You asked for a comparison of the attorney general's proposal concerning consumer financial information to last year's bill on the same topic (sHB 6619, File 790).

SUMMARY

Both the attorney general proposal and last year's bill expand the situations in which a retailer must give a consumer an opportunity to prevent disclosure of identifying information. They both (1) make the law apply to consumer information known by the retailer regardless of how the retailer obtained the information, (2) make the law apply to the exchange of consumer information, and (3) exempt information subject to regulation under the federal Gramm-Leach-Bliley Act.

The proposal differs from last year's bill in that it requires retailers to give consumers at least 60 days to exercise their option to prohibit the disclosure of consumer information.

SUMMARY OF PROPOSAL

The proposal expands the situations in which a retailer must give a consumer an opportunity to prevent disclosure of identifying information. Current law requires retailers to give a consumer an opportunity to prohibit disclosure of consumer information before the retailer sells, leases, or relinquishes it if the information was obtained through the consumer's use of a discount card or device issued by the retailer. The proposal instead requires retailers to give the opportunity to prohibit disclosure before they disclose it regardless of how the information was obtained.

A retailer gives a consumer an opportunity to prohibit disclosure by giving a notice that states that identifying information will be disclosed, describes the purposes for which the it will be used, and includes a form to prohibit disclosure. Under current law, the notice must be given when the consumer applies for or receives an unsolicited card. Under the proposal, the notice must give the consumer at least 60 days from the day the consumer receives to notice to respond.

The proposal makes the consumer's prohibition apply to the exchange of consumer information in addition to its sale, lease, or relinquishment. Finally, it restricts the application of the law to those situations in which a retailer discloses consumer information in return for something valuable.

The proposal exempts the disclosure of consumer information to: (1) banks, security brokerages and insurance companies affiliated with federally authorized holding companies, as required by the federal Gramm-Leach-Bliley Financial Modernization Act of 1999, if the information is disclosable under it (15 USC 6809 (3)(A) or (2) any entity that uses the information only to administer a program on the retailer's behalf.

BACKGROUND

Gramm-Leach-Bailey Act

The Gramm-Leach-Bliley Act (P. L. 106-102) eliminates long-standing barriers to cross-ownership and affiliation among banks, security brokerages, and insurance companies. Title V of the act contains privacy protections for consumers when companies share consumer information. It requires banks to develop written privacy policies, disclose them to consumers, and give consumers the right to opt out of information sharing with nonaffiliated third parties. The act does not let consumers

opt out of sharing information among affiliated companies. It prohibits disclosure of customer account or similar access codes to nonaffiliated third parties for telemarketing or other direct marketing purposes. It requires federal regulators to establish comprehensive standards for ensuring the security and confidentiality of consumers' personal financial information.

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