WASHINGTON - Bank of America chairman and chief executive officer Hugh L. McColl Jr. on Tuesday lambasted tougher privacy laws, particularly efforts to require consent before information about a customer may be shared.

"The privacy issue is more complex than politicians … believe," according to the text of a speech he gave in Atlanta. "The potential for negative unintended consequences is huge."

Speaking just two days after President Clinton called for new financial privacy protections, Mr. McColl said financial services companies cannot meet customer needs without the freedom to share data internally.

"There is only one way we can know our customers and function as one company - and that is by managing information across the company," he said. "If we are prevented from sharing information internally, customers are the ones who will lose."

The Gramm-Leach-Bliley Act of 1999 requires financial companies to tell customers once a year how information collected about them is used. Customers also must be given a chance to block a bank from sharing their data with third-party marketing firms. Rules to enforce the law are expected next week and are scheduled to take effect in November.

But President Clinton, consumer advocates, and many lawmakers want to beef up the law. On Sunday, in a commencement address at Eastern Michigan University, the president said he would send legislation to Congress that would require financial companies to gain a customer's permission before sharing detailed spending data with insiders or outsiders.

Speaking at the annual meeting of the Society of American Business Editors and Writers, Mr. McColl said such an "opt in" requirement would not work. "Just ask the Census Bureau how hard it is to get people to respond to a mailing," he said.

Even the less restrictive "opt out" idea is flawed, he said. In the last two years, he said, Bank of America Corp. has had to give customers a chance to block the sharing of information that was not directly generated by the bank. "We mailed out 47 million notices to 30 million households - at tremendous cost - and less than two-tenths of 1% of our customers exercised their right to opt out," Mr. McColl said.

Mr. McColl said the "most disturbing trend in our national discourse about consumer privacy" is the assumption that banks and their customers are adversaries.

"We are spending billions of dollars to build systems and processes for our customers - to give them what they've told us they want. We're not doing it for anyone else, and we have no hidden motive," he said. "We are doing what we can to earn and keep our customers' trust."

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