For Immediate Release
Coalition Urges Obama to Defend California Financial Privacy Law
SACRAMENTO, Calif. - A coalition of privacy groups today urged the Obama Administration
to defend California's
landmark financial privacy law against the banking industry's legal efforts
to overturn it. A copy of the coalition's letter to the President is
The US Supreme Court is currently considering taking up the banks'
appeal of a 2008 decision by the 9th Circuit Court upholding almost
all provisions of the Financial Information Privacy Act of 2003 (SB 1 -
Speier). On March 9th, the Supreme Court invited the Obama Administration to
voice its opinion on the California
privacy law. The case is American Bankers
Association v. Brown, Supreme Court Docket Number 08-730.
Letters to President Obama and Solicitor General Elena Kagan were signed
by The Consumer Federation of California, Privacy Rights Clearinghouse, CALPIRG,
Consumers Union, Consumer Action, The Older Women's League, The
California Alliance for Retired Americans, and Chris Larsen, CEO, Prosper
Marketplace, and founder of Californians for Privacy Now, the original
organization that spearheaded a 2003 ballot initiative campaign that turned
fierce banking industry opposition into acquiescence with SB 1.
"This represents a defining moment for privacy rights" the
letter states. "We ask you to stand with consumers by telling the Supreme
Court to reject the banks' appeal in Brown."
Privacy advocates support the State of California's position in this legal
matter, which is that there is no merit to the appeal filed by the American
Bankers Association. At issue is whether federal laws preempt portions of California law that
regulate the sharing of private consumer information within a financial
institution's family of affiliates.
The 9th Circuit reversed a lower court and reinstated the
right of California
consumers to stop all sharing of personal information within a family of
affiliated companies, as long as it is not related to credit worthiness. This
ruling is significant because some large financial institutions have hundreds
or even thousands of affiliates. In 2003, Citigroup furnished state lawmakers a
list of 3,000 affiliated entities around the world, with which sharing of
personal information was completely unregulated at that time.
This case provides the Obama Administration the opportunity to reveal
its views both on personal privacy protection and on the necessary role of the
states in protecting consumers from unfair practices in the banking industry in
the absence of adequate federal regulation. The letter points out that California's
financial privacy law has proven a successful model for the nation, and that it
fills a regulatory vacuum at the federal level.
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