WASHINGTON - The financial services industry dodged two bullets Thursday when the Senate Banking Committee postponed action on tougher privacy legislation and deadlocked on an amendment that would have restricted the use of Social Security numbers.

Chairman Phil Gramm, supported by Republicans and Democratic Sen. Charles E. Schumer, fended off attempts to go beyond the Gramm-Leach-Bliley Act of 1999 by requiring financial institutions to get explicit customer consent before sharing medical and financial information with affiliates or third parties.

Privacy hawks had threatened a flurry of amendments to an unrelated securities bill being voted on by the panel, but Sen. Gramm argued that adopting hastily crafted, nongermane measures on the complex topic of privacy would open a Pandora's box of unintended consequences.

His arguments were aided by difficult questions that arose from a Democratic proposal, which later was withdrawn, to protect the privacy of individuals' genetic information.

"I don't think we are ready here today to set genetic policy," said Sen. Gramm, who added that it is outside the committee's jurisdiction.

Besides advocating tougher privacy laws, the committee's No. 2 Republican, Sen. Richard C. Shelby of Alabama, offered an amendment that would have restricted the buying and selling of Social Security numbers by financial companies. It also would have added Social Security numbers to the list of "nonpublic information" under Gramm-Leach-Bliley that may not be shared with third parties unless customers have a chance to block such transfers.

Protections are needed, Sen. Shelby said, because criminals can use Social Security numbers, as well as popular identifying data such as birth dates and mothers' maiden names, to steal someone's identity. "If you have these three things, you have the keys to the kingdom," he said. "I don't know anyone … that believes financial institutions should be making a profit by trafficking in individual Social Security numbers."

He criticized banks for using the last four digits of Social Security numbers as default personal identification numbers for automated teller machine customers and as identifiers for telephone banking customers.

The amendment failed on a 10-10 vote when Sen. Gramm rallied fellow Republicans in opposition by arguing it was clumsily worded and could inadvertently conflict with Gramm-Leach-Bliley's broader privacy provisions.

To ensure committee passage of the securities bill, Sen. Gramm agreed to cooperate on bipartisan, carefully worded amendments that could be offered before the full Senate to protect the privacy of consumers' medical records and Social Security numbers.

The Texas Republican said he would support an amendment that would require lenders to get explicit customer permission before using medical information in deciding whether to grant a loan, and another that would ban the sale of Social Security numbers.

John J. Byrne, senior counsel of the American Bankers Association, said neither proposal would interfere with industry practices.

"We do not sell Social Security numbers, just like we do not use medical information to make credit decisions," he said. "We use Social Security numbers internally as an identifier on accounts. We do not sell Social Security numbers. … We feel anyone who sells them is violating existing law."

Sen. Shelby did not propose an expected amendment that would have let banks pay interest on business checking accounts starting in late 2002. His spokeswoman said he lacked enough votes, while another aide said the senator had decided to focus only on the privacy amendments Thursday.

It was welcome news to a coalition of more than 1,000 small banks that said in a letter this week to Senate Banking members that the amendment would be too costly. Similar legislation passed the House this year and Senate Banking last year, however.

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