Study of Financial Privacy and Bankruptcy

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Study of Financial Privacy and=20 Bankruptcy

January = 2001

FINANCIAL PRIVACY = IN=20 BANKRUPTCY:
A Case Study on Privacy In Public and Judicial=20 Records

Table of Contents=20
=20 EXECUTIVE=20 SUMMARY

1.=20 INTRODUCTION: = BANKRUPTCY DATA IN=20 CONTEXT
..................................................................= ...............................................1

(a) Clinton = Administration=20 Initiatives to Protect Financial=20 = Privacy
..............................................................= ...................................................1

(b) Privacy in Public = and=20 Judicial=20 = Records
..............................................................= ...................................................2

(c) Privacy and = Corporate=20 = Bankruptcy
...........................................................= ......................................................3

(d) Outline of the=20 = Report
...............................................................= ..................................................4

(e) Limitations of = the=20 = Study
................................................................= .................................................4

2.=20 BANKRUPTCY LAW = AND PERSONAL=20 INFORMATION IN BANKRUPTCY
.......................................................= ..........................................................=20 5

(a) Overview of the = Consumer=20 Bankruptcy=20 = Process
..............................................................= ...................................................5

(b) Personal = Information=20 Collected from the=20 = Debtor
...............................................................= ..................................................8

(c) Access to the = Debtor's=20 Personal Information.. 9(d) Limits on Access to the Debtor's = Personal=20 = Information
..........................................................= .......................................................10

(e) Judicial Branch = Policy on=20 General Public Access to Case=20 = Files
................................................................= .................................................11

(f) National Data = Center Policy=20 on Access to Case=20 = Files
................................................................= .................................................12

(g) Financial Privacy = Statutes=20 That May Apply in Bankruptcy Proceedings 13 (i) The Fair = Credit=20 Reporting=20 = Act
..................................................................= ...............................................13

(ii) = Gramm-Leach-Bliley=20 = Act
..................................................................= ...............................................13

3.=20 THE NEED FOR = GENERAL PUBLIC=20 ACCESS TO FINANCIAL
INFORMATION IN=20 BANKRUPTCY
..................................................................= ...............................................16=

(a) Facilitating the = Fair and=20 Efficient Disposition of Bankruptcy=20 = Cases
................................................................= .................................................16

(b) Promoting Public = Trust and=20 Accountability in the Bankruptcy=20 = System
...............................................................= ..................................................17

4.=20 PRIVACY INTERESTS = IN=20 FINANCIAL INFORMATION IN BANKRUPTCY
....= .........................................................................= ....................................17

(a) Privacy Interests = in=20 Financial=20 = Information
..........................................................= .......................................................17

(b) Special Privacy = Interests=20 of Debtors in=20 = Bankruptcy
...........................................................= ......................................................19

5.=20 MODELS FOR = BALANCING=20 PRIVACY AND ACCESS
....................................................= .............................................................20

(a) Introduction - = Case-By-Case=20 = Determinations
.......................................................= ..........................................................20

(b) Rules Based=20 = Models
...............................................................= ..................................................21

(c) Fair Information=20 = Principles
...........................................................= ......................................................24
(d) Hybrid=20 = Models
...............................................................= ..................................................=20 24

6.=20 CONCLUSIONS
= .........................................................................= ........................................27=

(a)=20 = Findings
.............................................................= ....................................................27

(i) Access to = Information is=20 Necessary for Case=20 = Administration
.......................................................= ..........................................................27

(ii) Access to = Information is=20 Necessary to Ensure=20 = Accountability
.......................................................= ..........................................................27

(iii) Debtors Have a = Privacy=20 Interest in Certain Highly Sensitive=20 = Information
..........................................................= .......................................................28
(iv) Storage of = Personal=20 Information in Government Electronic Systems Poses New = Privacy=20 = Concerns
.............................................................= ....................................................28

(b)=20 = Recommendations
......................................................= ...........................................................28

(i) Balance Interests = In=20 Efficiency, Government Accountability and=20 = Privacy
..............................................................= ...................................................28

(ii) Th General = Public Should=20 Have Access to Core=20 = Information
..........................................................= .......................................................30
(iii) Parties In = Interest=20 Should Have Access to the Full Range of Non-Public = Information,=20 Subject to Re-use=20 = Limitations
..........................................................= .......................................................32
(iv) Incorporate Fair = Information=20 = Principles
...........................................................= ......................................................34
Appendix

I. = Summary of the Public Comments
II= .=20 Information Provided on the Bankruptcy Petition and Related=20 Schedules
I= II.=20 Bibliography

Executive = Summary

INTRODUCTION=20

In=20 April 2000, President Clinton announced a plan to provide = consumers with=20 comprehensive protection of their sensitive financial information. = One set=20 of issues was reserved for special study: the implications for = personal=20 privacy of the availability of personal financial information in=20 bankruptcy cases. The President's announcement noted that = "bankruptcy=20 records contain detailed sensitive information about debtors = (including=20 account numbers, social security numbers, account balances, income = sources, and payment histories). In addition, aggregation and = electronic=20 distribution of this information could lower bankruptcy costs, but = it also=20 could make information easily available to neighbors, employers, = marketers=20 and predators looking for those most likely to be lured by scams." =

The=20 President directed three federal agencies, the Department of = Justice, the=20 Department of the Treasury, and the Office of Management and = Budget (the=20 Study Agencies), to study how best to handle private entities' (1)=20 access (2)=20 to personal financial information found in bankruptcy court=20 records.

ACCESS AND = PRIVACY=20 INTERESTS IN INFORMATION IN BANKRUPTCY

Bankruptcy=20 is a process for adjudicating the debts of an individual or = business=20 unable to meet obligations to creditors. In seeking relief, a = debtor is=20 required, particularly in cases involving consumer debts, to = provide=20 significant amounts of personal information to the courts and = trustees,=20 such as schedules of assets and liabilities, current income and=20 expenditures, and a statement detailing the debtor's financial = affairs.=20 Current law does not explicitly balance the legitimate needs for = general=20 public access to bankruptcy records and debtors' interests in = protecting=20 the privacy of their most sensitive financial information. Current = law=20 provides that all documents filed with the court in a bankruptcy = case are=20 public records and are subject to public examination unless = sealed, and=20 places no restrictions on how trustees can handle information = about=20 debtors in the course of administering cases.

Although=20 information provided by debtors in consumer bankruptcy is = essential to the=20 administration of cases and to the integrity of the bankruptcy = system, the=20 comprehensive data provided by debtors contains sensitive personal = information, such as Social Security numbers, bank or credit card = account=20 numbers, incomes, and detailed listings showing individuals' = medical=20 expenses and other regular expenses. This information, if used = improperly,=20 can damage a debtor's ability to obtain the financial "fresh = start"=20 afforded by bankruptcy, and can be used to perpetrate identity = theft and=20 other crimes.

The=20 emergence of new technologies has an impact on both general public = access=20 to information in bankruptcy and the debtor's interest in the = privacy of=20 such information. Increased use of the Internet and other powerful = databases =96 both in the judicial system and among the general = public =96 is=20 lowering the barriers to access for parties that have an interest = in that=20 information. Personal, often sensitive information, now may be = accessed=20 and manipulated from a distance and used in ways not envisioned = when the=20 rules that currently govern such records were created. This, in = turn,=20 heightens the interests of debtors in ensuring that this = information is=20 protected from misuse by private entities.

REQUEST FOR = PUBLIC COMMENT=20

To=20 assist preparation of the Study, in July the Study Agencies = requested=20 public comment on a series of questions focused on: the types of=20 information collected from individual debtors in bankruptcy; the = need for=20 the general public to have access to such information; the privacy = interests of debtors; and the impact of technology on the = debtor=92s=20 privacy, general public access, and principles for the responsible = handling of personal data. The Study Agencies received and = evaluated=20 approximately 40 comments from the creditor industry, the = information=20 industry, consumer and privacy advocates, bankruptcy experts, = academics,=20 and others.

OUTLINE OF THE = REPORT=20

The=20 body of this report discusses in greater detail the competing = interests of=20 private entities in access to a debtor=92s information in the = personal=20 bankruptcy process and the debtor=92s interest in privacy. It = concludes with=20 a set of recommendations on how the system can strike a better = balance=20 between these interests. Chapter One introduces the issues and = places them=20 in context. Chapter Two describes the consumer bankruptcy process = and the=20 types of information collected from debtors during the process. = Chapter=20 Three explains the purposes of general public access to bankruptcy = records, emphasizing the importance of facilitating the efficient=20 disposition of cases and the need for public trust and = accountability in=20 the system. Chapter Four discusses protecting the privacy of the = debtor=92s=20 personal financial information in bankruptcy court filings in the = context=20 of access and re-use by private entities.

The=20 report then turns to finding solutions to the conflict between = access by=20 the general public and the debtor=92s privacy. Chapter Five = describes models=20 illustrating how the interests of privacy and general public = access have=20 been balanced with respect to other collections of personal data. = The=20 report covers models that strike different balances between the = need for=20 access by the general public to information and interests in = privacy. The=20 Study Agencies also considered the need for adoption of =93fair = information=20 principles=94 described in the body of the report. Finally, = Chapter Six=20 presents a series of findings and recommendations designed to = foster a=20 more appropriate balance between the debtor=92s privacy and = general public=20 access to this information in the bankruptcy process.

LIMITATIONS OF = THE=20 REPORT

The=20 purpose of the report is to address the access and re-use by = private=20 entities of personal information disclosed in bankruptcy filings. = The=20 report=92s recommendations are not intended to address the access = or use of=20 bankruptcy information by governmental entities in connection with = their=20 important public responsibilities, or the communication of = personal=20 financial information by or to governmental entities for functions = they=20 serve. The report also does not address possible First Amendment = issues=20 regarding access to information in bankruptcy cases by the public = and the=20 news media.

The=20 access and use of bankruptcy information by governmental entities = serve=20 important purposes in protecting the integrity of the bankruptcy = system,=20 fighting crime and fraud, and addressing other issues of public = policy.=20

CONCLUSIONS

The=20 conclusions of the Study Agencies are divided into findings and=20 recommendations.

