Here it is... I expect as much from BoA (what a POS bank that is) and I'm disappointed that Wells is part of it also.
Bank Giants Fight Privacy Laws in Court Fri May 30,10:32 PM ET By MICHAEL LIEDTKE, AP Business Writer
OAKLAND, Calif. - Bank of America and Wells Fargo Bank teamed up Friday to urge a federal judge to block cities and counties from enforcing new laws that would prevent the banks from sharing information about their customers' finances without prior approval.
Attorneys for the banking giants told U.S. District Judge Claudia Wilken that local governments have no right to stop them from passing along customer intelligence to their affiliates or third parties.
Federal laws authorize the practice, and those regulations take precedence over the actions of state and local governments, said E. Edward Bruce, a Washington D.C. attorney for Bank of America and Wells Fargo.
But a growing number of local politicians say the federal laws don't go far enough to protect consumer privacy, prompting a recent movement to place more restrictions on the banks.
Imposing the will of state and local governments upon federally chartered banks has proven difficult.
Earlier this week, the U.S. Supreme Court (news - web sites) rebuffed two California cities — San Francisco and Santa Monica — in their attempt to ban surcharges on automated teller machines. And earlier this month, a federal judge ruled that federal laws regulating the finance charges on bank mortgages supersede the state rules.
The recent uprising among local governments around the state has prompted Bank of America and Wells Fargo — fierce competitors for nearly a century — to join forces to try to squelch the crusade in court.
Friday's hearing in Oakland federal court centered on consumer privacy laws approved last year by Contra Costa County, San Mateo County and Daly City.
The laws, scheduled to take effect Sept. 1, would block banks from sharing information without getting prior customer approval. Under federal laws, customers have to ask to keep their information private — a process known as "opting out."
It's a step that most consumers don't take and that's one reason the banks don't want their ability to share customer information tied to prior approval — a process known as "opting in."
"Most individuals will not take the time to opt-in to information sharing ... even though they might otherwise benefit from such sharing," bank attorneys wrote in a legal brief.
The case heard Friday is likely to affect similar laws recently passed in Alameda County, San Francisco and Santa Cruz County.
Wilken spent more than an hour listening to the arguments from both the banks and local governments before taking the matter under submission.
Pressed by Wilken, an attorney for San Mateo County acknowledged the weaknesses in the local consumer privacy laws.
"Looking back at it, perhaps the ordinances could have been written tighter," said Michael P. Murphy, chief deputy county counsel for San Mateo. "It is very clear that the (the counties and cities) intended to obtain as much privacy protection as they could for consumers."
The banks say they need to be able to share customer information among their various divisions so they have a better chance to sell other products, such as insurance, mortgage and credit cards.
Armed with information about how much money is in their customer accounts, the banks "have got a real leg up in marketing," bank attorney Bruce said.
Wilken wondered why the banks couldn't find other ways to sell products besides direct mail and telemarketing. The banks, for instance, could buy more advertising or hire salespeople to approach customers on the streets.
Taking those kinds of steps would be unfair, Bruce said, because the banks set up their businesses based on the powers granted to them by federal laws, including the National Bank Act.
If the banks couldn't share information with their affiliates, it might even prevent them from serving a California customer visiting a branch in Texas or some other state, Bruce warned. The banks also have suggested they might close branches in areas that enforce tougher consumer protection laws. ___
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