Friday, July 16, 1999
Many Banks Giving State Extensive Customer Data
Privacy: Law demands records of 'deadbeat parents,' but small firms hand over information on all account holders.
By EDMUND SANDERS, Times Staff Writer
Scores of California banks, thrifts, credit unions and life insurers have begun turning over confidential information about their customers--including account balances and Social Security numbers--to state officials in an effort to comply with a new federal law designed to catch parents who fail to pay child support.
The program, which took effect this spring, requires financial institutions nationwide to help locate so-called deadbeat parents by searching their customer databases every three months for matches against state-provided lists of child-support debtors. If matches are found, the names, account balances and other information must be given to state officials, who can then seize the assets.
But in California, many small community banks and credit unions say they cannot afford the time or the technology necessary to check millions of customer records regularly, and unlike some other states, California is not helping financial institutions shoulder the costs. As a result, about half of the participating institutions are taking advantage of a provision that enables them to simply hand over the names and account balances of all their customers, forcing the state to look for matches itself. (cont)
latimes.com
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