The=20 key findings of the Study are:

(1)=20 The rights of = parties in=20 interest and the fair and efficient administration of cases = require that=20 certain personal information be available to the courts, parties = in=20 interest and governmental entities;

(2)=20 Ensuring = accountability=20 and preventing abuses of the bankruptcy system requires that some = personal=20 information filed in bankruptcy cases be available to the general=20 public;

(3) &nbs= p; =20 Certain personal information collected from debtors in bankruptcy=20 proceedings is highly sensitive and, in other contexts, is = protected by=20 financial privacy laws; and

(4)=20 Information held = by=20 government, including the judicial branch, increasingly is being=20 collected, stored, and transmitted electronically. Although the = use of=20 electronic systems provides more efficient services, it may create = new=20 hazards for the privacy of personal information.

To address these = findings,=20 the Study Agencies submit the following=20 recommendations:

(1) =20 Balance Interests in Efficiency, Government Accountability and=20 Privacy. The Study Agencies recommend that the goal of = protecting=20 personal privacy be given increased emphasis in the bankruptcy = system.=20 Bankruptcy information policy should better balance society=92s = interests in=20 fair and efficient case administration, bankruptcy system = integrity,=20 government accountability, and the debtor=92s privacy. As = electronic tools=20 for accessing case information develop and improve, there is an = increased=20 need for analysis of access issues to ensure the integrity and = proper=20 administration of the system.

(2) =20 The General Public Should Have Access to Core Information. The = Study=20 Agencies recommend that the general public continue to have access = to some=20 general information so that the public can hold the bankruptcy = system=20 accountable. At the same time, the Study Agencies recommend that = the=20 general public not have access to certain highly sensitive = information=20 that poses substantial privacy risks. This information may = include, among=20 other items: Social Security numbers, credit card numbers, loan = accounts,=20 dates of birth, and bank account numbers. Similarly, the Study = Agencies=20 recommend that schedules that show detailed profiles of personal = spending=20 habits and debtors=92 medical information be removed from the = record=20 available to the general public. Finally, the Study Agencies = recommend=20 that special attention be given to protecting information = regarding=20 entities or individuals who are not parties to the bankruptcy = proceeding.=20 This includes detailed personal and financial information = regarding=20 non-filing spouses, relatives, or business partners.

(3) =20 Parties in Interest Should Continue to Have Access to Non-Public = Highly=20 Sensitive Data, Subject to Re-use and Re-disclosure = Limitations. The=20 Study Agencies recommend that parties in interest and potential = parties in=20 interest have access to a broad range of information collected in=20 bankruptcy proceedings in order to exercise their rights and=20 responsibilities. When private entities have such access, however, = the=20 Study Agencies recommend that they generally be prohibited from = reusing or=20 re-disclosing the information for purposes unrelated to = administering=20 bankruptcy cases. However, these re-use and re-disclosure = limitations=20 should not restrict private entities from continuing to share = information=20 with governmental entities, including law enforcement and = government=20 regulatory entities. The Study Agencies recommend that as decision = makers=20 craft information policy on non-public information, they do so in = a way=20 that does not infringe upon the current ability of governmental = entities=20 to gain access and use of this information. The Study Agencies = also=20 recommend that the detailed information that appears in a = bankruptcy=20 filing be available to academics and other researchers on a de- = identified=20 basis, while preserving access for parties in interest and = governmental=20 entities.

(4) =20 Incorporate Fair Information Principles. The Study Agencies = recommend=20 that the bankruptcy system incorporate fair information principles = of=20 notice, consent, access, security, and accountability.

BROADER = IMPLICATIONS OF=20 THE STUDY

This=20 report focuses on how to balance the need for access to = information by=20 private entities and the debtor=92s interests in the privacy of = his or her=20 personal financial information in the context of bankruptcy cases = and=20 proceedings. The Study Agencies intend, however, that the = report=92s=20 methodology and principles also will contribute to the continuing = debates=20 over access to records by the general public and privacy in = non-bankruptcy=20 contexts.

For=20 example, one such debate =96 focusing on judicial records = generally =96 is=20 currently underway. In the judicial branch, accessible files = containing=20 information relevant to individual proceedings allow members of = the=20 general public and the media to monitor the judicial process = closely and=20 prevent abuses of judicial power. At the same time, judicial files = =96=20 beyond bankruptcy filings in court =96 also often contain = sensitive personal=20 information. For example, personal injury litigation may involve = motions,=20 depositions, and interrogatories that contain detailed information = about a=20 patient=92s medical condition, including the results of = psychiatric=20 examinations. An individual=92s privacy concerns may be heightened = if that=20 information is made available through a simple name search on the=20 Internet. The Administrative Office of the U.S. Courts has sought = public=20 comment on the need to balance accountability and privacy concerns = in=20 light of more widespread access to sensitive information in case = files.=20

State=20 and local governments are also faced with this challenge. = Generally=20 speaking, state and local governments operate under an open = records=20 system. As a result, one can visit a state or local government = office and=20 view personal property records, tax records, marriage licenses,=20 recreational licenses, and professional licenses, among other = personal=20 data. As more of this information becomes available electronically = to=20 remote and largely anonymous users, private entities easily can = gain=20 access to the intimate details of an individual=92s life by = compiling a=20 profile of that individual based on a wide range of public record = data.=20

These=20 areas =96 judicial records and state and local government records = =96 are ripe=20 for further study. The Study Agencies hope that the methodology = and=20 principles applied in this bankruptcy study may be drawn upon by=20 researchers looking at public records and privacy more broadly.=20

1.=20 = INTRODUCTION:=20 BANKRUPTCY DATA IN CONTEXT

1(a)&n= bsp; =20 Clinton Administration Initiatives to Protect = Financial

On=20 April 30, 2000, President William J. Clinton announced a = legislative=20 proposal to provide American consumers with comprehensive = protections for=20 their sensitive personal financial data. Building on the = foundation of=20 strong new financial privacy protections signed into law as part = of=20 financial services modernization legislation in 1999, this effort = featured=20 as its centerpiece the proposed Consumer Financial Privacy Act. = This=20 proposed legislation was designed to close gaps in existing laws, = provide=20 consumers with choice about the use of their data within rapidly = growing=20 and diversifying financial conglomerates, and provide special = protections=20 for the use of medical data and detailed information about = individuals=92=20 overall spending habits. In announcing the proposed legislation, = the=20 President said: =93your information doesn't belong to just anyone; = every=20 consumer and every family deserves choices about how their = personal=20 information is shared.=94

At=20 the same time, the President identified one area for additional=20 examination by the Administration, directing the Department of = Justice,=20 the Department of the Treasury, and the Office of Management and = Budget to=20 conduct a study of the privacy issues raised by the availability = of=20 personal financial information in bankruptcy cases to the general = public.=20 A release announcing this study said:

Bankruptcy = records contain=20 detailed, sensitive information about debtors (including account = numbers, social security numbers, account balances, income = sources, and=20 payment histories). Aggregation and electronic distribution of = this=20 information could lower bankruptcy costs, but it also could make = information easily available to neighbors, employers, marketers = and=20 predators looking for those most likely to be lured by scams.(3)

In=20 response to the President=92s directive, the Study Agencies = considered three=20 broad issues. First, the personal information about debtors = collected in=20 bankruptcy cases includes types of information that were the = subject of=20 the Administration=92s financial privacy initiative. At present, = debtors=20 filing for bankruptcy are required to submit substantial amounts = of=20 personal information to courts and trustees. This information is = crucial=20 to several functions of the bankruptcy system, including providing = notice=20 to interested creditors and other parties, facilitating the = administration=20 of bankruptcy cases, protecting creditors=92 rights, and allowing = the=20 general public to monitor the functioning of the bankruptcy = system. At the=20 same time, the data submitted by debtors contains highly sensitive = personal financial information that, if used improperly, could = damage a=20 debtor=92s ability to regain a solid financial footing, and could = be used to=20 perpetrate identity theft or other fraud. The potential for misuse = of this=20 data raises questions about appropriate boundaries for its = dissemination,=20 particularly since the same financial information openly available = in=20 bankruptcy files is often legally protected from disclosure when = held by=20 financial institutions in other contexts.

A=20 second issue addressed by the study is the dramatic change in = access by=20 the general public to information in bankruptcy cases. In = particular,=20 private bankruptcy trustees, interested in providing improved = access to=20 information in bankruptcy cases, have begun planning for a data = center to=20 collect information from trustees and disseminate this information = electronically in compiled form to creditors who subscribe to the = data=20 center. As part of their system development, they are seeking = input on=20 what safeguards should be included to protect the personal = financial=20 information contained in bankruptcy files from re-use by creditors = that=20 subscribe to the data center.

Third,=20 concerns about the collection and use of personal data have been=20 accentuated by proposals to collect information electronically for = easier,=20 faster, and less expensive dissemination in bankruptcy = proceedings. In the=20 age of the Internet, where anonymous remote access and = dissemination of=20 large amounts of information is possible, new questions arise = regarding=20 how to safeguard personal privacy interests without = inappropriately=20 compromising access to information crucial to the efficient = functioning of=20 the bankruptcy system.

This=20 report explores these and other issues and offers recommendations = for=20 consideration by decision makers and participants in the = bankruptcy system=20 about how to strike an appropriate balance between the values of=20 government accountability, fair and efficient case administration, = and=20 personal privacy. It focuses on access to the information provided = by=20 debtors as part of their initial filing commencing a bankruptcy = case,=20 i.e., the identifying information about the debtor and the details = about=20 the debtor=92s financial condition provided to the court or = bankruptcy=20 trustee as part of the administration of the case. The report also = focuses=20 on the way in which dissemination of this information to private = entities=20 through electronic databases can heighten the legitimate interests = of=20 debtors in their financial privacy. (4)

1(b)&n= bsp; =20 Privacy in Public and Judicial Records

This=20 study=92s discussion of access by private entities to data in = personal=20 bankruptcy court files occurs against the backdrop of an ongoing, = broader=20 debate over privacy in public and judicial records. Public = accountability=20 is a fundamental characteristic of the American system of = government. The=20 primary vehicle for preserving that accountability has been the = open,=20 public nature of the U.S. system of executive and judicial record = keeping.=20 In the judicial branch, accessible files containing information = relevant=20 to individual proceedings allow members of the public and the = media to=20 monitor the judicial process closely and prevent abuses of = judicial power.=20 State and local governments also generally make their records = available to=20 the general public to enhance accountability.

