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Clinton Plans to Protect Consumer Financial Data >Page 1, 2

The following is the complete text of the White House press release on the proposed Clinton-Gore plan to protect financial privacy announced by the President on April 30, 2000.

THE WHITE HOUSE
                     Office of the Press Secretary
________________________________________________________________________
For Immediate Release                                     April 30, 2000
       CLINTON-GORE PLAN TO ENHANCE CONSUMERS' FINANCIAL PRIVACY:      
             PROTECTING CORE VALUES IN THE INFORMATION AGE             
                             April 30, 2000                              
 Clinton today, in his commencement address to Eastern Michigan
University graduates and their families, announced a new legislative
 proposal to protect the financial privacy of American consumers.  This
proposal, which the Administration will send to Congress next week,
fulfills the promise that the President made on November 12, 1999, when
he signed historic legislation modernizing our financial system.  While
that bill took significant steps to protect the privacy of our financial
transactions, the President made clear upon signing that he did not
believe the protections were strong enough.  He directed the NEC,
Treasury Department, and Office of Management and Budget to develop a
new legislative proposal.  Setting out the theme of today's proposal,
the President said at the time:  "We cannot allow new opportunities to
erode old and fundamental rights."
PRESIDENT CLINTON AND VICE PRESIDENT GORE BELIEVE THAT WE MUST KEEP OUR
PRIVACY PROTECTIONS AS UP TO DATE AS OUR NEWEST TECHNOLOGY:
Breakthroughs in technology should not break down the walls of privacy.
Special protections are needed for Americans' most sensitive information
- about health, children, and our personal finances.  The Clinton-Gore
Administration has taken steps to enhance privacy for medical
information and for children on the Internet.  Today, President Clinton
and Vice President Gore challenge Congress to provide Americans with
comprehensive financial privacy protections.
THE CLINTON-GORE PLAN TO PROTECT CONSUMERS' FINANCIAL PRIVACY:
-     Consumer choice: Give consumers the right to choose whether a firm
can share consumer financial information with third parties or
affiliated firms.
-     Enhanced protection for especially sensitive information:  Require
that a consumer give its affirmative consent before a firm can:
-     Gain access to medical information within the financial
conglomerate; or
-     Share detailed information about a consumer's personal spending
habits.
-     Access and Correction: Give consumers a new right to review their
information and correct material errors.
-     Effective enforcement: Provide effective enforcement tools for
financial institutions subject to FTC enforcement of privacy rules.
-     Comparison Shop on Privacy Policies: Give consumers privacy
notices upon application or request, so they know how information is
protected before a customer relationship is established.
-     Study Privacy Issues Raised by Bankruptcy Data: The President
directed a study of the privacy impact of electronic availability of
detailed bankruptcy records, containing financial information of
vulnerable debtors.
PROTECTING FINANCIAL PRIVACY FOR AMERICAN CONSUMERS WHILE REAPING THE
BENEFITS OF TECHNOLOGY, COMPETITION, AND INNOVATION:  The financial
services industry has changed dramatically in recent years, due to
greater integration of banking, securities and insurance firms, new
technologies that speed and expand access to information, and growing
reliance on electronic payments systems (credit cards, debit cards, and
even so-called digital wallets (on-line accounts that pay for purchases
and bills) instead of cash.  Such innovation has helped provide
consumers with added convenience, lower prices, and more choices.
The challenge is to take advantage of these benefits without threatening
privacy.  The Clinton-Gore Plan strikes the right balance between the
need for consumer privacy protection and the benefits that information
sharing can provide to consumers and the economy. Firms will be able to
share information to serve customers needs in new and innovative ways --
for example, through customized statements and call centers that include
all of a customer's accounts.  Firms' risk management practices also
will be unaffected, which will also benefit consumers: lower losses mean
lower prices for everyone in the financial system.
       DETAILS OF THE CLINTON-GORE FINANCIAL PRIVACY LEGISLATION
-     Consumer Choice: Consumers should have meaningful choice -- the
opportunity to opt-out -- before a financial services firm can share
their private financial data with anyone.  Last year's financial
modernization legislation granted important rights to opt-out of
information sales to telemarketers and other unaffiliated firms.
Today's proposal extends those protections to information shared within
financial conglomerates.  The plan also closes an unnecessary exception
for "joint marketing" from last year's bill.  We will preserve, however,
financial firms' ability to share the information that they need to
develop new products and manage their risks, subject to appropriate
confidentiality and reuse limitations.
-     Enhanced Protection for Especially Sensitive Information:
