2000 Legislation
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HOUSE BILL NO. 596 – Financial information, release

HOUSE BILL NO. 596

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H0596................................by JUDICIARY, RULES AND ADMINISTRATION
FINANCIAL INFORMATION - Adds to and amends existing law to impose certain
obligations with respect to disclosure of personal financial information by
financial service providers; to require disclosure of financial service
provider privacy policies; to provide for rulemaking and enforcement; to
provide privacy protection for customer information of financial service
providers; to provide administrative enforcement; to provide certain
criminal penalties; and to provide applicability to persons subject to the
jurisdiction of the Department of Insurance.
                                                                        
02/16    House intro - 1st rdg - to printing
02/17    Rpt prt - to Jud

Bill Text


 H0596
                                                                        
                                                                        
  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-fifth Legislature                  Second Regular Session - 2000
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 596
                                                                        
                      BY JUDICIARY, RULES AND ADMINISTRATION COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO THE DISCLOSURE OF NONPUBLIC PERSONAL INFORMATION BY FINANCIAL SER-
  3        VICE PROVIDERS; STATING POLICY OF  THE  LEGISLATURE;  AMENDING  TITLE  26,
  4        IDAHO  CODE, BY THE ADDITION OF A NEW CHAPTER 37, TITLE 26, IDAHO CODE, TO
  5        IMPOSE CERTAIN OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL  FINAN-
  6        CIAL  INFORMATION BY FINANCIAL SERVICE PROVIDERS; TO REQUIRE DISCLOSURE OF
  7        FINANCIAL SERVICE PROVIDER PRIVACY POLICIES; TO PROVIDE FOR RULEMAKING; TO
  8        PROVIDE FOR ENFORCEMENT; TO ESTABLISH RELATIONSHIP TO OTHER LAWS; TO  PRO-
  9        VIDE  PRIVACY  PROTECTION  FOR  CUSTOMER  INFORMATION OF FINANCIAL SERVICE
 10        PROVIDERS; TO PROVIDE FOR ADMINISTRATIVE ENFORCEMENT; TO  PROVIDE  CERTAIN
 11        CRIMINAL  PENALTIES; TO PROVIDE DEFINITIONS; AND AMENDING CHAPTER 1, TITLE
 12        41, IDAHO CODE, BY THE ADDITION OF A NEW SECTION 41-121,  IDAHO  CODE,  TO
 13        PROVIDE  APPLICABILITY  TO  PERSONS  SUBJECT  TO  THE  JURISDICTION OF THE
 14        DEPARTMENT OF INSURANCE.
                                                                        
 15    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 16        SECTION 1.  LEGISLATIVE POLICY. It is the policy of the  Legislature  that
 17    each  financial  service provider has an affirmative and continuing obligation
 18    to respect the privacy of its customers and to protect the security and confi-
 19    dentiality of those customers' nonpublic personal information.
                                                                        
 20        SECTION 2.  That Title 26, Idaho Code, be, and the same is hereby  amended
 21    by  the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
 22    ter 37, Title 26, Idaho Code, and to read as follows:
                                                                        
 23                                      CHAPTER 37
 24                   FINANCIAL SERVICE PROVIDERS AND CUSTOMER PRIVACY
                                                                        
 25        26-3701.  OBLIGATIONS WITH RESPECT TO DISCLOSURES OF PERSONAL INFORMATION.
 26    (1) Notice requirements. Except as  otherwise  provided  in  this  chapter,  a
 27    financial  service  provider  may not, directly or through any affiliate, dis-
 28    close to a nonaffiliated  third  party  any  nonpublic  personal  information,
 29    unless the financial service provider provides or has provided to the consumer
 30    a notice that complies with section 26-3702, Idaho Code.
 31        (2)  Opt-out.
 32        (a)  A  financial  service  provider  may  not disclose nonpublic personal
 33        information to a nonaffiliated third party unless:
 34             (i)   The financial service provider clearly and  conspicuously  dis-
 35             closes  to  the  consumer,  in writing or in electronic form or other
 36             form permitted by any rules prescribed under section  26-3703,  Idaho
 37             Code, that the information may be disclosed to a third party;
 38             (ii)  The consumer is given the opportunity, before the time that the
 39             information  is  initially  disclosed, to direct that the information
 40             not be disclosed to a third party; and
 41             (iii) The consumer is given an explanation of how  the  consumer  can
                                                                        
