Contact: Jim Harper

(202) 546-3701

http://www.privacilla.org

Washington, D.C. — Passage of California privacy legislation will be a loss for consumers, according to privacy think-tank Privacilla.org. The only winners will be anti-commercial activists and the wealthy CEO of a California dot-bomb.

Slated for signature by a desperate Governor Gray Davis, the California Financial Information Privacy Act would provide little in the way of privacy, replacing consumer choice with government dictates.

Passage of the law is almost entirely the product of political machinations by the head of a struggling dot-com company called E-Loan.com.

E-Loan.com and its CEO, Chris Larsen, funneled more than a million dollars into signature-gathering for his pet initiative. When it was clear that Larsen had purchased enough signatures to place the intiative on the California ballot, he cut a deal with large financial services providers allowing the law through the legislature. Desperate to please anyone, Governor Davis has indicated his support for the measure.

"Larsen evidently believes that he can buy consumer confidence in his business from the California political process," said Jim Harper, Editor of Privacilla.org. E-Loan's share price has dropped more than 93% from its swinging IPO highs. "It's another example of California public policy on the auction block, consumers be damned," Harper said.

Under the federal Gramm-Leach-Bliley law, all consumers have the power to prevent information-sharing among financial services companies. Few consumers have exercised this option because they recognize the benefits of participating in the information economy. They know that problems like identity fraud and spam are unrelated to legitimate financial information processing.

"Chris Larsen and California's politicians have decided that they know better than California consumers," said Harper. "Californians are getting meaningless 'privacy rights' but not real privacy on the terms they want it."

The new California law would prevent financial services providers from using accurate information about people to serve them more efficiently with the products and services they want. A controversial, last-minute amendment to the Gramm-Leach-Bliley law allowed states to regulate even more than federal law does. Because it has failed to deliver any consumer benefits, this provision may be repealed by Congress.

"The California legislation would make a French bureaucrat proud," Harper continued. "It replaces consumer choice with complex government regulations. It hurts consumers and workers by letting more blood out of a weak California economy. And it gives a free pass to wholesale information-sharing by government agencies. Californians will have fewer jobs, less money, and no greater privacy once this law passes."

Privacilla.org (http://www.privacilla.org) is an innovative Web site that captures "privacy" as a public policy issue. Privacilla has been described as a "privacy policy portal" and an "online think-tank."