Summary of
Financial Privacy Bills
in the 106th Congress

This page summarizes the following bills:

• S 187, Financial Information Privacy Act, (Sarbanes).
• HR 1340, Securities Investors Privacy Enhancement Act, (Markey).

S 187, "Financial Information Privacy Act of 1999."

Sponsor. Sen. Paul Sarbanes (D-MD). Cosponsors: Chris Dodd (D-CT), Richard Bryan (D-NV), Patrick Leahy (D-VT), John Edwards (D-NC), Ernest Hollings (D-SC).

Summary. S 187 IS would give federal financial regulatory agencies (including the Securities and Exchange Commission) the authority to jointly issue rules to protect the privacy of confidential customer information. Such regulations would prohibit disclosure of confidential customer information without prior consent of the customer.

The regulations would also allow customers to prohibit the disclosure or sharing of confidential customer information to or with any affiliate or agent of the financial institution.

In addition, the bill provides that the regulations would "require that the customer to whom the information relates be provided with access to the confidential customer information that could be disclosed or shared so that the information may be reviewed for accuracy and corrected or supplemented."

The bill's broad scope covers deposit and trust accounts, certificates of deposit, securities holdings, and insurance policies.

Status. This bill was introduced on January 19, 1999.

Legislative History with Links to Related Materials.

• 1/19/99. S 187 IS introduced in the Senate.
• 1/19/99. S 187 referred to the Banking, Housing, and Urban Affairs Committee.

HR 1340, Securities Investors Privacy Enhancement Act."

Sponsor. Rep. Ed Markey (D-MA). No cosponsors.

Summary. HR 1340 IH would require brokers, dealers, investment companies, and investment advisers to protect the confidentiality of financial information of their customers.

Section 2 of the bill would amend the Securities Exchange Act of 1934 to require brokers and dealers to keep confidential the personally identifiable information of their customers. Brokers and dealers may only disclose such information with consent of the customer, as is necessary to perform financial services for the customer, or as required by law. Section 2 would also require brokers and dealers to inform their customers whenever financial information is being collected about them, and whenever they intend to offer financial information to any other person, including an affiliate or agent.

Section 3 of the bill would amend the Investment Company Act of 1940 to require investment companies to keep confidential the personally identifiable information of the beneficial owners of the outstanding securities of the company. The restrictions are the same as those on brokers and dealers.

Section 4 of the bill would amend the Investment Advisors Act of 1940 to require investment advisors to keep confidential the personally identifiable information of their clients. The restrictions are the same as those on brokers, dealers, and investment companies.

Status. HR 1340 IH was introduced on March 24, 1999.

Legislative History with Links to Related Materials.

• 3/25/99. HR 1340 IH introduced in the House.
• 3/25/99. HR 1340 referred to the House Commerce Committee.
• 4/12/99. HR 1340 referred to the Finance Subcommittee.