc: Treasury OCC Fed Reserve FDIC OTS David Beier The White House Peter Swire Office of Management and Budget Tom Kalil National Economic Council Larry Irving U.S. Department of Commerce Secretary William Daley U.S. Department of Commerce Eliot Maxwell U.S. Department of Commerce