| March 28, 2006
The Honorable Joe Barton
Chairman
House Committee on Energy and Commerce
212 Rayburn House Office Building
Washington, DC 20515
Dear Chairman Barton:
I am writing to express the concern of America”s Community Bankers about H.R.
4127 and the manager’s amendment proposed on March 22, 2006. While we appreciate
your long-standing efforts to protect consumers and their personal information,
we believe that your proposed legislation could add costly and duplicative
burdens to our nation’s financial institutions.
As you know, Title V of the Gramm-Leach-Bliley Act (GLBA) requires financial
institutions to “insure the security and confidentiality of customer records and
information,” and to “protect against unauthorized access to or use of such
records or information which could result in substantial harm or inconvenience
to any customer.” As regulated entities, ACB’s members have been examined for
compliance with these requirements for the past five years. More recently, our
nation’s bank regulators updated their regulations to require banks to notify
their customers of a breach that results in the likelihood of their information
being misused.
H.R. 4127 and the proposed manager’s amendment would create the possibility of
financial institutions being subject to both the regulatory system created under
GLBA, with functional enforcement, and that under H.R. 4127 with Federal Trade
Commission (FTC) and state Attorney General enforcement. The legislation grants
the FTC the discretion to exempt institutions from data safeguard and document
destruction requirements if it feels that existing laws “provide equal or
greater protection than those required under,” the bill. Allowing the FTC to
become the consumer protection “super regulator” is troubling for ACB’s members.
Forcing our nation’s financial institutions to comply with multiple and
potentially conflicting data protection regimes would be saddling them with
unnecessary regulations. Banks are among the most heavily regulated entities in
the nation. H.R. 4127 could significantly increase these burdens.
In addition, allowing state attorneys general to enforce the provisions of H.R.
4127 for federally chartered institutions breaks with the established framework
for our nation’s dual banking system, whereby states enforce laws for entities
they charter and federal regulators enforce laws for institutions they charter.
Changing this system would be detrimental to our nation’s banking system.
We urge the committee to adopt language that will clarify the bill to exempt
those institutions that have existing legal requirements to safeguard customer
information under GLBA. This will ensure that those who are currently
unregulated and have no obligation to safeguard customer information will have
an affirmative requirement to do so, while at the same time not adding new,
unnecessary or burdensome requirements to those institutions that have been
protecting customer information for years.
Thank you for your time and attention to this important issue.
Sincerely,
Robert R. Davis
Executive Vice President and
Managing Director, Government Relations
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