His statements were the first official industry reaction to a ruling from U.S. District Court in Sacramento that found the Federal Fair Credit Reporting Act does not preempt California's "affiliate sharing" restrictions on customer data.

The strictures are contained in California State Senate Bill 1, which requires insurance companies to give California consumers notice and an opportunity to "opt-out" of financial information disclosures between affiliates for marketing purposes. The decision does not impact affiliate information sharing for other purposes, which are excepted from the SB 1 "opt-out" standard.

Mr. Bartlett, whose group represents companies in all sectors of the financial services industry, said that if sustained, the ruling sets the stage for giving the states the authority to establish patchwork financial standards.

He said this would be "contrary to the clear intent of Congress for national, uniform standards for cross-marketing of financial products by financial services companies."

Congress thought it was doing that last year when it amended the Fair Credit Reporting Act. But the judge in American Bankers Association vs. Lockyer said the ruling did not bar language in the Financial Services Modernization Act (Gramm-Leach-Bliley) that gives states authority to enact tougher privacy standards.

A staff official of the Financial Services Roundtable said the current plan is to seek an expedited appeal of the ruling before the 9^th Circuit U.S. Court of Appeals.

In his testimony before the Senate panel on the status of financial services companies five years after the enactment of Gramm-Leach-Bliley, Mr. Bartlett also noted that federal regulators recently requested comment on alternatives to existing privacy notices that are more readable and useful to consumers.

"To avoid ... consumer confusion and regulatory conflict," Mr. Bartlett said, "the privacy standards in GLBA should be national, uniform standards. Also, the federal regulators should be directed to promulgate a simplified, national privacy notice with a safe harbor."