                                           2
                                                                        
  1             exercise that nondisclosure option.
  2        (b)  Exception. This subsection shall not prevent a financial service pro-
  3        vider  from  providing  nonpublic  personal information to a nonaffiliated
  4        third party to perform services for or functions on behalf of  the  finan-
  5        cial  service  provider,  including  marketing  of  the  financial service
  6        provider's own products or services, or  financial  products  or  services
  7        offered  pursuant  to  joint  agreements between two (2) or more financial
  8        service providers that comply with the requirements imposed by  any  rules
  9        prescribed  under  section  26-3703,  Idaho Code, if the financial service
 10        provider fully discloses the providing of the information and enters  into
 11        a contractual agreement with the third party that requires the third party
 12        to maintain the confidentiality of the information.
 13        (3)  Limits  on reuse of information. Except as otherwise provided in this
 14    chapter, a nonaffiliated third party that receives from  a  financial  service
 15    provider nonpublic personal information under this section shall not, directly
 16    or  through  an affiliate of such receiving third party, disclose the informa-
 17    tion to any other party that is a nonaffiliated third party of both the finan-
 18    cial service provider and the receiving third  party,  unless  the  disclosure
 19    would  be  lawful  if  made directly to the other third party by the financial
 20    service provider.
 21        (4)  Limitations on the sharing of account number information for  market-
 22    ing purposes. A financial service provider shall not disclose, other than to a
 23    consumer  reporting agency, an account number or similar form of access number
 24    or access code for a credit card  account,  deposit  account,  or  transaction
 25    account   of   a  consumer  to  any  nonaffiliated  third  party  for  use  in
 26    telemarketing, direct mail marketing, or other  marketing  through  electronic
 27    mail to the consumer.
 28        (5)  General exceptions. Subsections (1) and (2) of this section shall not
 29    prohibit the disclosure of nonpublic personal information:
 30        (a)  As   necessary  to  effect,  administer,  or  enforce  a  transaction
 31        requested or authorized by the consumer, or  in connection with:
 32             (i)   Servicing  or  processing  a  financial  product   or   service
 33             requested or authorized by the consumer;
 34             (ii)  Maintaining or servicing the consumer's account with the finan-
 35             cial  service  provider,  or with another entity as part of a private
 36             label credit card program or other extension of credit on  behalf  of
 37             the entity; or
 38             (iii) A  proposed  or  actual  securitization,  secondary market sale
 39             (including sales of servicing rights), or similar transaction related
 40             to a transaction of the consumer.
 41        (b)  With the consent or at the direction of the consumer.
 42        (c)  (i)  To protect the confidentiality or security of the financial ser-
 43             vice provider's records pertaining to the consumer,  the  service  or
 44             product, or the transaction therein;
 45             (ii)  To  protect against or prevent actual or potential fraud, unau-
 46             thorized transactions, claims or other liability;
 47             (iii) For required institutional risk control, or for resolving  cus-
 48             tomer disputes or inquiries;
 49             (iv)  To  persons  holding a legal or beneficial interest relating to
 50             the consumer; or
 51             (v)   To persons acting in a fiduciary or representative capacity  on
 52             behalf of the consumer.
 53        (d)  To  provide  information  to  insurance  rate advisory organizations,
 54        guaranty funds or agencies, applicable rating agencies  of  the  financial
 55        service  provider,  persons  assessing  the  institution's compliance with
                                                                        
