House Democrats mounted a final push Tuesday to toughen the privacy protections in the financial reform bill.
Reps. Edward J. Markey of Massachusetts, John D. Dingell of Michigan, and others threatened to rally enough votes to kill the legislation unless Republican leaders allow consideration of their proposal to shield customers' financial information. Officials from the banking, insurance, and securities industries have pressed the House leadership to vote on a milder, bipartisan compromise instead.
"The people's will ought to have a chance to at least be expressed," said Rep. Jay Inslee, D-Wash.
But these privacy hawks were dealt a blow when Rep. John J. LaFalce, the ranking Democrat on the House Banking Committee, said he backs the bipartisan amendment favored by the industry. The New York lawmaker said he plans to propose that amendment when the House votes on the financial reform bill Thursday, a Democratic committee staff member said.
The provision, crafted by Reps. Martin Frost, D-Tex., and Deborah Pryce, R-Ohio, would let customers stop their financial institutions from sharing personal data with a third party for marketing purposes.
No limits would be placed on information exchanges among affiliates of a holding company. Borrowing from a proposal by Rep. LaFalce, the deal would bar the sharing of credit card, savings, or other account numbers with telemarketers.
It would also split enforcement of privacy protections among federal banking regulators, the Securities and Exchange Commission, and the Federal Trade Commission.
But Rep. Markey and his allies said customers must be able to block information sharing among affiliates as well. Otherwise, they argued, the bill would contain a large loophole.
"We do not believe that this is too much to ask from the financial services industry," Rep. Markey said. "After all, they are going to be given opportunities that are unimaginable in terms of merging all of these various financial services packages into offerings to each and every American."
Rep. Joe Barton, a Texas Republican, sided with the Democrats. Under the Markey proposal, he said, customers could opt out of information-sharing with outside telemarketers but permit it among affiliates.
A decision on whether to let the House vote on the Democratic amendment is expected today when the Rules Committee votes on the legislation. This panel is to decide the final version of the bill that goes to House the next day, which amendments may be offered, and other key procedural issues.