Privacy Letter
February 28, 2000
The Honorable William M. Daley
Secretary
Office of the Secretary
Department of Commerce
Room 5854
14th Street & Constitution Avenue, N.W.
Washington, DC 20230
Re: U.S.- EU Privacy Negotiations
Dear Mr. Secretary:
As the U.S.-EU negotiations on privacy enter their critical final stages, the Securities Industry Association's International Trade and Investment Policy Committee is writing you to urge the Administration to continue its efforts to obtain from the EU a declaration that Title V of the Financial Modernization Act, in combination with the Fair Credit Reporting Act (FCRA), constitutes "adequate" protection for personal data handled by the financial services sector in the United States. While we are pleased to hear that recent negotiations have yielded significant progress in narrowing the differences between the U.S. and EU on the design and implementation of the Safe Harbor, the Administration has yet to obtain from the EU a determination of adequacy for the U.S. financial services sector. Such a determination is critical for the financial services sector, and will assure investor and market confidence through the uninterrupted flow of data. We attach a letter previously sent to Ambassador David Aaron and Treasury Under Secretary Tim Geithner describing our views on this issue.
The Committee strongly believes there is no reason for the EU to supplement the extensive privacy scheme that Congress has enacted. Article 25 of the EU Directive requires "adequate" not "equivalent" protection. For this reason we continue strongly to urge the Administration to seek from the EU a determination of adequacy for the financial services sector. If the EU is not willing to find U.S. privacy regulation "adequate," then, at the very least, the Commission and the Member States should defer any determination with respect to the "adequacy" of Title V and the other relevant privacy regulations until the Commission can observe how Title V is interpreted and applied in practice. As you know, this process has already started in the U.S., with the OCC release of proposed rulemaking for implementing the new privacy protections. As a result, we renew our request that the Administration call upon the EU to accompany any such deferral with a specific undertaking to continue the data stoppage standstill for a period of at least 18 months.
The U.S. securities industry is a world leader in providing financial products and services to consumers, and plays a critical role in the job creation process. The securities industry will be actively engaged with the Administration and Congress in refining privacy policies that work to protect consumers without damaging the ability of U.S. firms in an increasingly competitive global economy. However, we strongly believe that U.S. privacy laws should be given the opportunity to succeed before European standards are imported, without the benefit of legislative debate, into the U.S. financial services industry.
Sincerely,
Steve Judge
Senior Vice President,
Government Affairs
Attachment
cc:The Honorable Lawrence H. Summers
The Honorable David L. Aaron
The Honorable Timothy F. Geithner
Mr. Peter Swire