Ruling still protects information about individual borrowers
OLYMPIA – The Washington Supreme Court issued a decision today in which justices unanimously agreed with the Washington Attorney General’s Office that the financial privacy provisions of the federal Gramm-Leach-Bliley Act (GLBA) don’t preempt the state Public Records Act. The ruling also clarified that information about individual mortgage borrowers is still protected as intended under federal law due to exemptions set forth under state law.
“Today’s decision by the Washington Supreme Court is important because it helps state agencies to comply with public records laws by clarifying what information is protected under the federal law,” Attorney General Rob McKenna said.
The case, Ameriquest Mortgage Co. v. Wash. State Office of the Attorney General, arose from a multistate investigation into the lending practices of Ameriquest that resulted in a $325 million settlement in March 2006. In February 2007, the Attorney General’s Office received a request for all public records related to the Ameriquest investigation. A Seattle attorney who represents victims of predatory lending practices requested borrowers’ names, addresses and loan terms – but not Social Security numbers or account numbers.
The Attorney General’s Office had notified the attorney that it intended to comply with the request, when Ameriquest sought an injunction. The company wanted to block the disclosure of records it had provided to the Attorney General’s Office, including loan files, internal customer complaint files and employee e-mails.
The GLBA prohibits financial institutions from disclosing a consumer’s personal information to a nonaffiliated third party without the consumer’s prior consent. Exceptions include complying with investigations. The law also generally prohibits nonaffiliated third parties from disclosing personal information with other nonaffiliated parties.
A King County Superior Court judge denied Ameriquest’s motion, concluding that the GLBA doesn’t preempt the state’s law on public disclosure.
The Court of Appeals reversed the trial court’s decision, holding that, if compliance with the Public Records Act is inconsistent with the GLBA, then the GLBA preempts the Public Records Act on this point and prohibits disclosure.
The Supreme Court disagreed that the Public Records Act is preempted but affirmed on different grounds. The court found that the federal privacy laws apply to the disputed information in this case, and the federal exemptions from disclosure under the GLBA should be applied in responding to a request under the state Public Records Act.
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