Ask a banker what his or her bank's assets are and he or she will usually point to the balance sheet and say something like, "Oh ... nearly $12 billion."

But the only assets of a bank that really matter don't show up in accounting statements. They are the people who work at the bank and the customers they serve.

Market surveys have shown consistently that banks are among the most trusted of the major institutions in this country. People might not like banks and the fees they charge, but they trust them.

They trust banks to pay them their money when it is due. And they trust banks to protect their privacy. If banks do anything to erode this trust factor, they will greatly diminish the value of their franchise.

That's why recent charges that banks are selling customer information and lists to telemarketing firms and others are so disturbing. We don't know yet what the facts are, as all we've heard are the allegations.

If the allegations are substantially correct and the practices widespread, banks need to adopt and implement new customer privacy policies without delay. I was heartened when I learned that the American Bankers Association and other trade groups will soon convene in Washington to address customer privacy. They need to act promptly and decisively-not to preempt congressional legislation on the subject, but to protect the reputation and integrity of the world's best banking system.

Speaking of Congress, now would be a good time for our elected representatives to exercise restraint and avoid grandstanding. The privacy issues are very complex and not well understood. A rush to judgment by Congress could do a lot of harm.

There are many times when banks must communicate customer information to third parties in order for the financial system to operate. Most banks have their customer checks printed by outside vendors. Those vendors must be given the customers' addresses and account numbers.

Many loans, particularly consumer loans such as mortgages, are sold in the secondary market. The buyers must be given the customer information the bank or S&L generates in originating and servicing those loans.

Affinity credit card programs that let customers earn frequent-flier miles and other benefits entail the sharing of customer information with third parties, including the amount spent using the card.

Credit losses, and the cost of obtaining credit, are reduced by banks' sharing credit histories with credit bureaus. Retailers need to be able to determine whether a customer check is likely to clear.

The list could go on at great length. The point is that it's easy to proclaim that banks should not give customer information to third parties. It's quite another matter to make that proclamation stick without doing serious damage to the economy.

The last thing we need at this moment is legislation. Thanks to a recent speech by the comptroller of the currency and litigation commenced by the Minnesota attorney general, the industry's attention is now riveted on privacy issues.

The trade groups will be meeting soon to work through those issues. I believe they will get it right-they must, because the future of their industry is on the line.

We need carefully drawn policies that balance the right of a customer to privacy against the necessity for some types of sharing of information with third parties, to enable the financial system to function properly. Congress should stand down while the private sector tries to achieve this balance. If the private sector fails to respond responsibly, Congress can always mandate the proper protections.

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