If FCRA is reauthorized as it currently exists, the California restrictions, as well as any other state laws that vary from FCRA, would be preempted.

However, there are concerns that because of the parliamentary rules in the Senate, it may be possible for the state's senators to delay consideration of FCRA reauthorization unless the new California law, S.B. 1, is granted an exemption.

Allen Caskie, chief counsel with the American Council of Life Insurers, noted that since the life insurance industry is state regulated, it is well aware of the problems that arise from a lack of uniformity. Many policymakers, he said, acknowledge that if they were starting from scratch, they would never establish state-by-state regulation.

However, Mr. Caskie said, because the system is already in place, it is difficult to dismantle. That problem does not exist right now with privacy, he said. The concerns over privacy are relatively new and the country has the chance to develop a uniform system that works for everyone. But now, Mr. Caskie said, California is trying to go the other way.

FCRA addresses the issue of information sharing among affiliates. By contrast, the Gramm-Leach-Bliley Act addresses the issue of information sharing among non-affiliates.

Another major difference between FCRA and GLB is that FCRA preempts inconsistent state laws, while GLB allows states to enact privacy laws that are more restrictive than those in GLB.

The California law would require insurance companies and other financial institutions to allow customers to opt out of information sharing among affiliates, a standard which is far more restrictive than that in FCRA.

If FCRA is reauthorized as is, that provision in the California law would be preempted.

But since the parliamentary rules in the Senate allow any one member to slow down or even stop any legislation, the fear is that one or both of California's senators, Dianne Feinstein and Barbara Boxer, both Democrats, will delay FCRA reauthorization unless the new California law is saved from preemption. Mr. Caskie said that the primary concern is that the resulting system would be non-uniform when consumers are much better served by uniformity.

FCRA is scheduled to expire at the end of this year. Financial services groups say that unless FCRA is reauthorized with all its current preemptions intact, it will be much more difficult to provide credit to consumers.