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 TIME on politics Congressional Quarterly CNN/AllPolitics CNN/AllPolitics - Storypage, with TIME and Congressional Quarterly

California governor orders agency not to sell confidential wage information

Information 'would violate trust'

June 5, 1999
Web posted at: 5:18 a.m. EDT (0918 GMT)

LOS ANGELES (AllPolitics, June 5) -- California Gov. Gray Davis has ordered a state agency not to sell any confidential personal income information on Californians to private lenders, saying the state "has a responsibility to protect the privacy" of its citizens.

A little known law passed last September by the state legislature would allow private corporations to purchase salary information maintained on about 14 million residents from the Employment Development Department.

Davis instructed the agency to take no action regarding the law's implementation and instructed the EDD to initiate a full review of when, if at all, such sales should be permitted.

Privacy groups object to law

"I believe a State agency entrusted with confidential personal information on millions of its citizens ... has a responsibility to protect the privacy of those citizens," Davis wrote in a letter to EDD Director Michael Bernick.

"The wholesale distribution of such information on the open market, in my view, would violate that trust and the privacy of those individuals."

The governor called on Assembly Speaker Antonio Villaraigosa and Senate President Pro Tem John Burton to reconsider the legislature's approval of the law, AB 604.

At least two members of the California legislature said they would seek to repeal the law. In the interim, the state has no immediate plans to start selling the information.

The law was designed to allow mortgage lenders and other creditors to process loan applications faster and cheaper by getting an applicant's income information directly from the state, with the applicant's written permission.

Through the sale of the salary information, the state could earn an estimated $10 million to $15 million over the next 10 years.

A number of privacy groups objected to the plan -- and the Democratic governor agreed.

"I am hereby directing the Department of Employment to take no action in implementing any sale of confidential wage information," Gray wrote.


Employment Development Department


Saturday, June 5, 1999

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