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Sen. Shelby Seeks to Put His Own Stamp on Legislation

Things may be different now that Senator Richard Shelby (R-AL) has taken over as Chairman of the Senate Banking Committee. Shelby has succeeded former...
March 10, 2003

Powerful Committee Chairman Shares Basic PIA Principles

By Peter Bizzozero
Assistant Vice President, Federal Affairs
PIA National

Things may be different now that Senator Richard Shelby (R-AL) has taken over as Chairman of the Senate Banking Committee. Shelby has succeeded former Senator Phil Gramm (R-TX) as head of the powerful panel, where he is poised to put his stamp on legislation. Shelby's views differ significantly from Gramm's, and are sometimes at odds with those of his House counterpart, Financial Services Committee Chairman Michael Oxley (R-OH).

While differences on the part of a powerful Committee chairman can sometimes slow the legislative process, some of the basic principles that form the underpinnings of Shelby's philosophy occupy common ground with the principles of PIA.

A Matter of Principle

Shortly after assuming the chairmanship of the Banking Committee, Shelby outlined some of his legislative priorities in a wide-ranging interview with the Bureau of National Affairs (BNA). Shelby said he is not willing to moderate his views about such controversial issues as privacy and the preemption of state law simply because of his new role as chairman or because his views may run contrary to the financial services lobby.

Here's a look at where Shelby stands on a key issue for PIA: privacy.

Shelby has a steadfast commitment to privacy. He said he believes the Gramm-Leach-Bliley Act (GLBA) did not go far enough in giving consumers control over how financial institutions use their personal data. In fact, in 1999 he voted against the GLBA because of concerns over how the legislation would handle consumer privacy. Shelby favors adopting an "opt-in" instead of an "opt-out" standard for obtaining consumers' permission to share their data. In December he told consumer advocates that, "If I could require 'opt-in' rather than 'opt-out' on the federal level, heck, I'd do it." He also told them he would work to allow states to enact tougher privacy regulations than those required by GLBA. He has called the manner in which financial institutions send out privacy notices "a sham."

Industry concerns that a myriad of state laws would increase costs and hurt their ability to offer products tailored to customer needs do not sway Shelby. "I do not think that's [continued federal preemption] going to happen," Shelby said. "I can't see taking away states' rights to stronger privacy laws."

Shelby said his committee is going to consider the reauthorization of the Federal Credit Reporting Act (FCRA) later in the year and schedule several hearings on the question, possibly as soon as this summer. Shelby predicts the debate surrounding renewal of FCRA "will elevate the debate over financial privacy beyond the terms of the law itself," and he has hinted that he is against federal preemption of stricter state privacy standards.

"I have always found it somewhat interesting, that when we talk about individuals' desire to protect personal information about themselves we call it privacy and when we discuss safeguarding institutions and business information we call it security," Shelby recently told the Consumer Federation of America. "I continue to believe that the balance struck in Gramm-Leach-Bliley was insufficient, and that individuals should have greater control and choice in how their financial information is shared and sold." He has also noted that the FCRA debate would be Congress' best opportunity to address financial privacy issues.

Chairman Shelby's support of privacy, his respect for state regulation, his reticence to defer to federal preemption in all cases and his willingness to chart an independent course all indicate he is close in philosophy to our views. This bodes well for PIA member agents.

Peter Bizzozero is Assistant Vice President of Federal Affairs for PIA National. He represents PIA's interests on Capitol Hill. He can be reached at peterbi@pianet.org

This article originally appeared in the March 2003 PIA Connection.

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