The U.S. Bancorp settlement got a lot of people's attention, not least a group of state attorneys general. The author has extensive experience in banking issues relating to money laundering, privacy, and electronic funds transfer, and has worked closely with ABA on several committees and task forces. If anything, the new financial modernization law will make it even hotter because it imposes relatively modest restrictions on the use of customer data.
Consumers are legitimately concerned about the potential release of their information to others.
Businesses, including banks, are aware of the importance of customer data to their continued existence, as their ability to provide innovative products and services to customers is directly linked to data mining. Yet the sharing of customer data with others can be fraught with danger, and banks must be extremely careful about how and when they share such data. Recently, much press has been given to the sale by banks of personally identifiable customer data to third parties. Operating Rules, Minnesota's Prevention of Consumer Fraud Act, Minnesota's False Advertising Act, and Minnesota's Deceptive Trade Practices Act. Allegedly MemberWorks used this confidential information to market membership service programs to consumers.