California's largest banking trade group, which is hoping to improve relations with a Legislature that it says has not been overly friendly to banks, plans to get closer to the lawmakers.
Next month the California Bankers Association will begin moving its headquarters, now just a stone's throw from the offices of federal and state regulators in San Francisco, to Sacramento. The group will close its small lobbying office in Sacramento and will move the 32 employees there into a larger office in a high-rise office building near the California State Capitol.
The move should be completed by February.
The CBA wants to increase its visibility - and hopefully its clout - with the Democrat-controlled Legislature, according to Janet Lamkin, a former Bank of America Corp. executive who became the group's president and chief executive in August.
Ms. Lamkin said moving from San Francisco, where the CBA has been headquartered for 110 years, to Sacramento "makes a statement about our commitment to advocacy for the industry."
Bankers say California has some of the most burdensome regulations in the country. An example that has been cited is the California Financial Information Privacy Act, the nation's toughest privacy law, which went into effect in July. It requires banks to give customers the opportunity to block, or "opt out" of, the sharing of their information with affiliates in separately regulated business lines. Banks must also get permission, or an "opt-in," before sharing customer data with most outside companies.
Many bankers opposed the law, which they say puts more restrictions on information-sharing between affiliates than the Gramm-Leach-Bliley Act of 1999. Bankers also say the opt-in provision is much more onerous than the federal law's opt-out.
In April, the American Bankers Association, the Consumer Bankers Association, and the Financial Services Roundtable filed a lawsuit saying that the Fair Credit Reporting Act's preemption of state laws on affiliate information-sharing invalidated the portion of the California law limiting it. In July the U.S. District Court for the Eastern District of California upheld the state law and said that the FCRA applied to how banks shared credit reports, not other customer information. The trade groups are appealing the decision.
The California Legislature is expected to consider other bills that could affect the industry when it convenes in January. One would make tellers subject to jail sentences for not reporting suspected elderly financial abuse to law enforcement officials or the state's Adult Protective Services agency. That bill was introduced in the last session, which ended Aug. 31, but it has been held over until next year's session.
Ms. Lamkin said the CBA is preparing for that session by developing alternatives for legislators to consider. For example, it plans to sponsor a bill similar to laws in other states that would require banks to set up training for tellers on how to spot and report financial abuse of seniors.
The group also wants to increase its influence in the process of passing business-friendly laws, she said.
The prospects look better for business interests in Sacramento, because Gov. Arnold Schwarzenegger, a Republican, has made it a top priority of his administration to make California more amenable to industry and small business, she said.
