Tough Privacy Law Enacted in CA

With the grudging support of the financial community, the nation's toughest financial privacy bill became law in California on Aug. 27.The law requires businesses to receive a consumer's permission before sharing his or her nonpublic financial information with other companies, whereas federal law allows companies to do so as long as the customer has not requested otherwise. Financial industry interests got on board only after it became apparent that supporting the law was the best way to thwart an even tougher bill that was gaining steam through a voter initiative. The new law poses no threat to the fundamental health of the state's mortgage industry, said Melissa Richards, general counsel of the California Association of Mortgage Bankers. However, she added that it will affect the way some businesses market to their customers.