                                           3
                                                                        
  1        industry standards, and  the  institution's  attorneys,  accountants,  and
  2        auditors.
  3        (e)  To  the  extent specifically permitted or required under other provi-
  4        sions of law and in accordance with the federal right to financial privacy
  5        act of 1978, to law enforcement agencies (including a  federal  functional
  6        regulator,  the  United  States  secretary of the treasury with respect to
  7        subchapter II of chapter 53 of title 31, U.S.C., and chapter 2 of title  I
  8        of  Public  Law 91-508 (12 U.S.C. 1951-1959), a state insurance authority,
  9        or the federal trade commission), self-regulatory organizations, or for an
 10        investigation on a matter related to public safety.
 11        (f)  (i)  To a consumer reporting agency in accordance  with  the  federal
 12        fair credit reporting act; or
 13             (ii) From a consumer report reported by a consumer reporting agency.
 14        (g)  In  connection  with  a  proposed or actual sale, merger, transfer or
 15        exchange of all or a portion of a business or operating unit if  the  dis-
 16        closure  of  nonpublic  personal  information concerns solely consumers of
 17        such business or unit; or
 18        (h)  To comply with federal, state or local laws, rules and other applica-
 19        ble legal requirements; to comply with a properly authorized civil, crimi-
 20        nal or regulatory investigation, or subpoena or summons by federal,  state
 21        or local authorities; or to respond to judicial process or government reg-
 22        ulatory  authorities  having  jurisdiction over the financial service pro-
 23        vider for examination, compliance, or other purposes as authorized by law.
                                                                        
 24        26-3702.  DISCLOSURE  OF  INSTITUTION  PRIVACY   POLICY.   (1)  Disclosure
 25    required.  At the time of establishing a customer relationship with a consumer
 26    and not less than annually during the continuation  of  such  relationship,  a
 27    financial service provider shall provide a clear and conspicuous disclosure to
 28    the  consumer, in writing or in electronic form or other form permitted by any
 29    rules prescribed under section 26-3703, Idaho Code, of the  financial  service
 30    provider's policies and practices with respect to:
 31        (a)  Disclosing   nonpublic   personal   information   to  affiliates  and
 32        nonaffiliated third parties, consistent with section 26-3701, Idaho  Code,
 33        including the categories of information that may be disclosed;
 34        (b)  Disclosing  nonpublic personal information of persons who have ceased
 35        to be customers of the financial service provider; and
 36        (c)  Protecting the nonpublic personal information of consumers.
 37        The disclosures shall be made in  accordance  with  any  rules  prescribed
 38    under section 26-3703, Idaho Code.
 39        (2)  Information to be included. The disclosure required by subsection (1)
 40    of this section shall include:
 41        (a)  The  policies  and  practices of the institution with respect to dis-
 42        closing nonpublic personal information  to  nonaffiliated  third  parties,
 43        other  than  agents  of  the institution, consistent with section 26-3701,
 44        Idaho Code, and including:
 45             (i)   The categories of persons to whom the information is or may  be
 46             disclosed, other than the persons to whom the information may be pro-
 47             vided pursuant to section 26-3701(5); and
 48             (ii)  The  policies  and practices of the institution with respect to
 49             disclosing of nonpublic personal  information  of  persons  who  have
 50             ceased to be customers of the financial service provider.
 51        (b)  The  categories  of nonpublic personal information that are collected
 52        by the financial service provider;
 53        (c)  The policies that the institution maintains to protect the  confiden-
 54        tiality and security of nonpublic personal information; and
                                                                        
                                           4
                                                                        
  1        (d)  The disclosures required, if any, under section 603(d)(2)(A)(iii)  of
  2        the federal fair credit reporting act.
                                                                        
  3        26-3703.  RULEMAKING. (1)  Regulatory authority.
  4        (a)  Rulemaking.  The Idaho department of finance and the Idaho department
  5        of insurance may each prescribe, after consultation  as  appropriate  with
  6        representatives  of  the  banking,  credit  union,  thrift, securities and
  7        insurance industries, such rules as may be necessary to carry out the pur-
  8        poses of this chapter with respect to the financial service providers sub-
  9        ject to their jurisdiction under section 26-3704, Idaho Code.
 10        (b)  Coordination, consistency and comparability.  Each  of  the  agencies
 11        allowed  under  subsection (1)(a) of this section to prescribe rules shall
 12        consult and coordinate with  the  other  agency  described  in  subsection
 13        (1)(a)  of this section for the purposes of assuring, to the extent possi-
 14        ble, that the rules prescribed by each agency are consistent and  compara-
 15        ble  with  the  rules prescribed by the other agency, and with the regula-
 16        tions prescribed by the relevant federal regulatory  authorities  pursuant
 17        to federal privacy statutes.
 18        (2)  Authority  to grant exceptions. The rules prescribed under subsection
 19    (1) of this section may  include  additional  exceptions  to  subsections  (1)
 20    through  (4) of section 26-3701, Idaho Code, as are deemed consistent with the
 21    purposes of this chapter.
                                                                        
