Senate Adopts Privacy Measure

The Senate Thursday overwhelmingly adopted a measure aimed at protecting consumers' privacy by making it a federal crime for anyone to misrepresent himself to obtain someone's private financial data.

The vote was 95-2 for the amendment to sweeping legislation the Senate is considering that would let banks, securities firms and insurance companies get more deeply into each other's businesses.

The measure, proposed by Sen. Phil Gramm, R-Texas, chairman of the Senate Banking Committee, responded to Americans' growing concern over privacy in an era of consolidations creating huge financial institutions selling everything from checking accounts to mutual funds.

"Americans have become increasingly concerned about the issue" of privacy, said Sen. Paul Sarbanes of Maryland, the banking panel's senior Democrat.

The amendment takes aim at the practice of pretext calling, in which people call employees at banks and other businesses and use Social Security numbers to get information about bank accounts and other financial data.

Republican Sens. Connie Mack of Florida and Don Nickles of Oklahoma voted against the amendment. Sen. Peter Fitzgerald, R-Ill., voted present; he owns a large stake in the Bank of Montreal, which previously bought his family's Illinois bank.

The vote came a day after the Senate, in a setback for the Clinton administration, defeated an amendment that would have removed provisions in a financial services overhaul bill that Democrats saw as an attack on the 1977 Community Reinvestment Act. The vote was 52-45.

Gramm wants to exempt small rural banks from the community-lending law and make it harder for the government to use satisfactory community-lending ratings as a requirement for banks being allowed to expand.

The Senate on Wednesday also rejected, on a party-line 54-43 vote, a Democratic version of the financial services legislation, which would lift Depression-era barriers separating banks, securities firms and insurance companies.

The House, meanwhile, overwhelmingly passed legislation Wednesday that would make it harder for people to sweep away their debts in bankruptcy, despite the threat of a presidential veto.

House members, seeking to stem the rising tide of personal bankruptcies, gave the bipartisan bill a 313-108 veto-proof vote. The legislation, sought by credit card companies, got solid Republican support but split the Democrats. The Senate hasn't yet voted on a parallel measure.

The White House threatened a veto. The administration especially criticized the measure's creation of a "means test" based on debtors' income to determine whether they must gradually repay their debts or erase them entirely while under bankruptcy court protection from creditors.

In a statement, the White House called the means test "inflexible and arbitrary," while reaffirming its support in principle for rewriting the bankruptcy laws.

Before te House vote on the bankruptcy bill, Rep. Henry Hyde, R-Ill., the Judiciary Committee chairman, and Rep. John Conyers of Michigan, the panel's senior Democrat, tried to soften the means-test provision, which uses the Internal Revenue Service's living expense standards to help determine how much debtors can repay. But their effort was rebuffed in a 238-184 vote.

Big bank-owned credit card networks, notably Visa and MasterCard, and retail-business groups say their losses from debts forgiven in bankruptcy have forced them to raise interest rates for consumers who handle credit responsibly.

But consumer groups, unions, civil rights groups and bankruptcy attorneys maintain the legislation favors corporate profits over the needs of families struggling with debt who need a fresh start. They insist that the credit card companies share the blame by flooding consumers with mailed solicitations to entice them into easy credit.

By voice vote, the lawmakers adopted an amendment requiring credit card companies to clearly disclose their late-payment fees and how long it would take customers to pay off balances if they make only minimum monthly payments.

The companies also would have to clearly reveal the expiration dates of introductory "teaser rates" and the higher interest rates replacing them. The same disclosures would have to be made in offers for credit card accounts made over the Internet, which have attracted an estimated 7.8 million people in the last five years.