WASHINGTON - While regulators enforce the Gramm-Leach-Bliley Act's privacy provisions, financial services lobbyists are focusing on tempering state-level efforts to enact stricter legislation, according to American Bankers Association executive vice president Donald G. Ogilvie.
Gramm-Leach-Bliley gives states the right to adopt tougher privacy shields, and financial services lobbyists are concerned that more onerous laws at the state level could create a compliance nightmare.
The lobbyists' primary goal is to persuade states not to enact any new privacy law until Gramm-Leach-Bliley has been fully implemented, Mr. Ogilvie said Friday. But they are also working with those intent on passing tighter privacy protections to follow Congress' lead and simply give customers the right to opt out of information sharing, he said.
Under opt-in measures being considered, a business would have to get its customer's permission before sharing the customer's information with a third party. Opt-out provisions require a company simply to give customers an opportunity to keep their information from being shared.
Several state legislatures drafted privacy bills last year, Mr. Ogilvie said. However, after working with industry representatives, none adopted opt-in requirements. The industry will continue to work with states this year and encourage lawmakers to see the benefits of opt-out plans, he said.
The top 90 financial institutions would have to spend $16 billion to satisfy opt-in requirements, he said, citing an Ernst & Young study.
The financial services industry now has adopted stricter privacy regulations than any other industry, Mr. Ogilvie said.