 22        26-3704.  ENFORCEMENT IN GENERAL -- JURISDICTION.  This  chapter  and  any
 23    rules  prescribed  hereunder  shall  be  enforced  by  the Idaho department of
 24    finance and the Idaho department of insurance with respect to  financial  ser-
 25    vice  providers  and  other  persons  subject to their respective jurisdiction
 26    under applicable law.
                                                                        
 27        26-3705.  RELATION TO OTHER LAWS AND CONTRACTS. (1) In general. This chap-
 28    ter shall not be construed as superseding, altering or affecting any  statute,
 29    rule,  order  or  interpretation in effect in this state, except to the extent
 30    that the statute, rule, order or interpretation is inconsistent with the  pro-
 31    visions of this chapter, and then only to the extent of the inconsistency.
 32        (2)  Greater protection under express contract.  This chapter shall not be
 33    construed  as  superseding, altering or affecting any express written contract
 34    between a financial service provider and its customer, except  to  the  extent
 35    that  the express written contract is inconsistent with the provisions of this
 36    chapter, and then only to the extent of the inconsistency.   For  purposes  of
 37    this subsection, an express written contract is not inconsistent with the pro-
 38    visions of this chapter if the protection the express written contract affords
 39    the customer is greater than the protection provided under this chapter.  This
 40    chapter  shall supersede any oral contract or implied contract or implied con-
 41    tractual term to the extent that the oral  contract  or  implied  contract  or
 42    implied contractual term is inconsistent with the provisions of this chapter.
                                                                        
 43        26-3706.  [RESERVED.]
                                                                        
 44        26-3707.  PRIVACY PROTECTION FOR CUSTOMER INFORMATION OF FINANCIAL SERVICE
 45    PROVIDERS.  (1)  Prohibition  on  obtaining customer information by false pre-
 46    tenses.  It shall be a violation of this chapter for any person to  obtain  or
 47    attempt  to  obtain,  or  cause to be disclosed or attempt to cause to be dis-
 48    closed to any person, customer information of  a  financial  service  provider
 49    relating to another person:
 50        (a)  By  making a false, fictitious or fraudulent statement or representa-
                                                                        
                                           5
                                                                        
  1        tion to an officer, employee, or agent of a financial service provider;
  2        (b)  By making a false, fictitious or fraudulent statement or  representa-
  3        tion to a customer of a financial service provider; or
  4        (c)  By  providing  any  document  to  an  officer, employee or agent of a
  5        financial service provider, knowing that the document is forged,  counter-
  6        feit, lost or stolen, was fraudulently obtained, or contains a false, fic-
  7        titious or fraudulent statement or representation.
  8        (2)  Prohibition  on  solicitation of a person to obtain customer informa-
  9    tion from financial service provider under false  pretenses.  It  shall  be  a
 10    violation  of  this chapter to request a person to obtain customer information
 11    of a financial service provider, knowing  that  the  person  will  obtain,  or
 12    attempt  to  obtain,  the  information  from  the  institution  in  any manner
 13    described in subsection (1) of this section.
 14        (3)  Nonapplicability to law enforcement agencies. No  provision  of  this
 15    section  shall  be  construed so as to prevent any action by a law enforcement
 16    agency, or any officer, employee, or agent of such agency, to obtain  customer
 17    information of a financial service provider in connection with the performance
 18    of the official duties of the agency.
 19        (4)  Nonapplicability to financial service providers in certain cases.  No
 20    provision  of  this  section shall be construed so as to prevent any financial
 21    service provider, or any officer, employee or agent  of  a  financial  service
 22    provider,  from  obtaining customer information of such financial service pro-
 23    vider in the course of:
 24        (a)  Testing the security procedures or systems of  such  institution  for
 25        maintaining the confidentiality of customer information;
 26        (b)  Investigating  allegations of misconduct or negligence on the part of
 27        any officer, employee or agent of the financial service provider; or
 28        (c)  Recovering customer information of  the  financial  service  provider
 29        which  was  obtained or received by another person in any manner described
 30        in subsection (1) or (2) of this section.
 31        (5)  Nonapplicability  to  insurance  institutions  for  investigation  of
 32    insurance fraud. No provision of this section shall be construed so as to pre-
 33    vent any insurance institution, or any  officer,  employee  or  agency  of  an
 34    insurance  institution,  from  obtaining  information  as part of an insurance
 35    investigation into criminal activity,  fraud,  material  misrepresentation  or
 36    material  nondisclosure  that  is  authorized for such institution under state
 37    law, rule, interpretation or order.
 38        (6)  Nonapplicability to certain types of customer information  of  finan-
 39    cial  service providers. No provision of this section shall be construed so as
 40    to prevent any person from obtaining customer information of a financial  ser-
 41    vice provider that otherwise is available as a public record filed pursuant to
 42    the  securities laws, as defined in section 3(a)(47) of the federal securities
 43    exchange act of 1934.
 44        (7)  Nonapplicability to collection of child support judgments.  No provi-
 45    sion of this section shall be construed to prevent any state-licensed  private
 46    investigator,  or any officer, employee or agent of such private investigator,
 47    from obtaining customer information of a financial service  provider,  to  the
 48    extent reasonably necessary to collect child support from a person adjudged to
 49    have  been  delinquent  in his or her obligations by a federal or state court,
 50    and to the extent that such action by a state-licensed private investigator is
 51    not unlawful under any other federal or state law or regulation, and has  been
 52    authorized by an order or judgment of a court of competent jurisdiction.
                                                                        
