Calif. Financial Privacy Bill Revived

The American Insurance Association (AIA) reported that the California State Assembly has granted a rule waiver to allow the Assembly Banking Committee to reconsider a critical financial privacy measure, SB 773, by Jackie Speier (D-Hillsborough). The Assembly Banking Committee, which had previously defeated the bill in a June 25th hearing, will now consider SB 773 on July 16th. The AIA said it will continue its lobbying effort against opt-in legislation.

SB 773 was defeated on a vote of five to three, one vote short of the necessary six. The bill proposes to create an “opt-in” system for information sharing with third parties and an opt-out system for affiliates. The bill will also give customers a right to sue their financial institutions regardless of whether or not the disclosure of information caused harm.

Bill Gausewitz, AIA assistant vice president, western region, stated the financial services industry will continue to educate legislators about how the bill could backfire on consumers and warned that the state may face both information and electricity blackouts if SB 773 passes.