A White House plan to unveil a financial privacy initiative today was scuttled by the military action in Yugoslavia.
President Clinton and Treasury Secretary Robert E. Rubin were scheduled to introduce the administration's "Consumer Financial Privacy and Protection Initiative" at a press conference this morning. The event has not been rescheduled.
But rough details of the consumer initiative have begun to trickle out. It reportedly includes a combination of new and recycled legislative and executive proposals aimed at addressing five areas of vulnerability for bank customers:
"Right to know" how financial information is being handled.
Fraud and abusive practices.
Access to financial services.
Improving financial literacy.
The postponed announcement comes on the heels of two events that have raised eyebrows about financial privacy in America: the disastrous know- your-customer proposal and standards set by the European privacy directive, which U.S. laws and regulations might not meet.
Bank trade groups, many of them caught off guard, reacted cautiously to news of the White House effort.
"It makes us nervous because we don't know how far up the shore the wave is going to come," said James D. McLaughlin, director of regulatory affairs at the American Bankers Association. He said some aspects of the administration's plan may mirror privacy amendments currently being proposed in the financial modernization debate.
"I don't know what the White House will propose, but some privacy advocates might not understand that if you opt out of information sharing, you also opt out of a lot of services and better service delivery," said Joe Belew, president of the Consumer Bankers Association.
"Everybody wants their privacy protected, and everybody wants seamless service delivery," he added. "But you can't have it both ways."
For example, Mr. Belew said, if banks are prohibited from sharing customer information with their affiliates, it might prevent a customer from having his monthly mortgage payment automatically deducted from his checking account.