 53        26-3708.  ADMINISTRATIVE  ENFORCEMENT. (1) Enforcement by Idaho department
 54    of finance. Except as provided in subsection (2) of this  section,  compliance
                                                                        
                                           6
                                                                        
  1    with  sections  26-3707  through 26-3710, Idaho Code, shall be enforced by the
  2    Idaho department of finance.
  3        (2)  Enforcement by Idaho department of insurance.  Compliance  with  sec-
  4    tions 26-3707 through 26-3710, Idaho Code, by financial service providers pri-
  5    marily  regulated  in  this  state  by  the  department  of insurance shall be
  6    enforced by the department of insurance.
                                                                        
  7        26-3709.  CRIMINAL PENALTY. In general. Whoever knowingly  and  intention-
  8    ally  violates,  or  knowingly  and  intentionally attempts to violate section
  9    26-3707, Idaho Code, shall be guilty of a misdemeanor.
                                                                        
 10        26-3710.  DEFINITIONS. As used in sections 26-3701 through 26-3706,  Idaho
 11    Code:
 12        (1)  "Affiliate"  means any company that controls, is controlled by, or is
 13    under common control with another company.
 14        (2)  "Consumer"  means an individual who obtains, from a financial service
 15    provider, financial products or services which are to be  used  primarily  for
 16    personal,  family, or household purposes, and also means the legal representa-
 17    tive of such an individual.
 18        (3)  "Federal banking agency" has the same meaning as given in  section  3
 19    of the federal deposit insurance act.
 20        (4)  "Federal functional regulator" means:
 21        (a)  The board of governors of the federal reserve system;
 22        (b)  The office of the comptroller of the currency;
 23        (c)  The board of directors of the federal deposit insurance corporation;
 24        (d)  The director of the office of thrift supervision;
 25        (e)  The national credit union administration board; and
 26        (f)  The securities and exchange commission.
 27        (5)  "Financial service provider" means:
 28        (a)  In  general,  "financial  service provider" means any institution the
 29        business of which is engaging in financial activities as described in sec-
 30        tion 4(k) of the federal bank holding company act of 1956, as the same may
 31        hereafter be amended.
 32        (b)  Persons subject to commodity futures trading  commission  regulation.
 33        Notwithstanding paragraph (a) of this subsection, the term "financial ser-
 34        vice  provider"  does not include any person or entity with respect to any
 35        financial activity that is subject to the jurisdiction  of  the  commodity
 36        futures trading commission under the federal commodity exchange act.
 37        (c)  Farm  credit institutions. Notwithstanding paragraph (a) of this sub-
 38        section, "financial service provider" does not include the  federal  agri-
 39        cultural  mortgage corporation or any entity chartered and operating under
 40        the federal farm credit act of 1971.
 41        (d) Other secondary market institutions. Notwithstanding paragraph (a)  of
 42        this  subsection,  "financial  service provider" does not include institu-
 43        tions  chartered  by  congress  specifically  to  engage  in  transactions
 44        described in section 26-3701(5)(a)(iii),  Idaho  Code,  as  long  as  such
 45        institutions  do  not sell or transfer nonpublic personal information to a
 46        nonaffiliated third party.
 47        (6)  "Joint agreement" means a formal written contract pursuant  to  which
 48    two  (2) or more financial service providers jointly offer, endorse or sponsor
 49    a financial product or service, and as may be further  defined  in  any  rules
 50    prescribed under section 26-3703, Idaho Code.
 51        (7)  "Necessary to effect, administer or enforce" means:
 52        (a)  The  disclosure is required, or is a usual, appropriate or acceptable
 53        method, to carry out the transaction or the product or service business of
                                                                        
