WASHINGTON -- Even as the White House calls for a more extensive privacy law, federal regulators are expected to delay enforcement of new financial-privacy rules until July 2001, the Wall Street Journal reported.
The rules, currently scheduled to go into effect in November, require firms to notify customers of their privacy policies and give them an opportunity to restrict how firms distribute personal data. But the Journal said that the Financial Services Coordinating Council, a new industry umbrella group, has launched a lobbying campaign, arguing that many companies won't be ready to comply with the complicated rules so quickly.
The newspaper said that the development has sparked immediate opposition in Congress and among privacy advocates, including the American Civil Liberties Union, many of whom have signed a letter sent on May 9 to Federal Reserve Chairman Alan Greenspan and other regulators urging them not to delay the rules.
"We are unalterably opposed to this proposal, which would allow financial institutions to fail to provide consumers with any notice regarding the institution's privacy policies and practices," the letter said. "Further, this proposal would delay providing customers their new opt-out rights to prevent having their financial information transferred to certain nonaffiliated third parties."
The privacy rules were part of the financial-services overhaul legislation that was enacted in November 1999. Several industry officials said they have been told by regulators to expect the delay, the Journal reported.
The newspaper also said that the expected delays prompted skepticism about the seriousness of President Clinton's latest financial-privacy proposal, which was introduced in Congress last week and would require even greater efforts by companies to obtain customer permission for information-sharing. That legislation, if passed this year, could supersede the current rules before they ever actually go into effect.