Time: Tue Oct 07 04:47:28 1997
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Date: Tue, 07 Oct 1997 04:45:54 -0700
To: (Recipient list suppressed)
From: Paul Andrew Mitchell [address in tool bar]
Subject: SLS: ABA Press Release on Privacy (fwd)

>Below is a press release in which the ABA explains how demanding
>fingerprints and SSNs protects consumers' privacy.
>Contact: Sonia Barbara <sbarbara@aba.com>
>Banks play a unique role in the consumer privacy debate, the American
>Bankers Association told a Congressional subcommittee today.
>"We believe that banks do more to protect customer confidentiality than
>any other industry," said John J. Byrne, ABA senior counsel and compliance
>manager.  "Whether by law or by policy, the watchword for our industry is
>trust, and without it, consumers could lose confidence."
>Testifying before the House Subcommittee on Consumer Credit, Byrne
>explained that collecting personal information about consumers, such
>as age, address, social security number, employment, etc., occurs for
>regulatory purposes, aids the industry in fraud prevention, and remains
>critical to the daily business of banking.  "Issues such as unauthorized
>access and distribution are carefully addressed in bank policies and
>procedures," he said.
>Because of the many facets of privacy that are unique to banks, such
>as government and private sector access to information, ABA believes
>the banking industry should be free to develop its own privacy response
>to emerging technologies, he said.  "We are in the best position to
>address compliance with various laws."
>Byrne acknowledged that the banking industry is aware of the increased
>focus on consumer privacy due to the rapid emergence of electronic
>commerce. He said the industry willingly accepts the challenge put forth
>by the White House report, "A Framework for Global Electronic Commerce,"
>which supports private-sector efforts to implement consumer-friendly,
>self-regulatory privacy regimens. "We believe that our efforts to address
>privacy issues within the industry will pass muster under any reasonable,
>objective analysis of banking privacy policies," Byrne said.
>The association has been working on the privacy issue for some time,
>Byrne told the subcommittee. In fact, today the association released
>joint privacy guidelines with two other banking groups the Bankers
>Roundtable and the Consumer Bankers Association.  The three groups had
>previously drafted their own guidelines, but decided that the creation
>of one set of guidelines would be the most sensible approach for the
>industry, Byrne said. Regarding regulation, ABA opposes the creation
>of a centralized government agency on privacy due to the uniqueness
>of banking, Byrne said. "Our legal and regulatory responsibilities,
>which include the reporting of suspicious transactions and the
>protection of the safety and soundness of all financial institutions,
>are vastly different and more comprehensive than most industries, and
>thus, our industry could be unintentionally harmed by the creation of
>a centralized agency that lacked banking expertise."  He suggested
>that an alternative would be the formation of a non-governmental
>advisory body that could represent industries concerned with privacy
>issues. "Tapping the expertise of the private sector in the privacy
>area and ensuring that all relevant industries are represented is a
>worthy goal for the government and Congress to consider."
>Byrne pointed out that one of the most difficult challenges facing the
>banking industry is proving to consumers that the financial industry needs
>access to information to prevent fraud and crimes, such as identity theft.
>Congressional initiatives to limit the use of social security numbers and
>other personal identifiers are well-intentioned, but "we must emphasize
>that restricting the use of such information by banks will have a
>deleterious effect on our industry's ability to report and prevent fraud."
>Similarly, preventing banks from fingerprinting non-customers who are
>cashing checks, would be counterproductive, Byrne said.  Fingerprinting
>has reduced check fraud anywhere from 40 to 80 percent in states that
>have implemented the program.  "Banks are sensitive that some anti-check
>fraud measures may be misunderstood by customers, consumer
>representatives, the public or media, who may perceive them as intrusive,
>inconvenient, or offensive," Byrne said. "Part of the challenge for banks
>is to balance prudent check-fraud prevention measures and customer
>convenience and satisfaction."
>Byrne concluded today's testimony by announcing the release of a
>compendium of privacy essays authored by private- and public-sector
>experts.  "This compendium is ABA's contribution to the broader issues
>of privacy and we look forward to many discussions from all points of
>view," he said.
>The American Bankers Association brings together all categories of
>banking institutions to best represent the interests of this rapidly
>changing industry.  Its membership; which includes community, regional
>and money center banks and holding companies, as well as savings
>associations, trust companies and savings banks; makes ABA the largest
>banking trade association in the country.
>Copyright 1997 American Bankers Assoc.
>Page last modified: Wed Oct 01 11:46:29  1997

Paul Andrew Mitchell, Sui Juris      : Counselor at Law, federal witness 01
B.A.: Political Science, UCLA;   M.S.: Public Administration, U.C.Irvine 02
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