Privacy Issues Are Called Likely to Gain Prominence
February 28, 2000
MIAMI - Regulators will soon be keeping careful watch on mutual fund companies' privacy policies in light of the recently-passed Financial Modernization Act and ensuing mergers and acquisitions, said Paul M. Connolly, first vice president and chief executive officer of Federal Reserve Bank of Boston.
Connolly spoke at the National Investment Company Service Association's operations conference here last week.
Privacy is on the "radar screen" of the Federal Reserve and state attorney generals, Connolly said.
"The repeal of Glass-Steagall has put it there," he said. "It will affect as simple a thing as sharing a list of customers."
In addition, the new deregulated financial services environment leaves the door open to more state regulations, Connolly said. Under the federal law, states are free to adopt their own, stricter privacy laws, he said.
"One of the reasons for mergers is cross-selling, and this goes right to the heart of the privacy issue," he said.