FINANCIAL INFORMATION NEEDS PROTECTION

As Congress moves toward sweeping legislation that would remove Depression-era barriers between banks, brokerages and insurers and allow them to merge, there is growing concern about the privacy of consumers who would use the new consolidated financial companies. The concern is for good reason.

What could happen is that once restrictions are lifted and financial services begin to merge -- thereby enabling the offering of an abundance of financial services under one company -- customer information that always had been held in strict confidence would be passed about. As more mergers take place, which is certain to happen, those companies would gain access to information about consumers that they previously did not have, to the businesses' benefit, of course.

The possibilities of how confidential information would be passed among the newly created companies is endless. Before long that information would be shared and sold by so many companies that financial data concerning consumers no longer would be confidential.

Circulation of any of the consumer information on the Internet, which is bound to happen, would further threaten to violate customer information protection, and that would greatly interfere with online commerce.

Consumer protection is absolutely necessary, and to that end a large contingent in Congress is pushing for legislation that would give consumers the right to stop the sharing of personal financial data should the barriers between the financial services be lifted. President Clinton has urged adoption of such legislation. Rep. Edward Markey, D-Mass., has introduced a proposal that not only allow consumers to opt out, but also prohibit financial companies from selling personal data to outside firms without the consumer's express written consent.

With the wealth of communications and media services at the fingertips of Americans, consumers will find it more difficult to keep their names and addresses and more importantly personal information out of the hands of businesses and people they don't want to have it. Congress has an opportunity to do something about it before that happens.