The sanctions for privacy violations in the financial sector are many and are included in the attached paper. The government must assist the private sector in explaining this fact to consumers and global critics. Use of a seal or some other self-certifying measure fails to give the consumer credit for their ability to decide if an institution s privacy policy measures up to public scrutiny. With regulatory sanctions in place and an aggressive media, the consumer is well protected. A seal is a placebo of protection that is no substitute for an institution s own, individually crafted privacy policy.
Financial institutions participate in many forums which can be termed self-regulatory.
The processing of checks, use of automated teller machine networks and rules regarding merchants are all examples where banks band together to assure the free flow of commerce. Good faith dialogue on problems and solutions and the ability of everyone concerned to recognize the necessary balance of information gathering with mandates such as fraud prevention, will prevent overreaction and damage to the emerging electronic commerce market. Posting privacy policies, disclosing those procedures and establishing an internal clearinghouse for problems is best handled by each institution. Flexibility will insure appropriate cost controls and an industry approach to privacy. A legislative approach that does not consider the uniqueness of banking will, by definition, be harmful and cost prohibitive.