I
106TH CONGRESS
1ST SESSION
H. R. 30
To protect consumers and financial institutions by preventing personal finan-
cial information from being obtained from financial institutions under
false pretenses.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 6, 1999
Mr. LEACH (for himself, Mrs. ROUKEMA, Mr. LAZIO, Mr. CASTLE, Mr. LA-
FALCE, Mr. HINCHEY, and Mr. VENTO) introduced the following bill;
which was referred to the Committee on Banking and Financial Services
A BILL
To protect consumers and financial institutions by preventing
personal financial information from being obtained from
financial institutions under false pretenses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Financial Information
Privacy Act of 1999’’.
SEC. 2. FINANCIAL INFORMATION PRIVACY.
The Consumer Credit Protection Act (15 U.S.C.
1601 et seq.) is amended by adding at the end the follow-
ing:
‘‘TITLE X—FINANCIAL INFORMA-
TION PRIVACY PROTECTION
‘‘SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.
‘‘(a) SHORT TITLE.—This title may be cited as the
‘Financial Information Privacy Act of 1999’.
‘‘(b) TABLE OF CONTENTS.—The table of contents
for this title is as follows:
‘‘TITLE X—FINANCIAL INFORMATION PRIVACY PROTECTION
‘‘Sec. 1001. Short title; table of contents.
‘‘Sec. 1002. Definitions.
‘‘Sec. 1003. Privacy protection for customer information of financial institu-
tions.
‘‘Sec. 1004. Administrative enforcement.
‘‘Sec. 1005. Civil liability.
‘‘Sec. 1006. Criminal penalty.
‘‘Sec. 1007. Relation to State laws.
‘‘Sec. 1008. Agency guidance.
‘‘SEC. 1002. DEFINITIONS.
‘‘For purposes of this title, the following definitions
shall apply:
‘‘(1) CUSTOMER.—The term ‘customer’ means,
with respect to a financial institution, any person (or
authorized representative of a person) to whom the
financial institution provides a product or service,
including that of acting as a fiduciary.
‘‘(2) CUSTOMER INFORMATION OF A FINANCIAL
INSTITUTION.—The term ‘customer information of a
financial institution’ means any information main-
tained by a financial institution which is derived
from the relationship between the financial institu-
tion and a customer of the financial institution and
is identified with the customer.
‘‘(3) DOCUMENT.—The term ‘document’ means
any information in any form.
‘‘(4) FINANCIAL INSTITUTION.—
‘‘(A) IN
GENERAL.—The term ‘financial
institution’ means any institution engaged in
the business of providing financial services to
customers who maintain a credit, deposit, trust,
or other financial account or relationship with
the institution.
‘‘(B) CERTAIN
FINANCIAL
INSTITUTIONS
SPECIFICALLY INCLUDED.—The term ‘financial
institution’ includes any depository institution
(as defined in section 19(b)(1)(A) of the Fed-
eral Reserve Act), any loan or finance company,
any credit card issuer or operator of a credit
card system, and any consumer reporting agen-
cy that compiles and maintains files on consum-
ers on a nationwide basis (as defined in section
603(p)).
‘‘(C) FURTHER DEFINITION BY REGULA-
TION.—The Board of Governors of the Federal
Reserve System may prescribe regulations fur-
ther defining the term ‘financial institution’, in
accordance with subparagraph (A), for purposes
of this title.
‘‘SEC. 1003. PRIVACY PROTECTION FOR CUSTOMER INFOR-
MATION OF FINANCIAL INSTITUTIONS.
‘‘(a) PROHIBITION ON OBTAINING CUSTOMER INFOR-
MATION BY FALSE PRETENSES.—It shall be a violation
of this title for any person to obtain or attempt to obtain,
or cause to be disclosed or attempt to cause to be disclosed
to any person, customer information of a financial institu-
tion relating to another person—
‘‘(1) by knowingly making a false, fictitious, or
fraudulent statement or representation to an officer,
employee, or agent of a financial institution with the
intent to deceive the officer, employee, or agent into
relying on that statement or representation for pur-
poses of releasing the customer information;
‘‘(2) by knowingly making a false, fictitious, or
fraudulent statement or representation to a cus-
tomer of a financial institution with the intent to de-
ceive the customer into relying on that statement or
representation for purposes of releasing the cus-
tomer information or authorizing the release of such
information; or
‘‘(3) by knowingly providing any document to
an officer, employee, or agent of a financial institu-
tion, knowing that the document is forged, counter-
feit, lost, or stolen, was fraudulently obtained, or
contains a false, fictitious, or fraudulent statement
or representation, if the document is provided with
the intent to deceive the officer, employee, or agent
into relying on that document for purposes of releas-
ing the customer information.
