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USTP Press Release
For Immediate Release
July 26, 2000
JUSTICE, TREASURY, OFFICE OF MANAGEMENT AND BUDGET
SEEK PUBLIC COMMENT FOR STUDY ON
FINANCIAL PRIVACY AND BANKRUPTCY
WASHINGTON --
The Clinton-Gore Administration is seeking public comment
on privacy protection and the treatment of sensitive financial
information such as social security numbers, credit card
and bank account numbers in bankruptcy cases. In April,
the President announced the Clinton-Gore Plan to enhance
consumers' financial privacy, including a study
of privacy needs of debtors in bankruptcy. As part of the
plan, three federal agencies are now asking the public for
input on how to protect privacy in bankruptcy cases, particularly
in the information age.
The study
is being conducted by the Department of Justice, the Department
of Treasury, and the Office of Management and Budget. It will
examine how the privacy interests of debtors in personal bankruptcy
cases are affected by the public availability of information
they submit as part of the bankruptcy process. The study
also will examine the need for public access to information
filed in bankruptcy cases. In both the privacy and open access
areas, the study
will focus on the impact of changes in business practices
and in technology.
The agencies'
request for public comment will appear in the Federal Register
shortly and also will be posted on the Justice Department
web site at www.usdoj.gov/ust.
The agencies are
aware of public attention in recent weeks on the troubling
practice of organizations in bankruptcy seeking to sell personal
data regarding their former customers, in violation of such
organizations' privacy policies. In part because of pending
regulatory enforcement actions and pending legislation, the
agencies are not making this issue part of their formal study.
Nevertheless, the agencies invite comments about the effect
that a business bankruptcy filing has on consumer/customer
information collected by the business. Comments should not
address pending legislative proposals or regulatory activities.
After reviewing the comments and any other developments, the
agencies will determine whether it is appropriate to examine
this issue in greater depth.
* * *
A
person who files for bankruptcy provides detailed financial
information [see sample
bankruptcy petition in Portable Document Format] as
part of the schedules filed with the bankruptcy court. This
includes a list of bank accounts and identifying numbers,
credit card account numbers, social security numbers, balances
in bank accounts, balances owed to creditors, income, a detailed
listing of assets, and a budget showing the individual's regular
expenses. By statute, all documents filed with the court are
open to any member of the public.
In the past, access
to public court record data has as a practical matter been
quite limited. The people who obtained individual case files
from the courts were those willing to spend considerable time,
effort, and sometimes money. The development of electronic
databases and other technologies, however, raises the potential
that anyone can access sensitive data found in other people's
bankruptcy files, right from their own home. Aggregation and
electronic distribution of bankruptcy data could lower costs,
but it also could make information easily available to neighbors,
employers, marketers and predators looking for those most
likely to be lured by scams.
Bankruptcy trustees,
the people responsible for administering bankruptcy cases,
have access to the public record information, and often receive
other sensitive data about debtors. For example, some trustees
will get debtors' tax returns, an account of their routine
living expenses, and their payment schedules to creditors
-- all of which may be necessary to administer bankruptcy
cases. Trustees most often provide this information to creditors,
attorneys, and other entities with a direct and legitimate
interest in the case. However, there are no well-defined limits
on the trustee's authority to provide this information to
others, nor on the authority of such third parties to use,
sell, or transfer this information. In addition, some trustees
and creditors are considering compiling information contained
in bankruptcy records electronically for easier administration
of bankruptcy cases in which they have a claim.
The DOJ / Treasury
/ OMB study
will focus on the privacy and open access issues in both the
public record data and also the data held by trustees administering
bankruptcy cases.
Deadline
for Submissions
The notice directs
submissions to be sent in writing or in electronic form to:
Leander Barnhill, Office of General Counsel, Executive Office
for United States Trustees, 901 E Street, NW, Suite 780, Washington
DC 20530. Electronic submissions should be sent by email to
USTPrivacyStudy@usdoj.gov.
The Executive
Office for United States Trustees is a component of the Justice
Department that monitors the administration of bankruptcy
cases nationwide.
Public Information Officer
Executive Office for United States Trustees
(202) 305-7411
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