                                           7
                                                                        
  1        which the transaction is a part, and record or  service  or  maintain  the
  2        consumer's  account in the ordinary course of providing the financial ser-
  3        vice or financial product, or to administer or service benefits or  claims
  4        relating to the transaction or the product or service business of which it
  5        is a part, and includes:
  6             (i)   Providing the consumer or the consumer's agent or broker with a
  7             confirmation, statement or other record of the transaction, or infor-
  8             mation  on  the status or value of the financial service or financial
  9             product; and
 10             (ii)  The accrual or recognition of incentives or bonuses  associated
 11             with  the transaction that are provided by the financial service pro-
 12             vider or any other party;
 13        (b)  The disclosure is required, or is one of the  lawful  or  appropriate
 14        methods,  to  enforce  the  rights of the financial service provider or of
 15        other persons engaged in carrying out the financial transaction,  or  pro-
 16        viding the product or service;
 17        (c)  The  disclosure is required, or is a usual, appropriate or acceptable
 18        method, for insurance underwriting at the consumer's request or for  rein-
 19        surance purposes, or for any of the following purposes as they relate to a
 20        consumer's  insurance: account administration, reporting, investigating or
 21        preventing fraud or material misrepresentation,  processing  premium  pay-
 22        ments,  processing  insurance  claims,  administering  insurance  benefits
 23        (including utilization review activities), participating in research proj-
 24        ects,  or  as  otherwise  required or specifically permitted by federal or
 25        state law; or
 26        (d)  The disclosure is required, or is a usual, appropriate or  acceptable
 27        method, in connection with:
 28             (i)   The  authorization,  settlement, billing, processing, clearing,
 29             transferring, reconciling, or collection of amounts charged, debited,
 30             or otherwise paid using a debit, credit or other payment card, check,
 31             or account number, or by other payment means;
 32             (ii)  The transfer of receivables, accounts or interests therein; or
 33             (iii) The audit of debit, credit or other payment information.
 34        (8)  "Nonpublic personal information" means:
 35        (a) Personally identifiable financial information:
 36             (i)   Provided by a consumer to a financial service provider;
 37             (ii)  Resulting from any transaction with the consumer or any service
 38             performed for the consumer; or
 39             (iii) Otherwise obtained by the financial service provider.
 40        (b)  The term does not include publicly  available  information,  as  such
 41        term is defined by any rules prescribed under section 26-3703, Idaho Code.
 42        (c)  Notwithstanding paragraph (b) of this subsection, the term:
 43             (i)   Shall  include any list, description, or other grouping of con-
 44             sumers, and publicly available information pertaining to  them,  that
 45             is  derived  using any nonpublic personal information other than pub-
 46             licly available information; but
 47             (ii)  Shall not include any list, description or  other  grouping  of
 48             consumers,  and  publicly  available  information pertaining to them,
 49             that is derived without using any nonpublic personal information.
 50        (9)  "Nonaffiliated third party" means any entity that is not an affiliate
 51    of, or related by common ownership or affiliated by  corporate  control  with,
 52    the  financial service provider, but does not include a joint employee of such
 53    institution.
 54        (10) "Time of establishing a customer relationship" means, in the case  of
 55    a financial service provider engaged in extending credit directly to consumers
                                                                        