However,=20 the rapid growth of information technology has raised concerns = about the=20 sensitivity of some of the information traditionally contained in = public=20 files. A presumption that all information should be a matter of = public=20 record raised fewer privacy concerns when such information was on = paper in=20 courthouses and other government offices, was time-consuming to = access,=20 and more difficult to compile and analyze. Internet databases that = provide=20 instantaneous access to all who seek it may change the calculus = regarding=20 the advantages and disadvantages of keeping vast amounts of = information in=20 public files in the future.

Some=20 parts of the judiciary currently are reviewing how best to balance = the=20 need to make court records publicly available against = individuals=92=20 interests in protecting personal privacy. The Administrative = Office of the=20 U.S. Courts has sought public comment on the need to balance=20 accountability and privacy concerns in light of more widespread = access to=20 sensitive information in case files. (5)=20 Given the current debate, this report is timely in addressing = issues=20 related to one area of the discussion, general public access to = personal=20 financial information in bankruptcy cases. It may also serve as a = useful=20 resource for policymakers addressing other issues of privacy in = public and=20 judicial records.

1(c)&n= bsp; =20 Privacy and Corporate Bankruptcy

Although=20 this report deals solely with personal bankruptcy proceedings, the = Study=20 Agencies note the growing controversy regarding the disposition of = customer information held by companies that file for bankruptcy. = In one=20 instance, a retailer of significant size attempted to treat = information=20 about customers in its files as an asset that may be sold to raise = money=20 to pay creditors in a corporate bankruptcy. The retailer sought to = sell=20 its customer database despite assurances to its customers that = their=20 purchasing and other data would be kept confidential and would not = be sold=20 or transferred to outside entities.

The=20 case involving the retailer and similar proceedings highlight = significant=20 uncertainties regarding the treatment of personal financial data = in=20 corporate bankruptcy, including: the ownership of data in = corporate=20 databases; the rules governing the transfer of data during changes = of=20 corporate ownership; and the rights of consumers to control their = personal=20 data on an ongoing basis, beyond the time at which data is = supplied or=20 collected. The sensitivity =96 as well as the sheer volume =96 of = data=20 involved in this kind of situation merits further attention. This = report=20 is focused on information involved in personal bankruptcy = proceedings, and=20 will not address these corporate bankruptcy issues directly. = However, the=20 Study Agencies believe that these issues should be examined = carefully in=20 the future in an ongoing effort to better understand the privacy = interests=20 at stake in all types of bankruptcy proceedings.

1(d)=20 Outline of = the=20 Report

This=20 report discusses in greater detail the competing interests of = access by=20 the general public and the debtor=92s privacy in the personal = bankruptcy=20 process and concludes with a set of recommendations on how the = system can=20 strike a better balance between these interests. Chapter One = introduces=20 the issues and places them in context. Chapter Two describes the = consumer=20 bankruptcy process and the types of information collected from = debtors=20 during the process. Chapter Three explains the purposes of general = public=20 access to bankruptcy records, emphasizing the importance of = facilitating=20 the fair and efficient disposition of cases and the need for = public trust=20 and accountability in the system. Chapter Four discusses reasons = for=20 protecting the debtor=92s privacy of personal financial = information from=20 access by the general public in the specific context of consumer=20 bankruptcy.

The=20 report then turns to identifying solutions to the conflict between = general=20 public access and the debtor=92s privacy. Chapter Five describes = models=20 illustrating how the interests of privacy and general public = access have=20 been balanced in other contexts in which personal information is=20 collected. The report covers models that strike different balances = between=20 the need for access by the general public to information and = interests in=20 privacy. The Study Agencies also considered the need for adoption = of fair=20 information principles. Finally, Chapter Six presents a series of = findings=20 and recommendations designed to foster a more appropriate balance = between=20 the debtor=92s privacy and general public access to information in = the=20 bankruptcy process.

1(e)&n= bsp; =20 Limitations of the Study

The=20 purpose of the report is to address the general public access to = personal=20 information disclosed in bankruptcy filings and the re-use of that = information. The report=92s recommendations on these issues are = not intended=20 to address the access or use of bankruptcy information by = governmental=20 entities, including for law enforcement, government debt = collection, and=20 regulatory activities, in connection with their important public=20 responsibilities, or the communication of bankruptcy information = by or to=20 governmental entities for functions they serve.

Governmental = entities use bankruptcy information in a variety of contexts. If a = government entity has a claim in a bankruptcy case, it will be a = =93party in=20 interest=94 and will obtain information related to the case in the = same=20 manner as any other party in interest. Governmental entities, = including=20 law enforcement, also may need access to bankruptcy information in = other=20 contexts, such as representing the interests of the federal = government, in=20 the investigation and prosecution of bankruptcy fraud, tax fraud = and other=20 crimes, and for regulatory and civil enforcement. Private entities = also=20 may have an obligation or desire to share information with = governmental=20 entities in connection with one or more of these or similar = purposes.=20 Significantly, the needs of law enforcement and other legitimate=20 governmental uses are afforded exceptions from statutes and = regulations=20 governing privacy, or may be allowed broader rights of access and = use than=20 private parties.=20 (6)

The=20 access to and use of bankruptcy information by governmental = entities serve=20 important purposes in protecting the integrity of the bankruptcy = system,=20 detecting and prosecuting non- bankruptcy related crimes, and = addressing=20 issues of public policy. Indeed, the Study Agencies are not aware = of any=20 alleged abuse of bankruptcy information by government agencies. = This=20 report is not intended to address these needs, nor should it be = considered=20 as recommending any change in current policy in this = regard.

2.=20 = BANKRUPTCY LAW = AND PERSONAL INFORMATION IN BANKRUPTCY

This chapter = provides an=20 overview of the consumer bankruptcy process, including a = description of=20 the kinds of information a debtor must provide during a consumer=20 bankruptcy case and how that information is made available to the = general=20 public. This chapter also describes two major financial privacy = laws as=20 they relate to information in the bankruptcy system.

2(a)=20 Overview of = the=20 Consumer Bankruptcy Process

Bankruptcy is a = judicial=20 process for adjudicating the debts of an individual or a business = unable=20 to meet obligations to creditors. A bankruptcy case is a = collective=20 proceeding involving a debtor and the debtor's creditors. There = are five=20 types of bankruptcy cases provided for under the Bankruptcy Code, = two of=20 which =96 Chapter 7 and 13 cases =96 commonly are referred to as = consumer=20 bankruptcies.

Chapter=20 7 and 13 Cases

A=20 Chapter 7 proceeding, sometimes referred to as =93Liquidation,=94 = involves a=20 court- supervised procedure by which a trustee collects the assets = of the=20 debtor's estate, reduces them to cash, and makes distributions to=20 creditors, subject to the debtor's right to retain certain exempt = property=20 and the rights of secured creditors. In many Chapter 7 cases, = there is=20 little or no money available from the debtor=92s estate to pay = creditors. As=20 a result, there are few issues or disputes, and the debtor is = normally=20 granted a =93discharge=94 of most debts without objection. This = means that the=20 debtor will no longer be personally liable for repaying the debts. =

In=20 a Chapter 13 proceeding, sometimes referred to as =93Adjustment of = Debts of=20 an Individual With Regular Income,=94 the debtor usually remains = in=20 possession of the property of the estate and makes payments to = creditors=20 through the trustee, based on the debtor's anticipated income over = the=20 life of a plan that is approved by the court, usually three to = five years.=20 Unlike in proceedings under Chapter 7, the debtor does not receive = an=20 immediate discharge of debts. The debtor must complete the = payments=20 required under the plan before the discharge is received. The = debtor is=20 protected from lawsuits, garnishments, and other creditor action = while the=20 plan is in effect. Thus, a Chapter 13 proceeding often enables the = debtor=20 to keep a valuable asset, such as a house.

Appointmen= t=20 of The Trustee

Chapter=20 7 and Chapter 13 trustees are not federal employees, but rather = are=20 private individuals appointed pursuant to Title 28 U.S.C. =A7 = 586(a), and=20 supervised by the Department of Justice.

Following=20 a Chapter 7 filing, an impartial case trustee is appointed by the = United=20 States trustee, or in Alabama and North Carolina, the Bankruptcy=20 Administrator, to administer the case and liquidate the debtor's = nonexempt=20 assets. (7)=20 If, as is often the case, all of the debtor's assets are = exempt or=20 subject to valid liens, there will be no distribution to unsecured = creditors. Typically, as mentioned above, most Chapter 7 cases = involving=20 individual debtors are "no asset" cases. If the case appears to be = an=20 "asset" case at the outset, unsecured creditors who have claims = against=20 the debtor must file their claims with the clerk of court within = 90 days=20 after the first date set for the first meeting of creditors called = under =A7=20 341 of the Bankruptcy Code. (8)

Upon=20 the filing of the Chapter 13 petition, an impartial trustee is = appointed=20 to administer the case.(9)=20 If the number of cases so warrants, the United States trustee = or=20 Bankruptcy Administrator may appoint a standing trustee to serve = in all=20 Chapter 13 cases in a district. (10)=20 A primary role of the Chapter 13 trustee is to serve as a = disbursing=20 agent, collecting payments from debtors and making distributions = to=20 creditors.=20 (11) In a Chapter 13 case, unsecured creditors who have claims = against=20 the debtor must file their claims with the court within 90 days = after the=20 first date set for the meeting of creditors. (12)=20 The debtor must file a plan for the repayment of creditors. (13)

Meeting=20 of Creditors

A=20 "meeting of creditors," commonly referred to as a "341 meeting" is = usually=20 held 20 to 40 days after the petition is filed. The debtor must = attend=20 this meeting, at which creditors may appear and ask questions = regarding=20 the debtor's financial affairs and property. (14)=20 The trustee also attends this meeting and the debtor must provide = the=20 trustee with financial records requested by the trustee. =

