The industry needs to move away from a "compliance" mentality when it comes to privacy issues, says Office of the Comptroller of the Currency Chief Counsel Julie L. Williams.
"Don't just do what the law requires you to do," she said Thursday at an electronic commerce conference sponsored by Glasser Legal Works, Little Falls, N.J.
She warned that not being proactive will have consequences.
"To the extent that business is perceived as not living up to customer expectations regarding the use and safekeeping of personal information, pressure will continue to build for government action could lead to additional restrictions on banks' ability to use precious information resources," Ms. Williams said.
Rep. Bill McCollum, R-Fla., launched his bid for the Senate last week. The Orlando lawmaker is running for the seat being vacated by fellow Florida Republican Connie Mack.
If Rep. McCollum-the No. 2 Republican on the House Banking Committee- wins, a power struggle for the committee chairmanship could ensue.
That's because Rep. Jim Leach says he will step down as chairman after the 2000 session because the Republican party promised in 1994 that committee chiefs would serve only three sessions. Rep. Marge Roukema, R- N.J., is next in line based on seniority, but other Republicans could challenge her.
However, Democrats could recapture the House and elevate Rep. John J. LaFalce, the committee's ranking minority member, to the chairmanship.
Andrew C. Hove Jr., vice chairman of the Federal Deposit Insurance Corp., said the recent know-your-customer flap shows that bankers need to be cautious about sharing customer information, even for marketing purposes.
"We just received a quarter of a million comments from the American people," nearly all negative, he told the National Bankers Association and the American League of Financial Institutions last week. "Deciding how and when to share ... information is crucial."
Mr. Hove announced several FDIC initiatives on privacy, including a joint effort with the Commerce and Treasury departments to help U.S. firms comply with European privacy requirements, and the formation of an internal working committee on privacy, headed by associate policy director Christie A. Sciacca.
Mr. Hove also urged minority-owned banks to remain "vigilant" about asset quality. He cited FDIC data that show minority-owned banks as a group have a higher-than-average ratio of nonperforming loans.
Consumers cannot afford to remain outside the banking system, according to Comptroller of the Currency John D. Hawke Jr. In a pitch for activists to encourage inner-city consumers to use banks, Mr. Hawke said it is becoming "virtually impossible" to buy a plane ticket, rent a car, or check out a video without a credit card.
"Educating consumers about the benefits of becoming participants in the financial system-and the rising costs of not participating-is vitally important in achieving our nation's economic and social goals," he told the National Community Reinvestment Coalition.
Speaking to the same group, FDIC Chairman Donna A. Tanoue said her agency is taking an increasingly active role in rebuilding neighborhoods.
That means more than making sure lenders comply with community reinvestment and fair-lending laws, she said. It also means serving as an "honest broker" between lenders and community leaders. The FDIC co- sponsored National Community Reinvestment's conference.
"We're here to serve the public-the entire public-fairly and equally," she said.
Stephen R. Malphrus on June 1 will step up to staff director for management at the Federal Reserve Board. He will succeed S. David Frost, who is retiring.
Mr. Malphrus will manage the human resources, planning and budgeting, and information technology. He joined the Fed in 1976 and was named director of the information resources management division, his current position, in 1991.
Alan E. Sorcher has joined the Securities Industry Association as assistant general counsel, a new position, after stints with both the Federal Reserve Board and the Securities and Exchange Commission.
"He is in a unique position to consul the increasing number of our members that are owned by banks on issues that affect them," said Stuart Kaswell, SIA senior vice president and general counsel.
At the Fed, Mr. Sorcher reviewed enforcement recommendations, drafted administrative decisions on employment and enforcement matters, and handled both litigation and investigations. He was a branch chief in the SEC's enforcement division.