I
105TH CONGRESS
2D SESSION
H. R. 4321
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
JULY 23, 1998
Mr. LEACH (for himself, Mr. LAZIO of New York, Mr. CASTLE, Mr. LAFALCE,
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 1998’’.
SEC. 2. FINANCIAL INFORMATION PRIVACY.
(a) IN GENERAL.—The Consumer Credit Protection
Act (15 U.S.C. 1601 et seq.) is amended by adding at
the end the following:
‘‘TITLE X—FINANCIAL INFORMA-
TION PRIVACY PROTECTION
‘‘§ 1001. Short title
‘‘This title may be cited as the ‘Financial Information
Privacy Act’.
‘‘§ 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 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 identifiable to 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 broker or dealer in in-
vestment securities, any insurance company,
any loan or finance company, any investment
adviser or investment company, any credit card
issuer or operator of a credit card system, and
any consumer reporting agency that compiles
and maintains files on consumers on a nation-
wide basis (as defined in section 603(p)).
‘‘(C) FURTHER DEFINITION BY REGULA-
TION.—The Federal Trade Commission may
prescribe regulations clarifying or describing
the types of institutions which shall be treated
as financial institutions for purposes of this
title.
‘‘§ 1003. Privacy protection for customer information
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—
‘‘(1) by knowingly making a false, fictitious, or
fraudulent statement or representation to an officer,
employee, or agent of a financial institution;
‘‘(2) by knowingly making a false, fictitious, or
fraudulent statement or representation to a cus-
tomer of a financial institution; 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.
‘‘(b) PROHIBITION ON RECEIVING CUSTOMER INFOR-
MATION
OBTAINED
FROM
FINANCIAL
INSTITUTION
UNDER FALSE PRETENSES.—It shall be a violation of this
title for any person to receive customer information of a
financial institution, knowing or having reason to know
that the information was obtained 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.
‘‘§ 1004. Administrative enforcement
‘‘(a) ENFORCEMENT BY FEDERAL TRADE COMMIS-
SION.—Except as provided in subsection (b), compliance
with this title shall be enforced under the Federal Trade
Commission Act by the Federal Trade Commission in the
same manner and with the same power and authority as
the Commission has under the title VIII, the Fair Debt
Collection Practices Act, to enforce compliance with such
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 insured State branches of foreign
banks, by the Board of Directors of the
Federal Deposit Insurance Corporation;
‘‘(iv) savings associations the deposits
of which are insured by the Federal De-
posit Insurance Corporation;
‘‘(B) the Federal Credit Union Act, by the
Administrator of the National Credit Union Ad-
ministration with respect to any Federal credit
union; and
‘‘(C) the Farm Credit Act of 1971, by the
Farm Credit Administration with respect to any
Federal land bank, Federal land bank associa-
tion, Federal intermediate credit bank, or pro-
duction credit association.
‘‘(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 willful or negligent
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 provide the Federal Trade Commission
with a copy of its complaint, except in any case
in which such prior notice is not feasible, in
which case the State shall serve such notice im-
mediately 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.
‘‘§ 1005. 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.
‘‘§ 1006. 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.
‘‘(c) DETERMINATION OF INCONSISTENCY.—
‘‘(1) IN GENERAL.—The Federal Trade Com-
mission shall, upon its own motion or upon the re-
quest of any State or other interested party, submit-
ted in accordance with procedures prescribed in reg-
ulations of the Commission, determine whether a
State requirement is inconsistent or affords greater
protection.
‘‘(2) EFFECT OF DETERMINATION.—If the Fed-
eral Trade Commission determines that a State re-
quirement is inconsistent, a person shall incur no li-
ability under the law of the State for a good faith
failure to comply with that law, notwithstanding that
such determination is subsequently amended, re-
scinded, or determined by judicial or other authority
to be invalid for any reason.’’.
(b) REPORT TO THE CONGRESS.—Before the end of
the 18-month period beginning on the date of the enact-
ment of this Act, the Comptroller General shall submit
to the Congress a report on the following:
(1) The efficacy and adequacy of the remedies
provided in the amendments made by subsection (a)
in addressing attempts to obtain financial informa-
tion by fraudulent means or by false pretenses.
(2) Any recommendations for additional legisla-
tive or regulatory action to address threats to the
privacy of financial information.
Æ