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Bank of America Privacy Policy Unique Among Bankers, McColl Says

Bank of America Privacy Policy Unique Among Bankers, McColl Says

Published 05-02-00

Submitted by Bank of America Corporation

Bank of America remains the only large U.S. bank that will not share, sell or otherwise disclose information about its customers to third party organizations for marketing their products or services, Chairman and Chief Executive Officer Hugh L. McColl, Jr., said today.

"This is very important, because it leaves us completely unconcerned about privacy legislation that would regulate such sharing or selling of information," McColl said. "Opt-in, opt-out, restrict it or prohibit it, we simply don't care, because we don't do it anyway."

McColl outlined the Bank of America customer privacy policy at a speech to the Society of American Business Editors and Writers in Atlanta.

The company also has a strict policy that respects its customers' direct marketing preferences. "Any customer can tell us anytime, through any channel, once, how they would like to receive marketing materials -- through the mail, by phone, by email or not at all -- and all areas of the company will abide by that request."

The third part of the company's practice is that Bank of America does not share health-related information collected for insurance sales with any other part of the company.

"The potential for insurance agents to share medical information with loan officers has caused a flurry of political hand-wringing, but the fact is that we don't do it now and never have," McColl said. He said that when the company revises its privacy policy this fall to comply with the Financial Modernization bill recently passed by Congress, the company will make it official.

McColl also said that it is critical to the financial services industry that the company preserves the ability to freely share customer information inside the company and across business lines, so-called "affiliate sharing."

"There is only one way we can know our customers and function as one company -- and that is by managing information across the company," he said. "If we are prevented from sharing information internally, customers are the ones who will lose."

Many consumer organizations propose that bank customers would have to actively tell their bank or financial institution if they want the bank to freely manage information about them before the bank could do so. If bank customers decide not to do this, the customer would have to interact with each department or business as if each were a separate company.

However, this idea doesn't work, according to McColl. "When several European countries tried an 'opt-in' program, banks spent millions on campaigns to educate the public about their choices and encourage participation. The response rate -- yea or nay -- was in the neighborhood of 60 percent. Just ask the Census Bureau how hard it is to get people to respond to a mailing."

New privacy laws have been proposed in several states, but McColl said he hopes new federal regulations scheduled to go into effect later this year will be given a chance to work before individual state laws are passed.

"The Financial Modernization Act of 1999 includes several privacy measures which will go into effect nationwide later this year -- privacy provisions that were added to the bill that went far beyond any existing protections," McColl said. "It is our great hope that legislators and regulators around the country -- at the state and federal levels -- will exercise prudence and restraint until we have had a chance to gauge how well these new rules work."

McColl said Bank of America is spending billions of dollars to build computer systems and processes for its customers, and that the company has no hidden motive or agenda on matters of customer privacy.

"In matters of customer information or privacy, we ask two questions: 'Would I be comfortable if my personal information was handled in the way I am proposing we handle our customers' information?' and, 'Are we proposing anything we would be uncomfortable telling our customers about?'

"In all cases, the answer to the first question must be 'yes,' and to the second question, 'no.'"

Bank of America, with $656 billion in assets, is the largest bank in the United States. It has full-service operations in 21 states and the District of Columbia and provides financial products and services to 30 million households and two million businesses, as well as providing international corporate financial services for business transactions in 190 countries. The company's stock is listed on the New York, Pacific and London stock exchanges and certain shares are listed on the Tokyo Stock Exchange.

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