LEGISLATIVE ROUNDUP: Congress prefers privacy

Jan 01, 2000 10:30 PM  By

Several privacy-related bills are passed before winter recess

Who says nothing ever gets done in Washington? Although the 106th Congress did leave several bills, notably H.R. 22, the Postal Modernization Act, on the table before the winter recess, it signed several privacy-related bills, including the Financial Modernization Act, into law. (Another privacy-related bill, the Department of Transportation Appropriations Bill, was passed in October; for details see List Watch in the December 1999 issue.)

“These bills are a wake-up call to catalogers and direct marketers that privacy will continue to be a big issue in 2000,” says Dick Barton, senior vice president of congressional relations at the Direct Marketing Association.

The Financial Modernization Act (H.R. 10; S. 900), introduced by Rep. James Leach (R-IA), passed in both houses of Congress on Nov. 4. The act contains privacy provisions that prevent financial institutions from sharing customer information with third-party marketers – unless the institution gives the customer the ability to opt out.

Several consumer groups and congressmen, including Sen. Richard Shelby (R-AL) and Rep. Edward Markey (D-MA), had formed an alliance to require an opt-in rather than an opt-out provision, along with other more stringent privacy provisions, but they were narrowly defeated. (With an opt-out policy, companies are free to share a consumer’s personal data unless the consumer requests otherwise. With an opt-in, marketers cannot share a consumer’s personal data until they obtain permission from the individual.)

Consumer protection bill

Meanwhile, the Deceptive Mail Prevention and Enforcement Act (S. 335), sponsored by Sen. Susan Collins (R-ME), and its House companion bill, the Honesty in Sweepstakes Act 1999 (H.R. 170), from Rep. Frank LoBiondo (R-NJ), were passed on Nov. 19 by both the House and the Senate. The bills call for new consumer protection standards, including tighter rules and disclaimers for sweepstakes promotions.

While few catalogers engage in sweepstake promotions, “all direct marketers, including catalogers, need to be aware of S. 335 because it [addresses] the rules and accuracy of outbound solicitations,” Barton says.

Pending federal legislation of interest to catalogers includes:

Postal Modernization Act of 1999 (H.R. 22)

Sponsor: Sen. John McHugh (R-NY)

Details: Grants the U.S. Postal Service greater freedom and flexibility to set postal rates and test new products. It also allows the USPS to create a separate, private, for-profit corporation to provide nonpostal products and services.

Status: Passed by the House Subcommittee on the Postal Service and referred to the House Committee on Crime; awaiting full committee action.

Postal Service Enhancement Act (H.R. 2535)

Sponsors: Rep. Henry Waxman (D-CA) and Rep. Chaka Fattah (D-PA)

Details: A Democratic alternative to H.R. 22, the bill calls for the creation of a commission to study the more controversial rate-setting and private-enterprise aspects of H.R. 22.

Status: Introduced into the House; awaiting action by the House Subcommittee on the Postal Service.

Internet Tax Elimination Act (H.R. 3252; S. 1611)

Sponsors: Rep. John Kasich (R-OH) and Sen. John McCain (R-AZ)

Details: To amend the Internet Tax Freedom Act of 1998 (H.R. 1054; S. 442), which was passed in October 1998 and established an advisory committee to make recommendations to Congress in April. The amendment would seek to broaden the scope of H.R. 1054 and make the moratorium permanent.

Status: H.R. 3252 sent to Judiciary Committee and the Ways and Means Committee; S. 1611 referred to the Committee on Commerce.