Monday, July 5, 1999
by financial mergersThe issue: Mergers of financial institutions that would be permitted under current congressional legislation could infringe on the right to privacy.THE computer age poses new threats to privacy. Personal data of a confidential nature can easily be transmitted between government agencies and business firms. Federal legislation to reform financial services laws dating from the Depression is a current concern.
Our view: The law should prohibit exchanges of personal information by affiliated as well as outside companies.
The House voted overwhelmingly to give people worried about commercial abuse of information on their buying habits, hobbies and health the right to block banks and other financial companies from sharing their personal data with outside firms. The measure was attached to sweeping legislation that would allow banks, securities firms and insurance companies to merge.
However, the provision would allow financial institutions that are affiliated with each other to share customer data. This is a major loophole.
Consumer activists, including Ralph Nader, have maintained that the financial overhaul legislation would create serious privacy risks. Proponents of the legislation, led by Wall Street and the banking and insurance industries, insist that it is needed to keep the U.S. financial industry competitive in global markets and that it would save consumers millions by providing one-stop financial shopping.
House Democrats, led by Edward Markey, D-Mass., and John Dingell, D-Mich., had pushed a provision that would enable consumers to stop financial companies from sharing their personal data with either affiliated or outside companies, but were outvoted.
The Democrats also objected to a provision that would allow health insurance companies to share medical data with life insurers when people apply for life insurance policies.
To the individual, sharing one's personal data with an affiliated company is no better than sharing it with an outside company. But the opportunity for such sharing is one of the incentives for mergers.
The House action is far from the end of the story. The Senate passed a substantially different version of the overhaul legislation in May, and the two bills must be reconciled before final passage and submission to the president. The White House has threatened a veto of the Senate version, which contains no privacy protection.
For 20 years Congress has wrestled with legislation to restructure the financial services industry, and this year has come closer to enactment than ever before.
Current law is badly outdated. The industry needs flexibility in the law to permit banks, brokerages and insurers to combine -- with some safeguards.
Rep. Jim Leach, R-Iowa, chairman of the House Banking Committee, told reporters that privacy is "an issue that Congress is going to have to continue to examine." The privacy issue is too important to be ignored.
Scottish ParliamentThe issue: The first Scottish Parliament in nearly 300 years was opened by Queen Elizabeth II.HISTORY was made in Edinburgh, Scotland, Thursday when Queen Elizabeth II opened Scotland's first Parliament in nearly 300 years. In a traditional display, the queen rode to the Parliament building in an open, horse-drawn carriage, escorted by members of the Household Cavalry from the Palace of Holyroodhouse, her Scottish residence. She was accompanied by her husband, Prince Philip, and heir, Prince Charles.
Our view: The question is whether the new Scottish Parliament and Welsh Assembly will satisfy the nationalists or whether they will demand full independence.
Standing behind the Crown of Scotland, the queen opened the Parliament with the words: "My prayers are with you all as you embark on this new and historic journey."
Elizabeth, whose mother is the daughter of a Scottish earl, presented Parliament with a silver mace, symbolizing authority. Earlier, the Duke of Hamilton, head of Scotland's leading clan, carried the crown from Edinburgh Castle on a velvet cushion.
After the ceremony, a procession of 1,600 schoolchildren carrying banners from across Scotland walked past the queen, who sat in an open-air podium along Edinburgh's Royal Mile. The steep, cobblestoned thoroughfare is the same street where members passed when the last Scottish Parliament met before the 1707 Act of Union with England. In 1997 the British Labor government held referendums to determine whether residents of Scotland and Wales supported the establishment of legislatures with control over local affairs. Voters endorsed the formation of both bodies. Wales had never before had its own legislature.
Last May elections were held for the new Scottish Parliament and Welsh Assembly, with the Labor Party winning pluralities in both bodies.
The Labor Party hopes the granting of home rule will head off nationalist demands for full independence for Scotland. But a leader of the Scottish National Party, the second largest group in the Scottish Parliament, commented, "As a rehearsal for independence day this is fantastic."
The new Parliament has the power to raise taxes and legislate on a number of domestic issues such as education, health care, law enforcement, housing and the environment. The Welsh Assembly has similar responsibilities but no tax powers.
Whether the Scots and Welsh will be satisfied with their new home rule or demand full independence is the crucial question, yet to be answered.
Fortunately the dispute has been conducted without the distressing violence of the conflict in Northern Ireland.
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