Subject: S7-6-00

Date:    03/20/2000 5:07 PM
     
     
     
Dear Mr. Katz:
     
This letter is in MS Word format. 
     
The following letter is in response to the request for comments regarding 
proposed amendment to Title 17, Chapter II of the Code of Federal Regulations by
the addition of Part 248 - Regulation S-P: Privacy of Consumer Financial 
Information. 
     
I work for a broker-dealer consulting firm and have contact with broker-dealers 
of varying sizes. 
     
It is my opinion that the stated goals of the Gramm-Leach-Bliley Act of 
protecting the privacy of consumer financial information would be given greater 
effect by the use of an "opt-in" election.  The use of an "opt out" election 
places greater demands on the financial institutions, broker-dealers, and 
consumers with a decrease in the potential protections to privacy that the G-L-B
Act sought to ensure.
     
The consumer making the affirmative act of "opting in" is more likely ensure a 
thoughtful and informed choice.  Under an "opt in" election method simple 
inaction or the failure of the consumer to correctly or timely respond according
to procedures set forth by the financial institution would result in a continued
safeguarding of the consumer's non-public information.  I believe that this 
methodology of erring on the side of protecting consumer privacy is more likely 
to effectuate the intent of the "G-L-B Act.
     
The "opt out" election also burdens the many financial institutions and 
broker-dealers who have no intent of sharing or disclosing their customers' 
financial information with establishing an "opt out" provision in their 
policies, paperwork, and procedures.  If an "opt in" election was adopted only 
those firms that wished to disclose, share, or sell their customers' non-public 
information would need to take the costly and time-consuming steps that would be
entailed.
     
The above steps would improve the proposed rule under two of the ways the 
Commission has used for analysis of the rule in the call-for-comments.  First, 
in Section IV. Cost-Benefit Analysis the Commission would find that the costs to
financial institutions and broker-dealers would be lowered and the effect would 
be increased protection of consumer privacy.  
     
Secondly, in Section V. Paperwork Reduction Act the Commission solicits comments
pursuant to 44 U.S.C. 3506(c)(2)(B).   
(1)     Evaluate whether the proposed collections of information are necessary 
for the proper performance of the functions of the Commission, including whether
the information will have a practical utility.    
     
The use of an "opt in" election would undoubtedly have more practical and 
realistic  utility in bringing meaning to the intent of increasing consumer 
privacy.
     
(4) Minimize the burden of the collections of information on those who are to 
respond, including through use of automated collection techniques or other forms
of information technology.
     
The use of an "opt in" election by only those financial institutions and 
broker-dealers wishing to disclose nonpublic consumer information would reduce 
the burden on all financial institutions and broker-dealers who do not wish to 
disclose customer information.  Furthermore, all customers opting for increased 
privacy would not have to take any affirmative steps to guarantee that privacy, 
which reduces the consumers' burden.
     
If the Commission decides never-the-less to go forward with an "opt out" 
election provision.  The minimum time for a financial institution to stop 
disclosing nonpublic information about a consumer after the receipt of the "opt 
out" notice should be as short as is practical.  I believe that a time two days 
after a firm's receipt of notice from the customer would be a reasonable time to
allows for both pragmatic considerations of the firm and still in keeping with 
the spirit of the G-L-B Act.
     
Thank you for your consideration.
     
Daniel Woodring