Confirmati= on=20 of the Plan (Chapter 13)

After=20 the meeting of creditors is concluded, the bankruptcy judge must = determine=20 at a confirmation hearing whether the debtor=92s plan for = repayment of=20 creditors is feasible and meets standards for confirmation set = forth in=20 the Bankruptcy Code. (15)=20 Within thirty days after the filing of the plan, even if the plan = has not=20 yet been approved by the court, the debtor must start making = payments to=20 the trustee. (16)=20 If the plan is confirmed by the bankruptcy judge, the Chapter 13 = trustee=20 commences distribution of the funds received in accordance with = the plan=20 "as soon as practicable." (17)

Discharge<= /B>

        A=20 discharge in a Chapter 7 or Chapter 13 case releases the debtor = from=20 personal liability for discharged debts and prevents the creditors = owed=20 those debts from taking any action to collect the debts against = the debtor=20 or his or her property. In most Chapter 7 cases, unless a = complaint has=20 been filed objecting to the discharge or the debtor has filed a = written=20 waiver, the discharge will be granted relatively early in the = case, that=20 is 60 to 90 days after the date first set for the meeting of = creditors.=20

       A=20 Chapter 13 debtor is entitled to a discharge upon successful = completion of=20 all payments under the confirmations plan. (18)=20 In return for the willingness of the Chapter 13 debtor to undergo = the=20 discipline of a repayment plan of three to five years, a broader = discharge=20 is available under Chapter 13 than in a Chapter 7 case. As a = general rule,=20 the debtor is discharged from all debts provided for by the = confirmation=20 plan or disallowed, except certain long-term obligations (such as = a home=20 mortgage), debts for child support, and debts for most government = funded=20 or guaranteed educational loans or benefit overpayments (19)

        Adversary Proceedings and = Contested=20 Matters

        In=20 addition to the bankruptcy process described above, there are two = types of=20 litigation that may arise in the course of a bankruptcy = proceeding:=20 adversary proceedings and contested matters. Adversary proceedings = resemble ordinary federal court civil lawsuits. They include most = actions:=20 to recover money or property; to determine the validity, priority, = or=20 extent of a lien; to determine the debtor's right to a discharge = in=20 bankruptcy or the dischargeability of a particular debt; and to = obtain an=20 injunction or other equitable relief, as well as several other = categories=20 of important suits.

        The=20 procedures and practice in an adversary proceeding are similar to = those in=20 an ordinary civil action in the federal district court. The = Federal Rules=20 of Civil Procedure are made applicable for the most part, being=20 incorporated verbatim by reference or sometimes with modifications = to=20 accommodate special bankruptcy requirements. Thus, an adversary = proceeding=20 involves the filing of a complaint, an answer, and the other = pleadings and=20 motions permitted by the civil rules. The discovery rules, the = rules=20 governing trial, judgment, and provisional and final remedies are = all made=20 applicable in whole or to a considerable extent.

        Bankruptcy=20 litigation that is not an adversary proceeding is defined as a = "contested=20 matter." Examples of contested matters include: objections to = claims or to=20 the debtor's asserted exemptions; disputes concerning relief from = the=20 automatic stay, or the debtor's right to use a secured party's = collateral,=20 or to assume or reject an executory contract; and proceedings = involving=20 objections to confirmation of a repayment plan under the = rehabilitation=20 Chapters of the Bankruptcy Code.

        2(b)&n= bsp;       =20 Personal Information Collected from the Debtor

        Both=20 Chapter 7 and Chapter 13 cases begin with the debtor filing a = petition in=20 a bankruptcy court serving the area where the debtor lives. (20)=20 In addition to the petition, the debtor is required to file with = the court=20 schedules of assets and liabilities, current income and = expenditures, and=20 executory contracts and unexpired leases, as well as a statement = answering=20 detailed questions about the debtor's financial affairs. (21)=20 To complete the Official Bankruptcy Forms that make up the = petition and=20 schedules, a debtor must compile:

a list of = creditors and=20 the amount and nature of their claims;=20
the source, = amount, and=20 frequency of the debtor's income;
a list of all of = the=20 debtor's property; and
a detailed list = of the=20 debtor's monthly living expenses, such as, food, clothing, = shelter,=20 utilities, taxes, transportation, and medical expenses. =

        Many=20 items, such as insurance policies and annuities, must be itemized = and=20 valued and the policy numbers disclosed. If a debt is a charge = account or=20 related to a credit card, the account number must be provided in = addition=20 to the name and address of the creditor. In addition, the schedule = of=20 current income must include the names, ages, and relationships of = all=20 dependents of the debtor. The debtor's Social Security number also = appears=20 on the front of the voluntary petition. (22)=20 A debtor who fails to make full and complete disclosure risks = denial of a=20 discharge (23)=20 and criminal penalties. (24)=20

        Bankruptcy=20 Rules also contain provisions regarding information about the = debtor that=20 must be filed with the court. Rule 3001(c) requires that an = original or=20 duplicate of any writing that is the basis of a claim against a = debtor be=20 filed with the proof of claim. Pursuant to this rule, a variety of = documents containing personal financial information may be filed = with the=20 bankruptcy court. Under Rules 1005 and 9004(b) the bankruptcy = petition and=20 every other document filed by the debtor must contain the title of = the=20 case, which includes the debtor=92s Social Security number and tax = identification number. (25)

        As=20 discussed above, the debtor is required to attend the meeting of=20 creditors, at which time supplemental information may be obtained = through=20 examinations of the debtor by the trustee or creditors, who appear = and ask=20 questions regarding the debtor's financial affairs. Rule 2004 = provides for=20 further examination of the debtor or of other entities on order of = the=20 court. A Rule 2004 examination permits a broad range of inquiry = into all=20 matters relevant to the debtor's financial affairs, which includes = an=20 inquiry into the validity of a creditor's disputed claim. Rule = 2004 is=20 designed to enable the parties in interest and primarily the = trustee, to=20 conduct an examination in addition to the examination of the = debtor at the=20 meeting of creditors regarding matters that relate to the general=20 administration of the estate, including matters relating to the = debtor's=20 right to a discharge of an individual debt. Although transcripts = of these=20 examinations can be made, they are not routinely made a part of = the court=20 record. Similarly, the documents produced are not typically made a = part of=20 the record until used in litigation.

        2(c)=20         Access to = the=20 Debtor=92s Personal Information

        General=20 Public Access Under Bankruptcy Code =A7 107(a)

        Under=20 =A7 107(a) of the Bankruptcy Code, information filed in a = bankruptcy case=20 generally becomes part of the public record. Section 107(a) = provides:=20

Except as = provided in=20 subsection (b) of this section, a paper filed in a case under = this title=20 and the dockets of a bankruptcy court are public records and = open to=20 examination by an entity at reasonable times without charge.(26)

        Section=20 107(a) essentially codifies for the bankruptcy courts the common = law right=20 of general public access to court records. The legislative history = of =A7=20 107 makes it clear that all documents filed with the bankruptcy = court are=20 subject to public review. (27)=20 In practice, therefore, any paper filed with the court in a = bankruptcy=20 case is subject to public inspection unless sealed (see discussion = below).=20

Under the = Bankruptcy Code,=20 therefore, public disclosure issues are resolved under =A7107. (28)=20 Consequently, some courts take the position that a bankruptcy = court need=20 not balance the equities in deciding a general public access issue = because=20 Congress already did so when it enacted =A7107. (29)=20 Pursuant to this approach, a bankruptcy court would focus on = whether the=20 information at issue falls under an exception to access set forth = in=20 =A7107(b), which is discussed further below.

        The=20 mandatory nature of =A7107(a) and the comprehensiveness of = documents subject=20 to it, therefore, may afford bankruptcy courts less flexibility in = resolving disclosure issues than courts operating solely under the = common=20 law doctrine of general public access, which leaves a = determination=20 regarding the presumptive right of general public access to the = discretion=20 of the trial court. (30)

        Access=20 by Parties In Interest Under Bankruptcy Code =A7 = 704(7)

        Under=20 =A7 704(7) of the Bankruptcy Code, a trustee appointed in a = bankruptcy case=20 has a statutory duty to provide information concerning a = debtor=92s estate=20 and its administration at the request of any party in interest. (31)=20 A bankruptcy trustee also is subject to fines and forfeiture of = office for=20 refusing a party in interest a reasonable opportunity to inspect = documents=20 and accounts relating to a debtor=92s estate. (32)=20 There are no statutory limitations on further dissemination of the = information provided by the trustee, but the court retains = discretion to=20 limit disclosure in situations where protection is = warranted.

        2(d)&n= bsp;       =20 Limits on Access to the Debtor=92s Personal Information =

        Limits=20 on Access Under Bankruptcy Code =A7 107(b)

        As=20 described above, there are some limitations under =A7107 as to = what material=20 becomes part of the public record. Specifically, =A7107(b)=20 provides:

(b) On request of = a party=20 in interest, the bankruptcy court shall, and on the bankruptcy = court's=20 own motion, the bankruptcy court may:

          &= nbsp;     (1)=20 protect an entity with respect to a trade secret or confidential = research,=20 development, or commercial information; or
          &= nbsp;     (2)=20 protect a person with respect to scandalous or defamatory matter = contained=20 in a paper filed in a case under this title.

       Whether=20 certain information at issue falls under the =A7107(b) exception = is a=20 question of fact to be determined by the court. (33)=20 Section 107(b) is generally viewed as a restriction on the general = public=92s right of access warranted only when dissemination of = the subject=20 information risks substantial and serious harm and there is no = less=20 intrusive means of protection. (34)=20 Some bankruptcy courts apply a balancing of interests approach = even when=20 information is sought that falls squarely within a =A7107(b) = exception.=20 (35)

        Limits=20 On Access Under Bankruptcy Rule 7005

        Bankruptcy=20 Rule 7005, which incorporates Federal Rules of Civil Procedure 5 = (Federal=20 Rule 5) also provides some limit on access to documents filed in = adversary=20 proceedings in bankruptcy court. Federal Rule 5 provides: =

        Rule=20 5. Serving and Filing Pleadings and Other Papers

(d) Filing; = Certificate of=20 Service. All papers after the complaint required to be served = upon a=20 party, together with a certificate of service, must be filed = with the=20 court within a reasonable time after service, but disclosures = under Rule=20 26(a)(1) or (2) and the following discovery requests and = responses must=20 not be filed until they are used in the proceeding or the court = orders=20 filing: (i) depositions, (ii) interrogatories, (iii) requests = for=20 documents or to permit entry upon land, and (iv) requests for=20 admission.

