WASHINGTON - With state-by-state fights looming over new privacy laws, five financial industry trade groups have formed a unit to coordinate their defense.

The Financial Services Coordinating Council - representing the banking, insurance, and securities industries - this week unveiled its Privacy Project, which will track privacy bills in the states and provide research and legal advice to local lobbyists. The council will also try to influence federal regulators as they write rules implementing consumer privacy protections included in the new financial reform law.

A final budget for the project has not been set, but sources said the council is expected to spend more than $1 million on the effort, including hiring an executive director.

Privacy is expected to be one of the hottest consumer financial topics over the next several years, inflamed in part by a provision in the reform law that lets states enact stricter privacy statutes. Experts remain divided over how widespread legislative efforts will be next year, but industry lobbyists are gearing up for fights in 10 to 20 states.

The project's greatest benefit, officials said, will be helping the industries speak with a unified voice - something they say they learned the value of while lobbying for the reform law.

"It will be able to leverage our resources considerably," said Edward L. Yingling, chief lobbyist for the American Bankers Association. "We will present a united approach among the entire financial services industry, and that is going to be very important."

Each industry operates differently at the state level. The ABA has relationships with state banking associations that customarily take the lead on issues. Other members of the council, such as the American Insurance Association or the Securities Industry Association, work through regional lobbyists or counsels in the states. National trade group officials stressed that the Privacy Project would not replace these state representatives but would serve as a resource for them.

For instance, the project plans to issue a paper on the benefits of information sharing for consumers that lobbyists could share with state lawmakers and regulators. It would provide experts to give speeches in local communities or testify at hearings. It would also help analyze how proposed state laws would jibe with the federal law, coordinate public relations efforts, and help state lobbyists form alliances across industries.

"Our operating assumption is that we have good lobbyists in these states," Mr. Yingling said. "Our primary mission is to give them the materials they need to make their case."

Trade groups are trying to help their members cope with many other new challenges spawned by the reform law. The ABA said Thursday that it has created a Center for Securities, Trust, and Investments to help banks take advantage of new securities powers. The center will be led by Sarah A. Miller, general counsel for the ABA Securities Association.

But privacy will probably be the most controversial issue. The project's primary message to the states is already clear: proceed cautiously and do not go beyond the federal law's provisions, which will take effect late next year and require financial institutions to disclose privacy policies annually and let customers block the sharing of information with most third parties.

"We think these regulations are adequate," said Leigh Ann Pusey, the American Insurance Association's senior vice president of federal affairs. "If there are a lot of violations, then we can come back and see how to address that."

The five members of the coordinating council are the American Council of Life Insurers, the Investment Company Institute, the ABA, the Securities Industry Association, and the American Insurance Association.

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