WASHINGTON -- President Clinton proposed new financial privacy protections that would require companies to get permission from consumers before sharing information about their medical histories or spending habits.
Clinton's proposal fulfills a vow he made last November while signing a bill permitting mergers of banks, insurers and securities firms. Clinton said that law didn't "go far enough" and promised to seek stronger protections.The president said Sunday that advances in computer technology and the widespread use of electronic transactions offer consumers the benefits of choice and convenience. At the same time, he told graduates of Eastern Michigan University in Ypsilanti, Mich., companies get to learn more about their customers.
"We can't let breakthroughs in technology break down walls of privacy," Clinton said.
Drawing on a Treasury Department study mandated by last year's financial services overhaul law, Clinton proposed to give consumers the right to block sharing of their information within a financial conglomerate or with marketing partners of a company they now do business with.
Companies also would need to obtain a customer's consent before transferring a person's medical information. A similar "opt in" would apply to more specific financial information.
Customers also would have the right to see -- and correct any errors in -- their records being shared, similar to rights related to credit ratings, Clinton said.
The proposal goes beyond the recent legislation, which requires banks to disclose privacy policies to customers, by requiring disclosure of the firm's practices before a person becomes a customer. That would allow people to "comparison shop on privacy policies," a White House summary said.
The protections would have the force of law, as enforced by financial industry regulators or, for unregulated firms, the Federal Trade Commission.