Fine Tuning Financial Privacy

This June, the Ninth Circuit, overturning a lower court ruling, held that the Fair Credit Reporting Act (FCRA) does preempt some part of the California Financial Information Privacy Act (aka SB1). The court held that the FCRA does, in fact, preempt state affiliate sharing laws insofar as a “consumer report” is concerned. Where affiliate sharing does not involved a “consumer report” as defined in the FCRA, state laws are not preempted. What this means if you do business in California: (a) SB1 opt-out will not apply when affiliates share consumer report information; (b) SB1 opt-out will apply when affiliates share information that isn’t a consumer report; and (c) SB1 “opt-in” relevant to disclosures of information to non-affiliates will continue to be applicable and enforceable.