U.S. Senator Richard C. Shelby, member of the Senate Banking, Housing, and Urban Affairs Committee, today spoke on financial privacy and consumer protection issues at a committee hearing to examine those issues:
"I want to commend Senator Sarbanes for calling this hearing. The subject of financial privacy is one that is very important and requires the Committee's thorough consideration." "This issue is not new. In one way or another there has been an ongoing debate about privacy since the founding of the country. However, the issue has clearly evolved over time as a range of specific incidents and general trends have raised public concerns about new or different threats. Where once only the government possessed the ability to obtain and the means to exploit vast amounts of personal data, technology now makes it possible for just about anyone to collect, store, sell or do just about anything they want with it.
"I believe the existence of such capabilities requires that we carefully examine the pros and cons of its use relative to the disclosure of personal information. Furthermore, as we move forward, I think it is extremely important that we continue to pay close attention to the significant role that technological capability is going to play in this debate. Consumer and industry demand for faster and more reliable information exchange is only going to increase. As technological capabilities are expanded to keep up, new and unforseen issues concerning the use of sensitive personal financial information will continuously arise.
"While it may not be possible to develop rules that deal with every possible scenario involving the use of confidential financial information, I believe that the American people will demand that we establish some basic principles that will guide our future efforts.
"In order to do this I believe that it is very important for the Committee to draw from a broad range of perspectives in considering the basic questions regarding the various federal laws touching on financial privacy. For instance: are such laws effective? Are they targeted to consumer concerns? Do consumers even understand them? Are they in sync with today's marketplace? What restrictions do they place on business activity?
Additionally, in light of the fact that the states play an important role in this area, I think it is also essential for us to gain a better understanding of their efforts and to consider some basic questions about their activities. For instance: do state officials have a greater perspective or awareness regarding trends or concerns about financial privacy? What value is provided by preserving a state legislative role? What value is provided by preserving strictly a state enforcement role? How does state activity impact the financial services industry?
"It is my hope that this is just the first of what I hope are a whole series of opportunities to consider this issue. I look forward to a productive and informative dialogue."