The Office of the Comptroller of the Currency, nudging banks on an increasingly prominent issue, is preparing guidance on how to handle private consumer information.

Acting Comptroller Julie L. Williams said Monday that the advice will focus on banks' disclosures of privacy policies-an area where the agency has spotted problems.

The so-called best-practices guidance, due out in about a month, will not be legally binding. But Ms. Williams reiterated previous warnings that banks without strong privacy provisions could face new federal regulations.

The issue of protecting consumer privacy is moving to the forefront as mergers create massive financial services companies with more than one function. The concern is that one part of a company could pass along private information to another part.

Bankers and industry officials generally supported the OCC's efforts, saying that good disclosure will help them compete. But some voiced concern that the various regulatory agencies would be inconsistent in how they approach the issue.

Ms. Williams, addressing a Florida conference of the Consumer Bankers Association, said the guidance will suggest how to communicate privacy policies on Web sites and how to comply with disclosure requirements of the Fair Credit Reporting Act.

That law forces banks to let consumers know they may "opt out" of information sharing. The OCC guidance will probably detail how those disclosures should be written so that they are clearer, an agency spokesman said.

"Too often, we found disclosure information in fine print, buried in a mass of equally tiny type, along with other required terms and disclosures," Ms. Williams said.

After the speech she said the guidance would come "within a month, perhaps a little more."

She added, "We're still in the early stages of having parts of (the guidance) drafted."

Ms. Williams said that other bank regulatory agencies are expected to issue similar guidance. And nonbanks would probably face scrutiny over privacy issues from the Federal Trade Commission.

Industry officials will be watching closely.

"We're very concerned, given the makeup of bank holding companies, that every one come out with the same guidance," said Marcia Z. Sullivan, director of government relations for CBA. "We have asked all of the agencies to work together."

Sharing customer information among affiliates "is integral to the way banks do business," Ms. Sullivan said. "We're very afraid that well- intentioned guidance could (hinder) relationship building."

The guidance from the OCC will "fall short of a regulation" but adherence to it would figure into the examination process, the OCC spokesman said.

David W. Roderer, an attorney with Goodwin, Procter & Hoar in Washington, said such efforts at guidance are less formal than specific guideline statements-but nonetheless important.

"You ignore them at your own risk," he said.

Ms. Williams did not rule out the possibility of formal regulation.

"Just how much intervention that involves will depend upon the steps that the industry takes to establish and implement its own policies and principles in the coming months," she said.

She noted that European banks already face tougher standards than banks in the United States. The European Union's privacy directive, which went into effect this week, requirees that consumers "get disclosure statements on how personal information will be used and the option of preventing companies from sharing information about them," she said.

Further, banks in the European Union are prohibited from sending information to countries that do not meet a threshold of protection. The United States does not meet the European standard.

Executives at the Consumers Bankers Association conference said strong privacy policies will be essential for competing effectively.

"The biggest concern is if we don't do it, we're not going to be a big player," said Pamela P. Flaherty, senior vice president of Citigroup.

"To the extent that we blow trust, we're giving away keys to the kingdom," said Craig J. Kelly, group executive vice president at Crestar Financial Corp. "I don't think that's going to happen. It's too important to us."

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