AIA Applauds Defeat of Financial Privacy Legislation in California

According to the American Insurance Association (AIA), following a second lengthy hearing, the Assembly Banking Committee recently voted to kill a bill that would have interrupted the California information economy. The AIA aggressively lobbied against this measure and led the testimony in opposition to SB 773 by Jackie Speier (D-Hillsborough).

SB 773 was defeated on a vote of 5 to 3. This bill would have created an “opt-in” system for information sharing with third parties and an opt-out system for affiliates. The bill would also have given customers a right to sue their financial institutions regardless of whether or not the disclosure of information caused harm.

Financial institutions are currently working to comply with the privacy protections of the federal Gramm-Leach-Bliley Act (GLBA). The law takes effect July 1, 2001 and establishes a new system to provide customers the right to prevent disclosure of their financial information.

The AIA also noted that the Assembly Banking Committee previously voted to on May 30th to defeat a similar measure, AB 203 by Assemblywoman Hannah Beth Jackson (D-Santa Barbara).