‘‘(b) PROHIBITION ON SOLICITATION OF A PERSON
TO OBTAIN CUSTOMER INFORMATION FROM A FINANCIAL
INSTITUTION UNDER FALSE PRETENSES.—It shall be a
violation of this title to request a person to obtain cus-
tomer information of a financial institution, knowing or
consciously avoiding knowing that the person will obtain,
or attempt to obtain, the information from the institution
in any manner described in subsection (a).
‘‘(c) NONAPPLICABILITY
TO LAW ENFORCEMENT
AGENCIES.—No provision of this section shall be con-
strued so as to prevent any action by a law enforcement
agency, or any officer, employee, or agent of such agency,
to obtain customer information of a financial institution
in connection with the performance of the official duties
of the agency.
‘‘(d) NONAPPLICABILITY
TO FINANCIAL INSTITU-
TIONS IN CERTAIN CASES.—No provision of this section
shall be construed to prevent any financial institution, or
any officer, employee, or agent of a financial institution,
from obtaining customer information of such financial in-
stitution in the course of—
‘‘(1) testing the security procedures or systems
of such institution for maintaining the confidential-
ity of customer information;
‘‘(2) investigating allegations of misconduct or
negligence on the part of any officer, employee, or
agent of the financial institution; or
‘‘(3) recovering customer information of the fi-
nancial institution which was obtained or received by
another person in any manner described in sub-
section (a) or (b).
‘‘(e) NONAPPLICABILITY
TO CERTAIN TYPES
OF
CUSTOMER
INFORMATION
OF
FINANCIAL
INSTITU-
TIONS.—No provision of this section shall be construed to
prevent any person from obtaining customer information
of a financial institution that otherwise is available as a
public record filed pursuant to the securities laws (as de-
fined in section 3(a)(47) of the Securities Exchange Act
of 1934).
‘‘SEC. 1004. ADMINISTRATIVE ENFORCEMENT.
‘‘(a) ENFORCEMENT BY FEDERAL TRADE COMMIS-
SION.—Except as provided in subsection (b), compliance
with this title shall be enforced by the Federal Trade Com-
mission in the same manner and with the same power and
authority as the Commission has under the Fair Debt Col-
lection Practices Act to enforce compliance with that title.
‘‘(b) ENFORCEMENT BY OTHER AGENCIES IN CER-
TAIN CASES.—
‘‘(1) IN GENERAL.—Compliance with this title
shall be enforced under—
‘‘(A) section 8 of the Federal Deposit In-
surance Act, in the case of—
‘‘(i) national banks, and Federal
branches and Federal agencies of foreign
banks, by the Office of the Comptroller of
the Currency;
‘‘(ii) member banks of the Federal
Reserve System (other than national
banks), branches and agencies of foreign
banks (other than Federal branches, Fed-
eral agencies, and insured State branches
of foreign banks), commercial lending com-
panies owned or controlled by foreign
banks, and organizations operating under
section 25 or 25A of the Federal Reserve
Act, by the Board;
‘‘(iii) banks insured by the Federal
Deposit Insurance Corporation (other than
members of the Federal Reserve System
and national nonmember banks) and in-
sured State branches of foreign banks, by
the Board of Directors of the Federal De-
posit Insurance Corporation; and
‘‘(iv) savings associations the deposits
of which are insured by the Federal De-
posit Insurance Corporation, by the Direc-
tor of the Office of Thrift Supervision; and
‘‘(B) the Federal Credit Union Act, by the
Administrator of the National Credit Union Ad-
ministration with respect to any Federal credit
union.
‘‘(2) VIOLATIONS OF THIS TITLE TREATED AS
VIOLATIONS OF OTHER LAWS.—For the purpose of
the exercise by any agency referred to in paragraph
(1) of its powers under any Act referred to in that
paragraph, a violation of this title shall be deemed
to be a violation of a requirement imposed under
that Act. In addition to its powers under any provi-
sion of law specifically referred to in paragraph (1),
each of the agencies referred to in that paragraph
may exercise, for the purpose of enforcing compli-
ance with this title, any other authority conferred on
such agency by law.
‘‘(c) STATE ACTION FOR VIOLATIONS.—
‘‘(1) AUTHORITY OF STATES.—In addition to
such other remedies as are provided under State
law, if the chief law enforcement officer of a State,
or an official or agency designated by a State, has
reason to believe that any person has violated or is
violating this title, the State—
‘‘(A) may bring an action to enjoin such
violation in any appropriate United States dis-
trict court or in any other court of competent
jurisdiction;
‘‘(B) may bring an action on behalf of the
residents of the State to recover damages of not
more than $1,000 for each violation; and
‘‘(C) in the case of any successful action
under subparagraph (A) or (B), shall be award-
ed the costs of the action and reasonable attor-
ney fees as determined by the court.
