ANNAPOLIS – A bill now in the Maryland Senate would allow the state’s Office of Financial Regulation to share data from financial institutions, including borrower information, with other federal and state agencies across the country in an effort to curb bad mortgage and lending practices.
But opponents are concerned about privacy and wonder whether the legislation is necessary.
The House of Delegates passed the bill in a 126-8 vote last week. After the first reading in the Senate Monday it was assigned to the Finance Committee.
If the bill becomes law the office of the commissioner of financial regulation would be able to distribute information from all the institutions it oversees, including credit unions, trust companies and mortgage lenders. The new bill is an expansion of the 2002 Money Transmission Act, which is limited to bank information.
Joseph Rooney, deputy commissioner of financial regulation, said information would not be passed on unless it were necessary for crime prevention, and then only to other financial regulators and law enforcement officials. Information would not be shared with the public, other companies or states that cannot send Maryland equivalent data.
The bill is meant to prevent financial crimes by sharing information about offenders as it becomes available, Rooney said, but that information could also be used to protect consumers from national mortgage companies in non-criminal circumstances.
For example, some national companies operate all their offices the same way, he said. If there were to be a mistake in the way an organization calculates interest that rate could be incorrect in every office.
“With the cooperation agreement, if one state finds the violation, they can stop it,” Rooney said. He said many states have a similar law in effect.
Opposition in the House came entirely from Republicans, who said they were not convinced of the necessity of allowing the office to disseminate residents’ personal information.
Delegate Warren Miller of Howard County, who cast one of the dissenting votes, said a presentation by Rooney at a House Economic Matters Committee hearing did not explain enough about the information to be shared to make him comfortable.
“When Delegate [Brian] Feldman [D-Montgomery] and myself tried to get to the heart of the matter – what data are we talking about – he didn’t answer our questions,” Miller said.
The deputy commissioner only told the committee the information included confidential data that he oversees in his work, Miller said. Without a clearer reason for making available information the state has deemed confidential, he said he would be uncomfortable doing so.
“He didn’t give us sufficient cause to vote for the bill,” Miller said.
Delegate James King, R-Anne Arundel, said he also opposed the bill because the deputy commissioner’s presentation was not compelling enough to win his vote.
King said committee members asked what information his office was looking for and why it was necessary, but Rooney did not sufficiently answer the questions.
“I’m hesitant to pass any legislation that deals with confidential information from Maryland residents,” he said.
King agreed that sharing financial information can be necessary to protect public safety, but said the hearing did not show a need that trumps privacy rights.
If passed, the law would take effect July 1.