Aug 222010
 
 August 22, 2010  Featured News, Laws

The World Privacy Forum and other privacy organizations have cautioned the Securities and Exchange Commission that its  proposed rule on asset-backed securities

is a direct and substantial threat to the privacy of every individual who obtains a mortgage. If adopted, the proposal would be an unprecedented release of individual-level financial data and would greatly increase borrowers’ risk for identity theft and other problems related to the public release of detailed financial information.

In a joint letter filed August 2, the World Privacy Forum, the Center for Digital Democracy, Consumer Action, the Center for Financial Privacy and Human Rights, Privacy Rights Clearinghouse, and Privacy Activism  argue that the proposed rule would:

  • Expand the risk of identity theft for every borrower whose information would be disclosed because of the rule;
  • Place on the public record and online the largest amount of personal financial information about borrowers ever disclosed, including information never before made public;
  • Circumvent or undermine privacy protections in other laws, including the Fair Credit Reporting Act, Health Insurance Portability and Accountability Act, and the Privacy Act of 1974;
  • Weaken the utility and security of knowledge-based authentication techniques and activities by exposing details of mortgages to more people throughout the world and would undermine NIST electronic authentication recommendations;
  • Undermine the financial stability of households;
  • Threaten the stability of the asset-backed instruments that the proposed rule seeks to protect by placing all borrowers at greater risk to be victims of criminal activity and thereby lowering the value of the asset-backed instruments.

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