        Federal=20 Rule 5 provides some protection to personal information that is = disclosed=20 in discovery, but not used in the course of litigation. However,=20 Bankruptcy Rule 7005, which incorporates Federal Rule 5, applies = only to=20 adversary proceedings in bankruptcy court. Many issues in = bankruptcy=20 court, such as the validity of claims and exemptions, are = litigated as=20 contested matters and not as adversary proceedings. Because there = is no=20 prohibition against filing discovery materials obtained during the = course=20 of contested matters, additional personal financial information = may become=20 part of the court record.

        2(e)&n= bsp;       =20 Judicial Branch Policy on General Public Access to Case=20 Files

        Case=20 files are maintained by the clerk of court as the official record = of=20 litigation in the federal courts. As a general rule the public = case file=20 consists of all pleadings, orders, notices, exhibits, and = transcripts=20 filed with the clerk of court. It is currently standard practice = that case=20 files are open for inspection and copying during normal business = hours.=20 There is also a general presumption that court files are available = to=20 anyone upon request. Courts do not make access determinations = based on the=20 status of the requestor. The federal judiciary also offers various = electronic public access (EPA) services that allow the public to = gain=20 quick access to official court information and records from = outside the=20 courthouse.

        Disputes=20 over access to case files are addressed on a case-by-case basis by = individual judges. Judges address privacy interests in case files = mainly=20 through discretionary sealing of files or documents. Although = judges may=20 act on their own initiative, sealing of case files usually occurs = on a=20 case-by-case, or document-by-document, basis in response to a = motion to=20 seal.

        The=20 federal courts are moving swiftly to create electronic case files, = and to=20 provide general public access to those files through the Internet. = This=20 transition from paper files to electronic files is transforming = the way=20 case file documents may be used by attorneys, litigants, courts, = and the=20 public by providing new access capabilities. The creation of = electronic=20 case files means that the ability to obtain documents from a court = case=20 file no longer will depend on physical presence in the courthouse = where a=20 file is maintained. Increasingly, case files may be viewed, = printed, or=20 downloaded remotely by anyone, at any time, through the Internet.=20

        Electronic=20 files are being created in two ways. Many courts are creating = electronic=20 images of all paper documents that are filed. Other courts are = receiving=20 electronic court filings over the Internet directly from = attorneys, so=20 that the original file is no longer a paper file, but a collection = of the=20 electronic documents filed by the attorneys and the court. Over = the next=20 few years electronic filing, as opposed to making electronic = images of=20 paper documents, will become more common as most federal courts = begin to=20 implement a new case management system, called Case = Management/Electronic=20 Case Files (CM/ECF). That system gives each court the option to = create=20 electronic case files by allowing lawyers and parties to file = their=20 documents over the Internet. CM/ECF also allows the courts to = combine=20 electronic images with other electronic documents to create a = complete=20 electronic case file.

        The=20 courts plan to provide general public access to electronic files, = both at=20 the courthouse through public computer terminals, and remotely, = through=20 their Internet websites. The web- based systems will contain both = the=20 dockets (a list of the documents filed in the case) and the actual = case=20 file documents.

        2(f)&n= bsp;       =20 National Data Center Policy on Access to Case Files

        The=20 National Association for Chapter Thirteen Trustees (NACTT) is in = the=20 process of establishing a National Data Center (NDC) that will = make case=20 information maintained by the private trustees assigned to the = debtor=92s=20 bankruptcy case available over the Internet to parties in = interest. The=20 NDC has indicated that it will contract with the private trustees=20 regarding transmission of the information and will provide debtors = notice=20 that parties in interest will have Internet access to their case=20 information. In addition, by signing the contract, private = trustees agree=20 to investigate and rectify errors in the data reported should = errors be=20 discovered. To protect against parties in interest re-disclosing = debtor=20 information to outsiders, the NDC also will contract with = creditors to=20 ensure that they only use this information with respect to = bankruptcy=20 claims, and to prohibit the selling or re-disclosing of debtor=20 information. Finally, the NDC has asserted that it will establish = and=20 maintain a secure electronic database to prevent unauthorized = access, and=20 limit accessibility of debtors=92 sensitive information. =

        2(g)&n= bsp;       =20 Financial Privacy Statutes That May Apply In Bankruptcy=20 Proceedings

        In=20 addition to the Bankruptcy Code and other bankruptcy rules and = policies,=20 there are two general financial privacy statutes that may have = relevance=20 to the collection and use of information in the bankruptcy = process: the=20 Fair Credit Reporting Act and the Gramm-Leach- Bliley = Act.

        2(g)(i)=20         The Fair = Credit=20 Reporting Act

        The=20 Fair Credit Reporting Act (FCRA) (36)=20 governs certain kinds of financial and other personal information = included=20 within the definition of a =93consumer report.=94 This generally = includes=20 information bearing on any one or more of the following = characteristics of=20 an individual: credit worthiness, credit standing, credit = capacity,=20 character, general reputation, personal characteristics, or mode = of living=20 (the seven factors), where the information is intended to be used = as a=20 factor in establishing the individual=92s eligibility for credit = or=20 insurance, for employment purposes, or for any other purpose = permitted=20 under the FCRA. (37)=20 An entity that collects this type of information may be deemed to = be a=20 =93consumer reporting agency=94 under the FCRA, and as such, = subject to=20 certain restrictions on its use and disclosure of the information. =

        Information=20 about a bankruptcy debtor=92s bank cards, auto loans and leases, = mortgages,=20 and student loans, including credit limits, payment histories, and = high=20 credit balances =96 all of which may be made available in a = bankruptcy case=20 =96 is precisely the type of information covered by the FCRA. = However, since=20 the FCRA does not apply unless this information is used or = expected to be=20 used in order to make credit, employment or other types of = decisions about=20 an individual specified in the FCRA, the use of this information = to=20 administer the bankruptcy process is not likely to implicate the = FCRA.=20 Nonetheless, if an entity regularly collects the type of personal=20 information described above from bankruptcy court records and = other phases=20 of the bankruptcy process and communicates it for any of the = purposes=20 covered by the FCRA, that entity may be deemed to be a consumer = reporting=20 agency subject to the FCRA. The FCRA then would govern the = processing of=20 the information by the entity that collected it, by organizations = that=20 furnish the information to the entity, and by recipients of the=20 information, i.e., users of consumer reports.

        2(g)(ii)=20 =         Gramm-Leach-Bliley= =20 Act of 1999

        Title=20 V of the Gramm-Leach-Bliley Act of 1999 (GLBA) (38)=20 limits the extent to which banks, insurance companies, or other = financial=20 institution (39)=20 may disclose personal information about consumers (40)=20 with whom they do business. As discussed further below, the = GLBA=92s=20 disclosure limitations appear to have limited application to = information=20 about a debtor generated in a bankruptcy case because much of that = information is made part of the public record and, therefore, is = outside=20 the scope of the GLBA=92s limits on disclosure. Moreover, the GLBA = does not=20 restrict a financial institution=92s ability to disclose = information to its=20 affiliates. (41)=20 Consequently, the GLBA does not appear to provide comprehensive = legal=20 protections for debtors=92 privacy interests in the bankruptcy = context.=20

       It=20 is important to note, however, that the GLBA=92s financial privacy = provisions are in the early stage of implementation, and full = compliance=20 with their requirements is not required until July 1, 2001.(42)=20 Consequently, many interpretive issues that are likely to arise = =96 such as=20 how the law applies to information generated in the bankruptcy = process =96=20 have not ripened to the point where the agencies charged with=20 administering the law have had the opportunity formally to address = them.=20 Nonetheless, it is possible to discuss the GLBA=92s requirements = generally=20 and to identify specific issues that may bear on how the law = applies in=20 the bankruptcy context.

        The=20 GLBA provides that before a financial institution may disclose = nonpublic=20 personal information about a consumer to a non-affiliated company, = the=20 institution must give the consumer notice of the types of = companies that=20 may receive the information and the opportunity to prevent (i.e., = opt out=20 of) the disclosure. (43)=20 In general, nonpublic personal information is any personally = identifiable=20 financial information about the consumer, other than publicly = available=20 information. (44)=20 Nonpublic personal information includes not only specific = information=20 about an individual=92s finances =96 such as annual income, = outstanding loans,=20 and payment history =96 but also any identifying information =96 = such as an=20 individual=92s Social Security number, address and telephone = number =96 that=20 is obtained by a financial institution for the purpose of = providing a=20 financial product or service to the individual. (45)=20 In addition, the fact that an individual has obtained a financial = product=20 or service from a financial institution as a consumer, or has a = customer=20 relationship (46)=20 with a financial institution, is nonpublic personal information if = it is=20 not publicly available. (47)

        If=20 the consumer exercises his right to opt out of the disclosure of = his=20 nonpublic personal information, the financial institution must = honor the=20 consumer=92s opt-out direction until the consumer revokes it. (48)=20 Furthermore, the opt-out direction applies to any nonpublic = personal=20 information collected by the financial institution that is related = to the=20 institution=92s customer relationship with the consumer, even if = the=20 customer relationship has terminated. (49)=20 Consequently, the opt-out direction continues to be effective as = to=20 nonpublic personal information collected by a financial = institution as a=20 party in interest in a bankruptcy proceeding filed by one of its = customers=20 or former customers. (50)=20

        Although=20 a debtor=92s opt-out direction continues to apply during the = bankruptcy=20 process, it generally does not apply to information that is = publicly=20 available. (51)=20 A financial institution may consider information to be publicly = available=20 if the institution reasonably believes that the information is = lawfully=20 made available to the general public from, among other sources, = federal=20 government records. (52)=20 As discussed above, documents filed in bankruptcy cases are = generally=20 available for public inspection pursuant to =A7 107(a) of the = Bankruptcy=20 Code (53)=20 and current judicial branch policy. These documents include the = identities=20 of a debtor=92s creditors and detailed information about his = assets and=20 liabilities. Consequently, the existence of a debtor=92s customer=20 relationship with a financial institution and the details of that=20 relationship become publicly available as a result of a bankruptcy = filing=20 and, therefore, would not be subject to the debtor=92s right to = opt-out of=20 disclosure by the financial institution.(54)

        In=20 contrast, other financial information about the debtor that is = generated=20 in a bankruptcy case may be available only to parties in interest. = For=20 instance, in a Chapter 13 case, a debtor=92s record of making = payments to a=20 trustee pursuant to a payment plan generally is not the type of=20 information that would be included in a document filed with the = court. The=20 trustee may provide this information to the parties in interest, = however,=20 so that they may verify that the trustee is distributing payments = in=20 accordance with the terms of the plan. This type of information = probably=20 would not be considered to be publicly available under the GLBA = and,=20 therefore, might be subject to a debtor=92s right to opt-out of = disclosure=20 of the information.