                                           8
                                                                        
  1    to finance purchases of goods or services, the time of establishing the credit
  2    relationship with the consumer.
  3        As used in sections 26-3707 through 26-3710, Idaho Code:
  4        (11) "Customer"  means,  with respect to a financial service provider, any
  5    person, or authorized representative of a person, to whom the  financial  ser-
  6    vice  provider  provides  a  product or service, including that of acting as a
  7    fiduciary.
  8        (12) "Customer information of a  financial  service  provider"  means  any
  9    information maintained by or for a financial service provider which is derived
 10    from the relationship between the financial service provider and a customer of
 11    the financial service provider and is identified with the customer.
 12        (13) "Document" means any information in any form.
 13        (14) "Financial service provider" means:
 14        (a)  Any  institution  engaged in the business of providing financial ser-
 15        vices to customers who maintain a credit, deposit, trust, or other  finan-
 16        cial account or relationship with the institution;
 17        (b)  Any depository institution, as defined in section 19(b)(1)(A)  of the
 18        federal  reserve  act,  any  broker  or  dealer, any investment adviser or
 19        investment company, any insurance company, any loan  or  finance  company,
 20        any  credit  card issuer or operator of a credit card system, and any con-
 21        sumer reporting agency that compiles and maintains files on consumers on a
 22        nationwide basis, as defined in section 603(p)  of  the  federal  consumer
 23        credit protection act;
 24        (c)  For purposes of paragraph (b) of this subsection:
 25             (i)   The terms "broker" and "dealer" have the same meanings as given
 26             in section 3 of the securities exchange act of 1934 (15 U.S.C. 78c);
 27             (ii)  The  term "investment adviser" has the same meaning as given in
 28             section 202(a)(11)  of the investment advisers act of 1940 (15 U.S.C.
 29             80b-2(a)); and
 30             (iii) The term "investment company" has the same meaning as given  in
 31             section 3 of the investment company act of 1940 (15 U.S.C. 80a-3).
 32        (d)  Exclusions.  "Financial service provider" does not include any person
 33        or entity with respect to any financial activity that is  subject  to  the
 34        jurisdiction of the commodity futures trading commission under the federal
 35        commodity exchange act and does not include the federal agricultural mort-
 36        gage  corporation  or any entity chartered and operating under the federal
 37        farm credit act of 1971.
                                                                        
 38        SECTION 3.  That Chapter 1, Title 41, Idaho Code,  be,  and  the  same  is
 39    hereby  amended by the addition thereto of a NEW SECTION, to be known and des-
 40    ignated as Section 41-121, Idaho Code, and to read as follows:
                                                                        
 41        41-121.  APPLICABILITY OF FINANCIAL SERVICE PROVIDER  PRIVACY  PROVISIONS.
 42    Persons  subject to the jurisdiction of the department under this act are sub-
 43    ject to all of the provisions of chapter 37, title  26,  Idaho  Code,  to  the
 44    extent  such  provisions  are  applicable  to  such persons according to their
 45    terms.

Statement of Purpose / Fiscal Impact


                 STATEMENT OF PURPOSE
                       RS 10024

The purpose of this legislation is to allow Idaho citizens to 
protect their private financial information. Financial privacy 
is a concern of anyone doing business in today's high tech economy.
Under this bill, a customer may instruct his or her bank, credit 
union, insurance company and securities firm to maintain the privacy
of his or her personal financial information.   The financial 
service provider must follow the customer's instruction.

This law would be enforced by the Department of Finance and the 
Department of Insurance for the institutions they regulate.

                      FISCAL NOTE

Congress in 1999 enacted a comprehensive financial privacy law as a 
part of the  recent Gramm-Leach-Bliley Financial Modernization Act. 
This bill is designed  to allow the state of Idaho to enforce the 
same privacy protection under Idaho law as is provided under the 
federal law. it is unlikely that either the Department of Finance 
or the Department of Insurance would be required to add any staff 
in  order to carry out enforcement responsibilities under this 
legislation. 

It is possible that regulations might be promulgated in the future. 
Except for that possibility, this bill would have no fiscal impact 
on the general fund or local government.

CONTACT: Patrick V. Collins
(208) 344 - 6000

STATEMENT OF PURPOSE/ FISCAL NOTE                         H 596