Davis Vows to Help Write, Sign Tough Privacy-Protection Law

SACRAMENTO —  Gov. Gray Davis vowed Wednesday to help craft and sign the toughest consumer privacy bill in the nation, even as a legislator carrying the legislation charged that the governor is pushing amendments that would weaken her measure.

After hours of sniping between Davis’ aides and Sen. Jackie Speier (D-Hillsborough), Davis said late Wednesday in an interview that his “goal is to adopt a national standard, and be the flag-bearer for the rest of America.”

The bill he signs will be “the strongest privacy bill in America,” Davis said.

Davis also pledged to sign legislation that seeks to severely limit what he called “irritating phone calls” from telemarketers. That bill, SB 771, by Sen. Liz Figueroa (D-Fremont), would bar telemarketers from calling people who register on a state-sponsored list.

Some business lobbyists complain the bill would block companies from reaching out to new and existing customers of their affiliated firms. Other commercial interests, including the California Bankers Assn., have split with their traditional allies and support the Figueroa bill.

On the broader privacy legislation, Davis insisted that when the current legislative session ends, “you’ll see a bill that is a vast improvement over federal law, extends Californians far more privacy rights than the rest of America, but does it without creating massive unemployment or disruption to the economy.”

The governor’s comments came after Speier balked at accepting administration-backed amendments to her legislation, which is aimed at giving consumers more privacy in their financial affairs.

“There are many elements in the governor’s most recent amendments,” said Speier, “that I don’t believe he is aware of, that are industry-driven and create a fig leaf for privacy. But for all intents and purposes, everyone is naked.”

Shelley Curran, lobbyist for Consumers Union, one of the leading proponents of Speier’s bill, also panned Davis’ proposal, saying, “It significantly weakens the bill.”

Speier’s legislation, SB 773, seeks to limit the power of banks, lenders and other companies to sell personal information to other businesses that peddle credit cards, offer home equity loans or sell other products and services.

The bill would require that financial institutions obtain written or electronic consent of consumers before sharing or selling the consumer’s confidential information with any nonaffiliated company. Current federal law allows companies to share or sell such information unless consumers tell them not to.

The information in question is the “most intimate financial information” people have, Speier said.

The bill is emerging as one of the most heavily lobbied measures in the closing weeks of the legislative session. Business interests, including major banks, credit card companies, much of the insurance industry and direct marketing firms, are opposing it. Some advocates of ensuring that estranged parents pay child support also oppose the bill.

On the other side, Speier’s proposal is being backed by several consumer advocacy groups, California Atty. Gen. Bill Lockyer and some insurance firms. Advocates of the measure cite polls showing that privacy protection is a major concern of Californians.

Earlier in the day, Speier’s refusal to embrace the administration’s proposals prompted Davis’ chief of staff, Lynn Schenk, to call a key Assembly committee chairwoman to ask that a vote on the bill be put off.

The call to Appropriations Committee Chairwoman Carole Migden (D-San Francisco) further angered Speier.

“[Schenk] didn’t give me the courtesy of a phone call--just did it--after I’ve acted in good faith, meeting with the governor’s staff, trying to work things out,” Speier said after the vote was put off.

Davis administration officials defended Schenk’s action, saying Speier’s measure needs additional work. Migden also defended Schenk, and said she doubts Speier had sufficient votes Wednesday to win committee approval of the bill.

A key issue in the debate is whether companies that are not affiliated with each other would be allowed to enter into joint-marketing agreements under which they could share consumers’ information. Speier wants to limit such agreements, while Davis’ proposal appears to permit them. Consumer groups fear that joint-marketing agreements could become pervasive and would allow companies to short-circuit the bill’s requirement to get consumer consent before sharing information.

Also under Speier’s bill, companies would be prohibited from blackballing consumers who refuse to permit their information to be traded or sold. And consumers would gain the right to sue if their information was misused. This particularly has alarmed business groups.

Davis’ proposal would eliminate the ability of individuals to sue, instead leaving enforcement up to the state attorney general or local prosecutors.

Under Speier’s proposal, violators would face fines of up to $250,000 for repeated violations. The maximum fine under Davis’ proposal would be $25,000.

Davis aides say their version would impose additional penalties for identity theft and ensure that deadbeat parents could be tracked.

Davis aides said Speier’s bill is so restrictive that it would inhibit some types of Internet advertising and make it more difficult for home buyers to find the lowest prices on insurance.

“We want to take the time to make it right,” said Kari Dohn, one of the governor’s top aides working on the legislation.

While Davis’ aides say they want to increase the attorney general’s power to crack down on violators, Lockyer’s spokesman, Nathan Barankin, offered a tepid response to the amendments, saying the office is “reviewing” Davis’ proposal.

“The attorney general supports the Speier bill as it is written and thinks the Speier bill as written provides meaningful protections for consumers,” Barankin said.

Davis, noting that he met with Speier two weeks ago, went out of his way to praise the legislator.

“I would prefer the author be Jackie Speier,” Davis said. “But what matters is that privacy benefits be extended to Californians, and that is going to happen.”

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Times staff writer Carl Ingram contributed to this story.