MAIN STREET FINANCE

                    The lives of loan consumers are increasingly like open books: vulnerable to sophisticated cyber-snoopers capable of discovering a great deal about how people save and spend. Yet even as the ability to gather financial data expands, federal laws limit what others are allowed to collect about a person’s financial history and what they can do with the information once they have it.

       Starting with the Consumer Credit Protection Act of 1968, Congress moved to shield consumers and their financial records from abuse. In the years following, other laws refined consumer rights, spelling out how government can access bank customers’ information, how banks treat borrowers and the way banks handle customer deposits.

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Right to Financial Privacy Act

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The federal Right to Financial Privacy Act limits government access to personal financial records. Congress passed the law, which protects the confidentiality of personal financial records, in response to the 1976 Supreme Court’s United States v. Miller ruling which found that the consumer bank account records aren’t subject to constitutional privacy protection.

The 1978 law extended Fourth Amendment privacy protection to such information.

Under the Financial Privacy Act, government officials normally must get written consent, or obtain a subpoena or search warrant in order to peruse your financial records. Before authorized searches can take place, investigators must serve notice on the account holder and wait 10 days for a response, or 14 days from the date a notification was mailed.

Importantly, the law only applies to the federal government and its officers, agents, agencies and departments. It doesn’t govern local or state governments, nor does it regulate the activities of private businesses.

The act identifies the sort of financial institutions it covers. Not only does it cover accounts held at traditional banks, but it pertains to records held by merchant credit-issuing entities. So department store and gas station credit card accounts fall under the act’s regulations.

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