        In=20 sum, the GLBA=92s disclosure limitations appear to have limited=20 applicability in the bankruptcy context because a large amount of=20 information detailing a debtor=92s customer relationship with a = financial=20 institution becomes part of the public record in a bankruptcy = proceeding=20 and, therefore, is outside the scope of the GLBA.

3.=20         THE NEED = FOR=20 GENERAL PUBLIC ACCESS TO FINANCIAL INFORMATION IN=20 BANKRUPTCY

This chapter = examines the=20 need for access by the general public to financial information in=20 bankruptcy proceedings. In particular, this chapter reviews the = two main=20 purposes of access: facilitating the fair and efficient = disposition of=20 cases, and promoting public trust and accountability in the = bankruptcy=20 system.

        3(a)&n= bsp;       =20 Facilitating the Fair and Efficient Disposition of Bankruptcy = Cases=20

        As=20 discussed above, a debtor must file with the bankruptcy court = schedules=20 listing assets, income, liabilities, the names and addresses of = all=20 creditors, and the amount owed to each creditor. This information=20 generally is necessary for the identification and collection of = assets and=20 the proportionate distribution to creditors that is central to the = bankruptcy process.

        The=20 clerk of court uses the information contained in the debtor's = schedules to=20 notify all listed creditors that the debtor has filed a bankruptcy = petition. Once the creditors receive notice, they are required to = file=20 proofs of claim in order to share in any distribution from the = debtor's=20 property. Creditors use the account numbers and the Social = Security number=20 provided by the debtor to positively identify the debtor, whose = name may=20 be similar to that of other account holders. Account balance = information=20 submitted by the debtor allows the creditor to compare the amount = the=20 debtor thinks he or she owes the creditor with the creditor=92s = own records.=20 In addition, by looking at the amount of the debtor=92s other = liabilities,=20 the nature of those liabilities, and the debtor=92s assets and = income, the=20 creditor can evaluate what if any dividend it will receive on its = claim.=20

        The=20 information in the schedules and the statement of financial = affairs also=20 allows the trustee to challenge unjustified claims by creditors,=20 investigate possible misconduct by the debtor before and during = the=20 bankruptcy, and recover claims that the bankruptcy estate may have = against third = parties,=20 including entities who may have received fraudulent transfers or=20 preferential payments from the debtor during the period = immediately before=20 bankruptcy.

        At=20 the end of the liquidation process, individual debtors normally = receive a=20 "discharge" of all pre-bankruptcy claims against them, except for = certain=20 non-dischargeable claims, such as support of dependents or taxes. = Any=20 party in interest, including creditors and the trustee in = bankruptcy, may=20 object to the discharge of a particular claim or to the debtor's = general=20 discharge, on grounds such as fraud by the debtor (e.g., that = debtor=20 failed to disclose all assets). If a timely objection is made, the = bankruptcy court will hold a hearing. The financial information = contained=20 in the debtor's schedules and statement of affairs is important in = the=20 determination by a trustee, creditor, or law enforcement = investigator of=20 whether a debtor has tried to defraud a single creditor such that = a=20 specific claim should not be discharged or whether the debtor has = tried to=20 defraud all creditors such that the debtor should be denied a = general=20 discharge.

        In=20 a Chapter 13 case, the trustee will use the information in = schedules filed=20 by the debtor to determine whether the debtor is eligible for = relief under=20 Chapter 13 and whether the debtor's repayment plan meets the = requirements=20 of the Bankruptcy Code. The creditors will use the information to=20 determine whether to object to confirmation of the plan. =

        3(b)=20         Promoting = Public=20 Trust and Accountability in the Bankruptcy System

        Section=20 107(a) of the Bankruptcy Code codifies the general public's right = under=20 common law to inspect and copy public documents, including = judicial=20 records. (55)=20 The right of general public access to court case files is a subset = of the=20 more general public =93right to know=94 about the workings of = government. The=20 courts have consistently recognized the salutary purposes of = general=20 public access, focusing on the public=92s need to ensure judicial = fairness=20 and accountability. Courts have noted, for example, that general = public=20 access to court records: =93allows the citizenry to monitor the = functioning=20 of our courts, thereby insuring quality, honesty, and respect for = our=20 legal system=94; (56)=20 =93diminish[es] possibilities for injustice, incompetence, perjury = and=20 fraud=94; and promotes =93a more complete understanding of our = judicial system=20 and a better perception of its fairness.=94(57)

4.        = =20 PRIVACY INTERESTS IN FINANCIAL INFORMATION IN=20 BANKRUPTCY

        This=20 chapter examines the protection of personal financial information = and the=20 special privacy interests of debtors.

        4(a)=20         Privacy Interests = in=20 Financial Information

        Privacy=20 is considered by many Americans to be a fundamental right. Over = time, the=20 legal framework protecting individual privacy has evolved to = respond to=20 changes in the way sensitive personal information is obtained, = retained,=20 and used. Personal financial records, which can include lists of=20 purchases, bank account numbers, and other unique identifiers, = contain=20 some of the most sensitive information about individuals. If used=20 unscrupulously, this information can cause substantial harm. =

        In=20 a world of paper records and unaffiliated financial institutions, = which=20 characterized the U.S. financial system for most of its history, = financial=20 privacy concerns were relatively minor. Information on individuals = was=20 difficult to obtain, was not widely shared among institutions, and = was not=20 generally used as an asset for marketing or other purposes. Today, = however, three major developments are raising new concerns about=20 protection of personal financial information.

        First,=20 financial information now flows much more rapidly, and in much = greater=20 volumes, than ever before. An ordinary desktop computer is now=20 significantly more powerful than the mainframe of 30 years ago, = and can=20 store, manipulate, and analyze far more information at vastly = lower costs.=20 Advances in telecommunications allow this information to be sent = anywhere=20 in the world instantaneously, at similarly low costs. These = technological=20 developments have created opportunities for the sharing of = information=20 among institutions that were scarcely envisioned even a few years = ago. In=20 addition, the advent of large databases available through the = Internet=20 creates new opportunities for access by the general public to = information=20 about individuals, often without the subject=92s knowledge or = consent. The=20 free flow of information that is now possible offers many = advantages in=20 economic efficiency and individual well-being. At the same time, = it poses=20 potential new threats to a debtor=92s privacy.

        A=20 second key change is the growing integration and consolidation = among=20 financial services providers. Interstate banking and branching = have=20 allowed banks to grow larger than ever before, and the removal of=20 regulatory restraints has allowed financial services organizations = to=20 enter lines of business that were previously off limits. Banks, = for=20 example, may now affiliate with firms ranging from travel agencies = to=20 health insurance providers. This integration will allow firms and=20 consumers to benefit from =93economies of scale,=94 in which the = provision of=20 related financial services together can better meet consumers=92 = demands at=20 a lower cost. But these economies stem, in part, from an ability = to share=20 consumer data across affiliated entities =96 and that sharing also = raises=20 legitimate privacy concerns.

        A=20 third change is the increasing use of electronic means of = purchasing and=20 payment. Americans=92 increasing use of credit cards, debit cards = =96 and more=20 recently electronic bill payment =96 in lieu of cash now allows = financial=20 services companies to collect enormous amounts of detailed = information=20 about an individual=92s transactions. Until recently, neither = institutions=20 nor individuals were able to create detailed lifestyle portraits = using=20 such information.

        The=20 creation of electronic case files and the electronic collection = and=20 dissemination of bankruptcy information are in their earliest = stages. Data=20 on the actual harm resulting from these developments are = relatively=20 scarce. However, these developments could create a risk for = possible=20 misuse or objectionable re-use. As the comment submitted on behalf = of 20=20 State Attorneys General noted, =93the ready availability of such=20 information, particularly when it may be easily obtained and = copied from=20 electronic filings that can be accessed from the Internet, greatly = increases the concerns about the uses to which the data might be = put. . .=20 . The ability to obtain large amounts of information = at low=20 cost makes the use of bankruptcy data for commercial purposes = economically=20 feasible in ways that were not possible when the data had to be = hand-=20 gathered in person from individual clerk=92s offices.=94 =

        The=20 consequence of each of these developments can be better targeting = of=20 financial products to individual consumers, which can lower prices = and=20 improve service. However, these trends also may increase the risks = of=20 illegal, discriminatory, or invasive uses of highly sensitive = personal=20 information. Included among the concerns raised by the State = Attorneys=20 General and privacy advocates are:

Identity = Theft. More=20 widespread availability of information such as Social Security = numbers,=20 credit card numbers, and other personal identifiers create greater = opportunities for unscrupulous individuals to commit identity = theft.=20

Predatory = Lending.=20 Greater sharing of information within and among financial = institutions=20 could lead to an increase in the use of such information by = unscrupulous=20 lenders. For example, marketers engaged in predatory lending may = use this=20 information to target especially vulnerable debtors. Although = limiting=20 access to detailed personal information in bankruptcy filings will = not by=20 itself eliminate predatory lending practices, it is one step that = can be=20 taken to address this problem.

