WASHINGTON - With three states already crafting tough consumer privacy protection laws, experts are divided on whether the banking industry faces a nationwide fight.

Officials from Massachusetts, Minnesota, and Nebraska said last week that legislation is in the works that would crack down harder on banks than the federal financial reform law signed Nov. 12 by President Clinton.

The federal law's provisions, which will not take effect before late next year, require financial institutions to have and disclose privacy policies annually, bar them from sharing account numbers or other data with third-party marketers, and give customers the right to block sharing of most other confidential information with third parties but not affiliates.

Congress specifically left the door open to states to pass stricter statutes. Half a dozen to as many as 25 states might take significant action, according to various sources.

Neal Osten, a staff expert on financial issues for the National Conference of State Legislatures, downplayed predictions of widespread state action anytime soon. State lawmakers, he said, probably will not turn serious attention to the issue until late next year or 2001, because they are still learning about the new federal law and will be more focused on tax and budget issues during the 2000 election year.

"It is too early," said Mr. Osten, a former staff member of New York's Senate Banking Committee. "Some of them will probably want to wait and see how the federal legislation plays out and if they need anything in their states to strengthen financial privacy."

Others disagree.

"I wish I were half as confident as he," said Annie Hall, chief lobbyist for Bank One Corp. Officials in 25 states are in "serious discussions" about privacy legislation, she said, and municipalities are mulling new laws too. Ms. Hall would not identify these states, but said they include the 10 largest. Even if most states do not act, financial services lobbyists must be on guard to stop successes or models in even the smallest locations, she said.

"These things spread like viruses from one state to another," said Ms. Hall, who is chairman of the Privacy Discussion Group, an ad hoc group of large banking, insurance, and securities institutions. "One of our major concerns is this will become a contest between the states and federal government as to who can work the fastest and have the most stringent restrictions."

Other federal and state trade groups are on the alert too. American Bankers Association president Hjalma Johnson urged bankers to get ahead of the curve and adopt stronger policies by April, and chief lobbyist Edward L. Yingling said the ABA has been preparing state trade groups to fight on the local level.

Some lawmakers are promising quick action.

"We are not just going to wait for the Congress to take another couple decades and address this one," said Minnesota Sen. Don Betzold, Democratic chairman of a key data practices subcommittee. "I would be surprised if within our legislature we would just let this sit."

Minnesota Attorney General Mike Hatch, who reached a landmark settlement with U.S. Bancorp over its practices in June, plans to develop tougher privacy legislation by yearend. Mr. Hatch testified before state lawmakers in November that all banks should be required to get consumers' permission, a so-called opt in, before sharing personal information.

"This is what the public is demanding right now," Sen. Betzold said. "I would support an opt in."

But Minnesota has a politically complex landscape and a short legislative session that starts in February, Sen. Betzold acknowledged. Passing a ban on the sharing of account numbers or other data with telemarketers without customer knowledge is "a no-brainer," he said, but whether it should require prior consent or a more passive chance to opt out is unclear.

In Nebraska, Sen. Shelly Kiel said her proposal is still being drafted, but the Democratic lawmaker said it would require explicit customer permission before financial institutions can share confidential information with third parties or affiliates.

Its chances of passing are "very good" because the legislature is nonpartisan and unicameral, legislative assistant Tim Krapp said. "This is important to a lot of people," he said. "This is something they will call their state senator about. They will say this is something they need."

But like a lot of other state legislatures, Nebraska's session is short. It begins Jan. 5 and ends two months later. Also, new bills can only be introduced during the first 10 days of the session there. Other states have similar restrictions, and experts say they permit far fewer amendments and other parliamentary maneuvers that federal lawmakers use.

Six states, including Texas, do not have sessions scheduled in 2000, according the National Conference of State Legislatures.

The Massachusetts legislation, introduced in June, would require all businesses to get customer consent before sharing information for marketing purposes. There are some exceptions, including disclosures for auditing and law enforcement purposes.

It is also possible that federal lawmakers will revisit the issue next year. Several prominent lawmakers are interested in tougher restrictions on information sharing and President Clinton has said he will back the effort.

Comptroller of the Currency John D. Hawke Jr. has repeatedly warned bankers in recent speeches that they ought to voluntarily improve consumer protections as a way of warding off more onerous laws.

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