State Bank-Data Law Voided by U.S. Judge
SACRAMENTO — A federal judge struck down Tuesday a California law restricting banks from selling private information on customers to their affiliates, ruling that the state law was preempted by federal rules.
The American Bankers Assn., the Financial Services Roundtable and Consumer Bankers Assn. had sued, arguing that the federal Fair Credit Reporting Act already regulated their ability to sell such information to affiliates in other lines of business.
The federal act lets banks and other financial institutions share information with affiliates about customers’ “credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.â€
The state law forced companies to offer consumers the right to opt-out of sharing such information.
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