        4(b)=20         Special = Privacy=20 Interests of Debtors in Bankruptcy

        Beyond=20 these general financial privacy concerns, the bankruptcy process = raises=20 some particular issues involving the handling of financial = information.=20 Much of the data available to the general public from a bankruptcy = proceeding generally is not readily available from other sources. = This=20 includes: bank account numbers and funds in those accounts; Social = Security numbers; market value of real property; market value of=20 automobiles; employment income; cash on hand; alimony and other = support=20 due; alimony and other support owed; account numbers with = creditors and=20 amount owed to creditors; and medical expenditures, among other=20 information. Although credit reporting agencies currently are = permitted to=20 provide some financial information to private entities and = individuals,=20 they are subject to specific regulations and penalties for = improper=20 disclosure. The comprehensive nature of the information required = in=20 bankruptcy proceedings, and the fact that such information is = often=20 restricted in other contexts, suggests that there may be reasons = to=20 reconsider the current system, which allows unrestricted access to = such=20 data by the general public.

        In=20 addition, debtors in bankruptcy face a combination of two = circumstances=20 that may make them particularly vulnerable to misuse of data = available=20 about them. First, debtors in bankruptcy are by definition facing=20 extraordinary financial difficulties. Many end up in the = bankruptcy system=20 in order to relieve pressure from collection agents and others who = threaten to repossess homes and other real property. As noted in a = recent=20 joint report of the Treasury Department and the Department of = Housing and=20 Urban Development, such consumers often are targeted for credit = offers on=20 unfavorable terms, exacerbating a cycle of financial trouble. (58)=20 Second, once a debtor enters bankruptcy, he or she cannot receive = a=20 bankruptcy discharge for another seven years under Chapter 7, or = three=20 years under Chapter 13. Consequently, if an individual coming out = of=20 bankruptcy falls victim to a predatory practice and lands once = again in=20 financial difficulty, he or she will have no recourse to the = bankruptcy=20 system to protect basic assets such as a home.

5.=20         MODELS = FOR=20 BALANCING PRIVACY AND ACCESS

        5(a) &nb= sp;      =20 Introduction =96 Case-by-Case Determinations

         In=20 determining how the competing interests in access to information = and=20 protection of personal financial information may be balanced in = the=20 consumer bankruptcy process, it is helpful to compare the approach = embodied in current bankruptcy law to approaches used in other = contexts.=20

       The=20 federal bankruptcy statutes and case law under them reflect a = case-by-case=20 approach to balancing access by the general public and protection = of=20 personal financial information, with that balance weighted heavily = in=20 favor of access for the general public and parties in interest, = except as=20 to =93scandalous or defamatory=94 information. Under common law in = non-bankruptcy cases, there is a presumption that court records = are open=20 to the public, though courts exercise discretion in balancing = interests in=20 access by the general public and individual privacy interests, and = may=20 seal records or grant protective orders upon the showing of a = compelling=20 interest. (59)=20 Similarly, with respect to federal executive branch records, the = courts=20 use a balancing test under the Freedom of Information Act to weigh = individuals=92 interests in preventing =93clearly unwarranted = invasions of=20 personal privacy=94 from the disclosure of personal information in = government records, versus the general public=92s interest in = access to=20 records in order to shed light on the workings of the government. = (60)

        5(b)=20         Rules Based = Models=20

        As=20 an alternative to calling on the courts or others to determine = whether=20 personal information should be disclosed or kept private, one = could also=20 use a =93rules-based approach,=94 which would generally apply = across the=20 board. Each of the following models for balancing access by the = general=20 public and the debtor=92s privacy can be viewed on a continuum = from a fully=20 open to a full closed system of information management. Although = there are=20 many differences in the particulars of such sets of rules, they = usually=20 combine elements of three basic conceptual models, which restrict = access=20 by the general public to information based upon: 1) the content of = the=20 information; 2) the identity of the recipient of the information; = or 3)=20 the recipient=92s intended use of =96 or ability to use =96 the = information.=20

        This=20 section briefly describes these three conceptual models for access = and=20 gives examples of how they are reflected in particular statutes or = rules.=20 It then outlines a set of generally recognized =93fair information = principles=94 that may provide additional guidelines for the = implementation=20 of any of these models. Finally, it illustrates how the access = models and=20 fair information principles are combined in practice into hybrid=20 approaches that achieve a balance between the protection of = personal=20 information and access appropriate to a particular situation. =

        Limits=20 on Access to Information Based on the Content of the=20 Information

        One=20 approach to protecting personal information is to limit access by = the=20 general public based on the content of the information. Some types = of=20 information may be considered more sensitive than others because = of the=20 consequences that may result from disclosure of the information. = For=20 instance, disclosure of personal health information or genetic = information=20 may result in inappropriate discrimination against an individual = in credit=20 or employment decisions. Disclosure of certain personal = identifiers or=20 financial account information, such as an individual=92s Social = Security=20 number, may facilitate identity theft.

        The=20 Administration has recognized a number of categories of sensitive=20 information and has taken steps to establish enhanced protections = in these=20 areas, including: consumer financial information, Social Security = numbers,=20 individual health information, and information collected from = children on=20 the Internet. There are several federal laws that incorporate = enhanced=20 privacy protections for these categories of information. The=20 Administration has also proposed additional protections for = personal=20 information held by financial institutions. For instance: =

=95        The=20 GLBA, which generally allows financial institutions to share = consumers=92=20 personal financial information with non-affiliated companies under = specified conditions, places stricter limits on sharing of account = numbers=20 and account codes for a consumer=92s transaction = accounts.

=95        The=20 President=92s proposed Consumer Financial Privacy Act (introduced = in both=20 the House and Senate in May of 2000) would amend the GLBA to = impose=20 stricter limits on financial institutions=92 disclosure of = consumers=92 health=20 information and information about a consumer=92s personal spending = habits. (61)

=95        The=20 Children=92s Online Privacy Protection Act limits the = circumstances in which=20 web-site operators may collect personally identifiable information = from=20 children on the Internet.^{=20
(62)}

=95        The=20 Driver=92s Privacy Protection Act of 1994 (DPPA), which limits the = extent to=20 which state departments of motor vehicles may disclose information = about=20 individuals in motor vehicle records, places stricter limits on = disclosure=20 of an individual=92s photograph or image, Social Security number, = and=20 medical or disability information than on other personal = information=20 contained in such records. (63)

        Limits=20 on Access to Information Based on the Identity of the=20 Recipient

        Another=20 approach to protecting personal information is to limit the = categories of=20 entities eligible to receive the information. A particular = industry,=20 market, or activity may be structured in a manner that makes=20 identity-based distinctions feasible or desirable. The current = bankruptcy=20 system, with its distinction between =93parties in interest=94 and = all other=20 private individuals and entities, illustrates how such divisions = can be=20 made in statute or regulation. A clear example is provided by the = GLBA,=20 which limits the conditions under which a financial institution = may=20 disclose consumers' personal financial information to entities = that are=20 not affiliated with the financial institution. Disclosures of such = information to affiliated companies, in contrast, are not = restricted. (64)

        Most=20 federal laws that limit access by recipient also explicitly limit = the=20 purpose for which recipients may use the information, as discussed = in the=20 next section. Even where a law does not impose an explicit purpose = limitation on the recipients, there may be an implicit limitation = on how=20 they use the information, based on other laws that govern their = conduct.(65)

        Limits=20 on Access to Information Based on a Recipient=92s Use of the = Information=20

        Another=20 method for protecting the debtor=92s privacy interests in personal = information is to restrict the purposes for which the information = may be=20 disclosed to another entity and/or the purposes for which the = information=20 may be re-used and re-disclosed by recipients. There are several = federal=20 laws governing the use, collection, or disclosure of personal = information=20 that reflect this approach to some degree. These = include:

=95        The=20 Privacy Act of 1974, which generally permits a federal agency to = collect, use, and disseminate only such information about an = individual=20 as is relevant and necessary to accomplish a purpose of the = agency set=20 forth in a statute or Executive Order.=20 (66)

=95        The=20 GLBA, which specifies certain purposes for which financial = institutions=20 may disclose consumer=92s personal financial information to = non-affiliates=20 without a consumer=92s permission, and the purposes for which = such=20 information may be re-disclosed. (67)

=95        The=20 Right to Financial Privacy Act, which identifies the purposes = for which=20 a federal agency may obtain an individual=92s financial records = from a=20 financial institution without following certain procedures = specified in=20 the statute. (68)

=95        The=20 DPPA, which specifies the permissible purposes for which state=20 departments of motor vehicles may disclose information about = individuals=20 in motor vehicle records to any person or entity, as well as the = permissible purposes of any resale or re-disclosure of the=20 information.(69)

=95        The=20 FCRA, which specifies the permissible purposes for which = consumer=20 reporting agencies may sell individual=92s credit reports to = other=20 entities. (70)

Although these = laws address=20 bodies of information created for a variety of different = purposes, they=20 all generally allow the use or disclosure of information for one = or more=20 of the following purposes:(71)
^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=95        law=20 enforcement/legal compliance
=95        use=20 in judicial proceedings
=95=20        fraud=20 prevention
=95        protection= =20 of public or individual safety
=95        research

        In=20 sum, statutes based on the purpose limitation model establish a = general=20 rule prohibiting or placing conditions on the collection, use, or=20 disclosure of personal information, except where those activities = are done=20 for one or more purposes specified in the statute.

        5(c)&n= bsp;       =20 Fair Information Principles

        As=20 noted above, =93fair information principles=94 (FIPs) do not = provide a=20 rationale for the dissemination of particular types of information = to=20 particular groups. However, once policymakers have decided which = entities=20 have a right to receive which information, FIPs provide important = guidance=20 for implementing privacy policies in a manner that is consistent = and=20 transparent. FIPs first were articulated in a Health, Education, = and=20 Welfare Commission report on privacy in 1973. In 1980, the = Organization=20 for Economic Cooperation and Development also established = requirements for=20 protecting privacy built around a comprehensive set of FIPs. As = discussed=20 in the next section, several existing statutory schemes governing=20 repositories of personal information incorporate one or more of = these=20 principles, which are:

=95=20         Notice - = Entities=20 collecting personal data from individuals should provide them = notice about=20 what uses will be made of that information and/or for what=20 purpose.

