Summary
Case note on the litigation over California’s Financial Information Privacy Act (SB1), which aimed to give residents stronger financial privacy protection than federal law. The American Bankers Association challenged the Act’s affiliate-sharing provisions as preempted by federal law, in particular the Fair Credit Reporting Act. The Ninth Circuit held that they were preempted only for information covered by that Act, such as creditworthiness data. The district court then found that financial institutions could not reliably separate that information in advance from other data, and that saving any part of the provisions would mean rewriting the law. It therefore granted declaratory relief and a permanent injunction barring California officials from enforcing the affiliate-sharing provisions.
Reference
H. Haouideg, "California's Financial Information Privacy Act Preempted by Federal Law", C.I.S. Packet, Stanford Center for Internet and Society, 2005, vol. 3, no. 2.