‘‘(2) RIGHTS OF FEDERAL REGULATORS.—
‘‘(A) PRIOR
NOTICE.—The State shall
serve prior written notice of any action under
paragraph (1) upon the Federal Trade Commis-
sion and, in the case of an action which involves
a financial institution described in section
1004(b)(1), the agency referred to in such sec-
tion with respect to such institution and provide
the Federal Trade Commission and any such
agency with a copy of its complaint, except in
any case in which such prior notice is not fea-
sible, in which case the State shall serve such
notice immediately upon instituting such action.
‘‘(B) RIGHT TO INTERVENE.—The Federal
Trade Commission or an agency described in
subsection (b) shall have the right—
‘‘(i) to intervene in an action under
paragraph (1);
‘‘(ii) upon so intervening, to be heard
on all matters arising therein;
‘‘(iii) to remove the action to the ap-
propriate United States district court; and
‘‘(iv) to file petitions for appeal.
‘‘(3) INVESTIGATORY
POWERS.—For purposes
of bringing any action under this subsection, no pro-
vision of this subsection shall be construed as pre-
venting the chief law enforcement officer, or an offi-
cial or agency designated by a State, from exercising
the powers conferred on the chief law enforcement
officer or such official by the laws of such State to
conduct investigations or to administer oaths or af-
firmations or to compel the attendance of witnesses
or the production of documentary and other evi-
dence.
‘‘(4) LIMITATION
ON
STATE
ACTION
WHILE
FEDERAL ACTION PENDING.—If the Federal Trade
Commission or any agency described in subsection
(b) has instituted a civil action for a violation of this
title, no State may, during the pendency of such ac-
tion, bring an action under this section against any
defendant named in the complaint of the Federal
Trade Commission or such agency for any violation
of this title that is alleged in that complaint.
‘‘SEC. 1005. CIVIL LIABILITY.
‘‘Any person, other than a financial institution, who
fails to comply with any provision of this title with respect
to any financial institution or any customer information
of a financial institution shall be liable to such financial
institution or the customer to whom such information re-
lates in an amount equal to the sum of the amounts deter-
mined under each of the following paragraphs:
‘‘(1) ACTUAL DAMAGES.—The greater of—
‘‘(A) the amount of any actual damage
sustained by the financial institution or cus-
tomer as a result of such failure; or
‘‘(B) any amount received by the person
who failed to comply with this title, including
an amount equal to the value of any nonmone-
tary consideration, as a result of the action
which constitutes such failure.
‘‘(2) ADDITIONAL DAMAGES.—Such additional
amount as the court may allow.
‘‘(3) ATTORNEYS’ FEES.—In the case of any
successful action to enforce any liability under para-
graph (1) or (2), the costs of the action, together
with reasonable attorneys’ fees.
‘‘SEC. 1006. CRIMINAL PENALTY.
‘‘(a) IN GENERAL.—Whoever violates, or attempts to
violate, section 1003 shall be fined in accordance with title
18, United States Code, or imprisoned for not more than
5 years, or both.
‘‘(b) 
ENHANCED
PENALTY
FOR
AGGRAVATED
CASES.—Whoever violates, or attempts to violate, section
1003 while violating another law of the United States or
as part of a pattern of any illegal activity involving more
than $100,000 in a 12-month period shall be fined twice
the amount provided in subsection (b)(3) or (c)(3) (as the
case may be) of section 3571 of title 18, United States
Code, imprisoned for not more than 10 years, or both.
‘‘SEC. 1007. RELATION TO STATE LAWS.
‘‘(a) IN GENERAL.—This title shall not be construed
as superseding, altering, or affecting the statutes, regula-
tions, orders, or interpretations in effect in any State, ex-
cept to the extent that such statutes, regulations, orders,
or interpretations are inconsistent with the provisions of
this title, and then only to the extent of the inconsistency.
‘‘(b) GREATER PROTECTION UNDER STATE LAW.—
For purposes of this section, a State statute, regulation,
order, or interpretation is not inconsistent with the provi-
sions of this title if the protection such statute, regulation,
order, or interpretation affords any person is greater than
the protection provided under this title.
‘‘SEC. 1008. AGENCY GUIDANCE.
‘‘In furtherance of the objectives of this title, each
Federal banking agency (as defined in section 3(z) of the
Federal Deposit Insurance Act) shall issue advisories to
depository institutions under the jurisdiction of the agen-
cy, in order to assist such depository institutions in deter-
ring and detecting activities proscribed under section
1003.’’.
SEC. 3. REPORT TO CONGRESS ON FINANCIAL PRIVACY.
Not later than 18 months after the date of enactment
of this Act, the Comptroller General of the United States,
in consultation with the Federal Trade Commission, the
Federal banking agencies, and other appropriate Federal
law enforcement agencies, shall submit to the Congress a
report on—
(1) the efficacy and adequacy of the remedies
provided in the amendments made by section 501 in
addressing attempts to obtain financial information
by fraudulent means or by false pretenses; and
(2) any recommendations for additional legisla-
tive or regulatory action to address threats to the
privacy of financial information created by attempts
to obtain information by fraudulent means or false
pretenses.
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