WASHINGTON — Privacy legislation is a sleeping giant that could be revived by Democrats, who are poised to take control of the Senate and vault consumer advocate Sen. Paul Sarbanes to the helm of the Senate Banking Committee, a former Republican aide on the panel said Thursday.

“Privacy is the sleeper issue on this,” said Lendell W. Porterfield, who until January worked for privacy hawk Sen. Richard C. Shelby, the second-ranking Republican on Senate Banking. “It’s the one issue where Sarbanes and the Bush administration could have something in common.”

As a result, “the banking industry will have to move to a more defensive position on privacy,” said Mr. Porterfield, who left the committee to become vice president of the Washington lobbying firm Van Scoyoc Associates Inc.

Since coming to power, President Bush and his aides have been dropping increasingly strong hints that they aren’t opposed to additional privacy laws and regulations, which Sen. Sarbanes, D-Md., has long advocated.

White House Budget Director Mitch Daniels was quoted in the online edition of BusinessWeek last week as saying that President Bush “is consistently underestimated … in the intensity of his commitment and interest in personal privacy.

“Privacy will be a very important theme of this administration,” Mr. Daniels was quoted as saying. “I want to make sure that, particularly in the regulatory area, we have an accountability, and we are alert to opportunities to extend privacy protections.”

The administration surprised corporate America by establishing a privacy czar in the Justice Department, and by letting regulations that President Clinton issued in the waning days of his administration take effect to restrict the corporate sharing of medical information.

Sen. Sarbanes made his mark on privacy issues by authoring a key provision of the Gramm-Leach-Bliley Act of 1999 that expressly lets states enact laws tougher than the federal statute.

As Senate Banking chairman, Mr. Porterfield said, Sen. Sarbanes would be able to schedule consideration of his “Financial Information Privacy Protection” bill, which would go beyond Gramm-Leach-Bliley by letting customers block financial companies from sharing their data with affiliates.

The bill also would require financial institutions to get explicit customer permission — an “opt in” — before releasing such “sensitive” financial information as personal spending habits to affiliates or third parties.

So far this year Senate Banking Committee Chairman Phil Gramm and House Financial Services Committee Chairman Michael G. Oxley had formed a solid fortress for the industry on Capitol Hill by rebuffing attempts from both sides of the aisle to tighten privacy laws.

With the Democratic takeover of the Senate, and Sen. Gramm’s departure from the chairmanship, those defenses would be punctured. However, it remains to be seen how significant a bill could get through to enactment.

“If Sarbanes came out with an overarching, draconian privacy bill, then it would be harder to get it through” a Senate where Democrats hold a razor-thin, one-seat majority, as well as the Republican-controlled House, which has a record of opposing new consumer privacy laws, Mr. Porterfield said.

“However, if it is a more focused bill,” such a limit on the corporate use of Social Security numbers, “then there is a much greater opportunity for success, both on the committee and on the Senate floor,” he said.

The Tennessee native worked on Senate Banking for five years until leaving to start a financial services practice at Van Scoyoc. He has already secured Freddie Mac and the Federal Home Loan Bank of Atlanta as clients.

Control of the Senate gives Democrats a one-seat majority on every committee. That means Senate Banking Democrats could have a defector on privacy and still prevail, provided they get an “aye” from Sen. Shelby, who co-chairs the Senate Privacy Caucus with Sen. Christopher Dodd, D-Conn., and thus be able to move such bills out of committee and to the full Senate.

Sen. Shelby, R-Ala., has a bill pending that would restrict the commercial uses of Social Security numbers, and another that would require financial services companies to get explicit customer permission before sharing credit card and check transaction data with affiliates and third parties.

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