|FOR IMMEDIATE RELEASE:||CONTACT: CHRISTI HARLAN|
|Thursday, May 6, 1999||202-224-0894|
Gramm Pledges 'Comprehensive Hearings' on Privacy Issues
The Senate voted today, 95-2, to approve an amendment that will outlaw pretext calls and add other privacy protections to the Financial Services Modernization Act. The amendment was sponsored by Sen. Phil Gramm, chairman of the Senate Committee on Banking, Housing and Urban Affairs.
The amendment provides criminal and civil penalties for pretext calls, in which callers pose as customers to obtain confidential information from banks and other financial-service providers. The amendment also directs federal banking agencies to establish a consumer grievance process to deal with privacy violations. Similar provisions were contained in an amendment offered by Sen. Paul Sarbanes, ranking member of the Senate Banking Committee.
Here are excerpts from Gramm's statement on the Senate floor about his amendment:
"Privacy is a fundamental right that people have, and the question is trying to balance that right against the new technology which we all benefit from, and which we all find ourselves forced to operate within. It is not easy. This is a beginning.
"I want to commit that the Banking Committee will hold hearings on privacy issues. I want to commit that we will hold those hearings in both the subcommittee and at the full committee level; that we will begin the hearings with testimony from any Member of the House or Senate who wishes to testify; that we will hold comprehensive hearings so that anybody who has a legitimate viewpoint or represents any group which has a stake in this issue would have an opportunity to testify and have their position heard.
"Now, basically, in this amendment we make illegal a number of practices, where basically people are engaging in fraud and dishonest behavior. In addition, we require a GAO report on financial privacy. The amendment requires that GAO, in consultation with the Federal Trade Commission and the Federal banking agencies, report to the Congress on the efficacy and adequacy of the remedies provided to prevent false pretext calls to obtain financial information and recommendations for any additional legislation to prevent pretext calling.
"We have a Federal Trade Commission report to Congress on financial privacy. The amendment requires the Federal Trade Commission to submit an interim report to Congress on its ongoing study of consumer privacy issues.
"We establish a consumer grievance process. What we want to do in this amendment is require the Federal banking regulators to create a consumer grievance process for receiving and expeditiously addressing consumer complaints alleging a violation of regulations issued under this bill.
"Each Federal banking agency is required to (1) establish a group within each regulatory agency to receive consumer complaints; (2) develop procedures for investigating such complaints, (3) develop procedures for informing consumers of rights they may have in connection with such complaints, and (4) develop procedures for addressing concerns raised by such complaints, as appropriate, including procedures for the recovery of losses to the extent appropriate.
"This is not the end of the debate. This does not solve the privacy problems in America. I have just touched on a portion of the provisions. But I believe this represents an important step in beginning the debate on this issue of privacy."