-     Affirmative Consent Before Sharing Medical Information: A consumer
applying for a loan or other financial product should not have to worry
that the lender is making decisions based on personal medical records
received from an insurance affiliate.  The Clinton-Gore plan will ensure
that companies would not gain any special access to insurance medical
records by being part of a financial holding company.  The consumer
would be required to affirmatively consent ("opt-in") before any
financial firm could receive medical information from a life insurance
company or other affiliate.
-     Affirmative Consent for Personal Spending Information: Just as we
do not expect a postal worker to read our mail, we do not expect a bank
processing our checks or credit card payments to take our most sensitive
financial information and share that information with others.  Under the
Clinton-Gore plan, a financial firm will not be permitted to transfer
individualized, personal spending habits (where we spend our money,
where we earn our money, and what we buy) unless a customer
affirmatively consents.
-     The Right to Access and Correct: As financial conglomerates
collect more and more data about us, it is increasingly important that
consumers have the ability to review that information and correct
material errors.  Expanding on a protection already provided for credit
reports, the Clinton-Gore plan would allow a consumer to ensure that
firms are not deciding whether to offer them products or special
services based on mistaken information about their financial status.
-     Effective Enforcement: The Clinton-Gore plan makes these
protections fully enforceable against banks and other regulated
financial institutions.  For institutions not subject to bank,
securities, or insurance regulation, the Administration proposes to
provide the FTC with clear authority to seek monetary damages and to
grant State Attorneys General the authority to work with the FTC to halt
deceptive practices by those institutions.
-     Allow Consumers To Comparison Shop: Consumers concerned about
their privacy should be able to choose the firm that offers the best
protection.  But today, consumers often get privacy policy information
after they have already decided to do business with a firm.  The
Clinton-Gore plan would enable consumers to learn about any firm's
privacy practices up front, before committing to a customer
relationship.
-     Study of the Privacy Needs of Vulnerable Debtors in Bankruptcy:
Bankruptcy records contain detailed sensitive information about debtors
(including account numbers, social security numbers, account balances,
income sources, and payment histories).  Aggregation and electronic
distribution of this information could lower bankruptcy costs, but it
also could make information easily available to neighbors, employers,
marketers and predators looking for those most likely to be lured by
scams.  The President today directed the Departments of Justice and
Treasury and the Office of Management and Budget to conclude a study
this year on how best to handle privacy issues for sensitive financial
information in bankruptcy records.
          THE CLINTON-GORE STRATEGY TO PROTECT THE PRIVACY OF
                    AMERICAN FAMILIES AND CONSUMERS.
Rapid changes in technology, and the vast increases in access to
information that they make possible, are enormously important to our
future prosperity.  To ensure that such growth is consistent with our
core values including privacy, Vice President Gore announced an
Electronic Bill of Rights in 1998, calling for private sector leadership
where possible, on legislation when necessary, on responsible government
handling of personal information, and on an informed public.  Today's
announcement continues the great progress already made toward achieving
those goals.  The Administration continues to encourage self-regulatory
efforts by industry to address privacy issues posed by emerging
technologies.  But, as the Vice President underscored in 1998, certain
medical, financial, and other information is so sensitive that legal
protections are needed.
-     Medical Privacy: Last year, the Clinton-Gore Administration
announced historic proposed rules that would legally guarantee the key
privacy protections: notice of data uses; consent before records are
used for non-medical purposes; patient access to records; proper
security; and effective enforcement.  Final rules will be issued later
this year.
-     Children's On-line Privacy: The Administration worked with
Congress to pass the Children's Online Privacy Protection Act of 1998.
Rules went into effect this month to ensure that web sites aimed at
children will not gather personal information except with the consent of
the parents.
-     Genetic Discrimination: In February, the President issued an
Executive Order that prohibits federal agencies from using genetic
information in hiring and promotion.  He also called on the Congress to
ensure that these same rights apply to employees in the private sector
and to individuals purchasing health insurance.
-     Government Privacy: The President and Vice President believe that
the Federal government must also continue to build privacy protections
into its own activities.  All Federal agencies now have privacy policies
clearly posted on their web sites, and we are making privacy impact
assessments a regular part of the development of new government computer
systems.

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