WASHINGTON - In what the financial services industry hopes is a sign that state-level fervor to enact privacy protections is easing, a bill is advancing through the North Dakota Legislative Assembly that would roll back the state's strict information-sharing law.

Currently, North Dakota requires financial institutions to get explicit customer permission - an "opt-in" - before sharing their financial data with unaffiliated companies.

A bill that cleared the state House on Thursday would change the law to a less-stringent "opt-out" requirement, which would let companies share confidential information with third parties provided customers are given the opportunity to block such transfers.

The bill would bring North Dakota law into sync with the privacy provisions of the Gramm-Leach-Bliley Act. The 1999 federal law requires financial institutions, starting July 1, to notify customers of their privacy policies and give them an opportunity to opt out of having their private information shared with outside companies, except under limited circumstances.

Though no large financial institution is based in North Dakota, "it would be an amazing watershed event if this bill is enacted," said Mathew Street, an associate general counsel who tracks state legislation for the American Bankers Association. "It would reconcile state law with the national standard in Gramm-Leach-Bliley."

The state Senate is expected to vote on the bill as early as this week, and Gov. John Hoeven, a Republican, has indicated he would sign it.

Mr. Street noted that Vermont has such legislation pending and that perhaps other states with opt-in laws would follow suit. These other states include Alaska, Connecticut, Florida, Illinois, Louisiana, Maine, and Massachusetts.

Bills being considered this year to loosen existing privacy laws are in stark contrast to the flood of legislative proposals last year, when nearly half the states considered but did not enact opt-in bills that would have gone beyond federal law.

"There are bills in about a dozen states" to tighten privacy laws, "but none are succeeding," Mr. Street said. "This year, instead of reintroducing the opt-in bills, they are rolling it back to match the national opt-out standard in Gramm-Leach-Bliley."


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