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Current Events - 06/17/2002

North Dakota voters pass "opt in" ballot initiative

Notwithstanding an all-out effort by banks and credit unions, voters in North Dakota voted to restore an "opt-in" scheme for financial privacy and to throw out an "opt-out" scheme that the Legislature had enacted. 74 percent of the voters rejected the opt-out in favor of opt-in. If you will recall the polling that we conducted earlier this year, that 74 percent is consistent with the support level for opt-in here in California.

The group opposing the opt-out law that the Legislature had enacted was named "Protect our Privacy." Apparently the banking industry used economic arguments but they did not succeed against "Protect our Privacy."

We can be certain that the San Francisco Chronicle, Senator Speier, Consumers Union, AARP and privacy advocates will try to make much of this vote, especially since North Dakota is a conservative state and controlled by Republicans in the same way that California is controlled by Democrats. Since we are facing an election this November this type of result will make our job a little more difficult. Our meetings with members in the district will be a key part of defense against SB 773.

However, even if we succeed legislatively, we still face the possibility of a privacy initiative in the future. Based on what happened in North Dakota that could be a real problem.

E-Loan back in privacy debate

It appears that E-Loan, an early supporter of SB 773 (Speier) is back into the privacy debate. In a recent and open letter to the Office of Privacy Protection, an E-Loan executive again made his support for SB 773 known and encouraged the head of the OPP to force Gov. Davis to support the legislation as well. Some are saying that E-Loan is building its Internet-based business around an opt-in model, which is considerably easier for electronic-based organizations than brick-and-mortar companies. Should SB 773 or some sort of opt-in legislation be passed, E-Loan's early adoption of such standards would give them a clear advantage in the marketplace.

Social Security direct deposits - Advice from Oklahoma

The Oklahoma Bankers Association is offering its members this piece of advice:

"If your bank offers overdraft privilege and your customers would be upset if checks were bounced because of the court's ruling in the 9th Circuit, it may be possible to accommodate the customer by setting up an additional free checking/overdraft privilege account that the customer would then begin to use as his or her basic account. Leave the existing account into which the direct deposits from Social Security are made in place, but use the new account for basic check-writing purposes.

"(OBA) visited with (OBA) lawyers here, and they both seem tot hink that IF there are no Social Security (or VA) checks deposited to this new account, AND IF the customer understands the necessity to transfer the direct deposit from the "old" account to the "new" account after it is received, AND IF such a transfer is made with the customer's written instructions, then that should take care of the court's concern about offsetting against a direct deposit of a Social Security or VA benefit to cover the amount of an overdraft."

Fundraiser for Rep. Becerra

CBA and Pacific Crest Bank will be holding a fundraiser for Congressman Xavier Becerra at the Ritz Carlton Huntington Hotel & Spa on July 1 from noon until 1:30 p.m. Admission to the fundraiser will be a minimum contribution of $500 to Becerra for Congress, Becerra's re-election campaign. If you have questions about the event, would like to attend, or would like to make a contribution to Becerra's campaign but cannot make the fundraiser on July 1, please contact CBA's Mary Maybie at mmaybie@calbankers.com or 916/441-7377 ext. 207.

In-District Meetings

The following meetings have been scheduled between CBA members and their elected officials. If you would like more information on these meetings, or would like to participate in any of the meetings, please contact Mary Maybie at (916) 441-7377, ext. 207. If you are not available, please consider sending an officer from your institution.

* Rescheduled June 7, 2002 meeting date
** Rescheduled May 31, 2002 meeting date
*** Rescheduled June 21, 2002 meeting date