Discussions of budgets, taxation and health care justifiably dominate this year’s legislative session in Augusta. However, an important discussion about the privacy of your personal financial information – and the largely unfettered sharing, or even selling of it among financial institutions – has not received much public attention. LD 661, an act to amend the laws governing privacy of consumer financial information, seeks to give you control over your private information.

In November 1999, the United States Congress enacted the Financial Services Modernization Act, also known as the Gramm-Leach-Bliley Act. The primary purpose of the law was to update federal regulation of the financial services industry. Just prior to enactment, Congress added consumer privacy provisions to the bill, which gave consumers limited rights to privacy notice and consent regarding the information-sharing practices of financial institutions. The act gives you a right to “opt-out,” which means these companies are free to share or sell your personal financial information unless you expressly tell them not to – otherwise, incredibly, your consent is assumed.

The types of information that may be shared include not only your name, address and phone number, but more disturbingly your account balances, a record of your assets and income, your credit card purchases, debt level, late payments, and any other information you provide in a loan application. This information may be freely shared among banks, credit unions, insurance companies, mortgage companies and other financial service companies.

In the interests of uniformity between state and federal regulation of financial services the Maine Legislature passed a bill in spring 2001conforming Maine law to Gramm-Leach-Bliley, including weakening Maine’s privacy standard to “opt-out”. I was then a member of what is now the Insurance and Financial Services Committee, and joined a majority of my colleagues on the committee in supporting conformity to federal law – except when it came to undermining Maine’s consumer privacy protections. We supported an “opt-in” standard, which would require financial institutions to obtain your express consent before sharing or selling your personal financial information.

While federal law and regulations clearly allow for individual states to have tougher consumer privacy protections such as “opt-in,” and even allow states to regulate the privacy practices of out of state institutions, lobbyists hired by banks and insurance companies worked day and night to convince legislators this was not the case. Sadly, they succeeded.

Aside from the philosophical argument against allowing the sale of your property without your consent (or knowledge in some instances), there are practical reasons to oppose “opt-out,” such as the increased potential for identity theft resulting from the uncontrolled dissemination of this sensitive information.

Identity theft is the illegal collection of personal financial information, usually gained through electronic means, used to gain access to individual finances (credit cards, bank accounts, etc.). According to the Federal Trade Commission, identity theft is the number one consumer complaint in the country (43 percent of all complaints). In Maine, people make complaints of electronic fraud at rates higher than in New York, Texas or Georgia. In 2002, Maine people filed 306 complaints of identity theft, and 788 complaints of electronic fraud.

For Maine victims of these crimes, the average cost of correcting the damage to their finances and credit is $795. But the costs to our economy from consumers’ worries about privacy may be far greater. According to a 2000 Federal Trade Commission report, the cost to Internet retailers from sales lost to consumers worried about their privacy was approximately $18 billion. There are also untallied, but doubtlessly significant, costs of legal services for financial institutions complying with the awkward “opt-out” standard and costs that U.S. businesses who engage in international trade incur in meeting tougher privacy standards of the European Union and other trading partners.

The opt-out standard is patently defective. While news reports suggest that only 5 percent of consumers have “opted-out” nationally, a 2000 Gallup poll reflects that 84 percent of Americans believe it is “very important” that financial information be kept confidential. These data clearly suggest a disconnect between what consumers want – privacy – and their understanding of their rights – “opting-out”. Maine law gives consumers grossly inadequate control over how their personal financial information will be shared

Despite my concerns, LD 661 does not repeal the “opt-out” standard outright. Instead, it puts the question to you, Maine voters, in a statewide referendum. It asks you what standard you prefer when it comes to how your personal information (your property, really) may be used. Tellingly, a lobbyist working for the insurance industry told members of the Insurance and Financial Services Committee that this issue is too complicated to send to the voters, implying that voters won’t adequately be able to determine what’s in their best interest.

In a referendum last June, North Dakota voters felt confident enough in their understanding of this issue and overwhelmingly favored “opt-in,” requiring financial services companies to get permission first.

So I join the Maine Attorney General, the AARP, the Maine Civil Liberties, the Maine People’s Alliance, Common Cause and other organizations in saying voters can handle it: “Let ME decide.”

Ben Dudley is a Democratic state representative from District 30 in Portland.