NORTH DAKOTA VOTERS CHOOSE OPT‑IN FINANCIAL PRIVACY STANDARD
In the first state‑wide vote on financial privacy, North Dakota voters chose to repeal 2001 North Dakota Senate Bill 2191, which amended the disclosure of financial information provision of the state banking code. Effective July 1, 2001, Senate Bill 2191 (i) changed the definitions of “customer” and “customer information” to more closely parallel federal law and (ii) authorized disclosure of customer information by a financial institution (defined to include North Dakota banks, savings banks, trust companies, savings and loan associations and credit unions) to a non‑affiliated third party if the disclosure was in compliance with the federal Gramm‑Leach‑Bliley Act (“GLB Act”). Prior to 2001, North Dakota had a strict “opt‑in” privacy law that required consumer consent to share financial information with unaffiliated third parties. The 2001 amendment, therefore, permitted disclosures under the more lenient “opt‑out” approach of the GLB Act.
On June 11, 2002, however, pursuant to Article III, Section 1 of the state constitution, the people of North Dakota exercised their right to approve or reject legislative acts by referendum. Referred Measure No. 2 appeared on the ballot for the June 11 primary election, and a majority of voters chose “NO” to signify that they disagreed with the provisions of Senate Bill 2191 and wished to repeal the measure. A referred measure that is rejected is void immediately, so the rejection of Senate Bill 2191 voids the 2001 amendments. The North Dakota financial privacy law now reverts back to the pre‑2001 “opt‑in” version.
For more information regarding this Alertcontact the following attorneys with the Firm: Elizabeth Anstaett at 614-628-1604 and [email protected].