=95=20         Limitation on=20 Collection - Entities should limit the data they collect to = what is=20 necessary to their purpose.

=95        =20 Limitation on Use - Entities should not disclose data for = purposes=20 other than those specified, except as authorized by law. =

=95=20         Choice - = Entities=20 should provide, where appropriate, choice as to how their = information will=20 be used and/or disclosed, particularly when the information is = being used=20 or disclosed beyond the stated purpose of the information=20 collection.

=95=20         Access -=20 Individuals should have reasonable access to the information that = entities=20 hold about them. They also should have the right to request = correction or=20 deletion of incorrect information.

=95=20         Security - = Entities=20 should ensure that the personal data they collect is secure from=20 unauthorized access and disclosure. This includes not only network = security, but also physical security of data (e.g., locked = cabinets where=20 appropriate) and personnel security (e.g., limiting access to = personnel=20 whose functions require such access).

=95=20 =         Accountability -=20 There should be an enforcement or other mechanism to ensure that = entities=20 are held accountable for complying with these = principles.

        5(d)=20         Hybrid = Models=20

        Existing=20 federal laws that govern collection, maintenance, and disclosure = of=20 databases of personal information usually are hybrids of the = various=20 models discussed above. As a starting point, these laws often = specify a=20 category of information to which special requirements =96 such as = access=20 limitations and security standards =96 will apply. The limitations = on=20 private entities=92 access to the information may include one or = more of the=20 FIPs, such as requiring notice and choice for an individual before = his=20 personal information is disclosed, as well as limitations on the = use of=20 the information, once disclosed. Existing laws also may = incorporate other=20 FIPs, such as the right for consumers to review their information = and have=20 errors corrected. In addition, existing federal laws governing = collection,=20 use, and disclosure of personal information usually include = mechanisms for=20 ensuring the accountability of those who maintain the databases at = issue,=20 through regulatory enforcement and/or private rights of action.=20

        For=20 example, the GLBA and the FCRA each reflect a combination of these = approaches: as with many other statutes governing privacy, GLBA = includes=20 an exception to access and re-use restrictions to allow = information to be=20 shared for law enforcement and other governmental purposes, when = statutory=20 standards have been met; (72)=20 and FCRA similarly allows the protected information to be shared = for law=20 enforcement and governmental purposes.

GLBA =

Type of = Information=20 Covered:

        Personally=20 identifiable financial information about a consumer, other than = publicly=20 available information, held by the consumer's financial = institution=20
         Any list, description, or = other=20 grouping of consumers (and the publicly available information = pertaining=20 to them, such as their addresses) that is derived using any = personally=20 identifiable financial information that is not publicly = available, such=20 as account numbers

Eligible = Recipients/Notice=20 & Choice:

        A=20 financial institution may disclose a consumer's information = to:=20

=95        any = affiliated company
=95        any = non-affiliated company, provided the consumer receives notice = of=20 thedisclosure and does not opt out

=95        Non-affili= ated=20 companies may re-disclose the information to other = non-affiliated=20 companies described in the notice given to the consumer=20

Purpose = Limitations:=20

        A=20 financial institution may disclose a consumer's information to=20 non-affiliated companies without the consumer's permission for = purposes=20 such as:=20

        to=20 effect, administer, or enforce a transaction authorized by a = consumer=20
        to=20 protect the confidentiality or security of the financial = institution's=20 records
        to=20 protect against or prevent actual or potential fraud, = unauthorized=20 transactions, claims, or other liability

        =20 Entities that = receive=20 information for one of the permissible purposes specified above=20 generally may re-disclose or re-use the information only to = carry out=20 the activity for which the disclosure initially was made =

Security:

        Financial=20 institutions are required to ensure the security, integrity, and = confidentiality of customer records

Accountability:

        Federal=20 financial regulators may take a range of enforcement actions, = including=20 cease-and- desist orders, restitution orders, and civil money = penalties,=20 against institutions that fail to comply with the consumer = financial=20 privacy requirements of the GLBA

FCRA =

Type of = Information=20 Covered:

        Consumer=20 report information -- i.e., personal data bearing on an = individual=92s=20 credit worthiness, credit standing, credit capacity, character, = general=20 reputation, personal characteristics, or mode of living, where = the=20 information is collected or communicated to be used to make=20 determinations about the individual, such as eligibility for = credit,=20 insurance, employment, or for other purposes permitted by the=20 FCRA

Eligible = Recipients:=20

        Consumer reporting = agencies may=20 provide consumer reports to entities that intend to use the = information=20 for a permissible purpose

Purpose = Limitations:=20

Permissible = purposes for the=20 disclosure of consumer reports include:

        In=20 response to a court order or grand jury subpoena
        In accordance with the = written=20 instructions of the consumer who is the subject of the = report=20
         For child support = collection=20 purposes, if requested by an appropriate state or local agency =
        For specified business = purposes,=20 such as:

        in connection with a = credit=20 transaction or insurance underwriting involving the = individual=20
        to determine the = individual=92s=20 eligibility for a license or other government benefit
        in=20 connection with an offer of credit or insurance to individuals = meeting=20 specified criteria
        in other specified = circumstances=20 involving a legitimate business need in connection with a = transaction=20 initiated by the consumer

Individuals=92 = Access and=20 Correction Rights:

        An individual may obtain a = copy of=20 the information in his or her file at a consumer reporting = agency and=20 may dispute the accuracy and completeness of the information=20

Security: =

        Consumer=20 reporting agencies must have procedures to verify the identities = of=20 recipients of consumer reports and the permissible purposes for = which=20 the reports will be used

Accountability:=20

        The FCRA provides for = enforcement by=20 federal agencies and the States, and permits private rights of = action by=20 consumers

        The=20 relative complexity of the various requirements of the GLBA and = the FCRA=20 demonstrates the challenge of accommodating the interests of all = parties=20 that may have a stake in how various types of personal information = are=20 collected, maintained, and disseminated. These laws also make = clear that=20 different approaches and combinations of approaches may be = appropriate in=20 different contexts. This is particularly the case where a database = contains a number of different types of information, some of which = may be=20 more sensitive than others.

        The=20 personal information about a debtor collected and aggregated in = the course=20 of a consumer bankruptcy proceeding may be one of the most = comprehensive=20 databases of information ever created about the debtor. Moreover, = as=20 discussed above, there may be a large number of competing = individual and=20 institutional interests in access to and security for that = database.=20 Consequently, it seems clear that some combination of the models = discussed=20 above, as well as other new approaches tailored to the needs of = the=20 bankruptcy process, will be needed in balancing individual privacy = interests and rights of access to information in the bankruptcy = context.=20

6.=20 =         CONCLUSIONS

        This=20 chapter details a series of findings and recommendations regarding = the=20 privacy- access balance for the bankruptcy process.

        (a)=20 =         Findings

        6(a)(i)        =20 Access to Information is Necessary for Case = Administration

The rights of = parties in=20 interest and the fair and efficient administration of cases = require that=20 certain personal information be available to the courts, parties = in=20 interest, and governmental entities. Creditors, trustees, = creditors=92 and=20 debtors=92 attorneys, other parties in interest, and governmental = entities=20 often need detailed financial information about debtors in order = to=20 efficiently carry out their respective functions.

        6(a)(ii)        =20 Access to Information is Necessary to Ensure = Accountability

        Ensuring=20 public accountability and preventing abuses of the bankruptcy = system=20 require that some personal information filed in bankruptcy cases = be=20 available to the general public. In the bankruptcy context, = accountability=20 includes the public=92s policing of debtors=92 use of the system, = as well as=20 evaluating how the system is working overall. As with the = administration=20 of justice more generally, public access to some personal = information is=20 necessary so that the press, oversight organizations, and others = can=20 assure accountability.

        6(a)(iii)<= /B>        Debtors=20 Have A Privacy Interest in Certain Highly Sensitive Information=20

        Certain=20 personal information collected in bankruptcy proceedings is highly = sensitive and is protected from access by the general public in = other=20 contexts by financial privacy laws. Individual debtors have a = privacy=20 interest in such information that is not expressly recognized in = the=20 current bankruptcy system. The increasing ease of electronic = access to=20 this information is heightening debtors=92 interests in ensuring = that this=20 information is protected.

        6(a)(iv)        =20 Storage of Personal Information in Government Electronic Systems = Poses New=20 Privacy Concerns

        Information=20 held by government, including the judicial branch, increasingly is = being=20 collected, stored, and transmitted electronically. While the use = of=20 electronic systems by the government provides better service to = users,=20 more efficient processing of transactions, and a host of other = benefits=20 for the American people, there is a corresponding need to = safeguard the=20 privacy of personal information that is electronically compiled = and=20 transmitted to private entities. Because electronic systems create = the=20 capability to release greater amounts of personal information to = more=20 remote and anonymous users, the shift to electronic systems will = sometimes=20 require additional protections in order to avoid a large increase = in the=20 actual level of disclosure of personal information.

        6(b)=20 =            = Recommendations=20 (73)

        6(b)(i)=20         Balance = Interests=20 in Efficiency, Government Accountability, and = Privacy

The Study = Agencies=20 recommend that the goal of protecting personal financial = information be=20 given increased emphasis in the bankruptcy system. Bankruptcy=20 information policy should better balance society=92s interests = in fair and=20 efficient case administration, bankruptcy system integrity, = government=20 accountability, and the debtor=92s privacy. As electronic tools = for=20 accessing case information develop and improve, there is an = increased=20 need for analysis of access issues to ensure the integrity and = proper=20 administration of the system.

        Upon=20 filing for bankruptcy, a debtor gets the immediate relief of the = automatic=20 stay that precludes virtually all collection actions against him = or her,=20 and the prospect of a discharge of any further obligation to repay = his or=20 her debts. In order to obtain such relief, however, the debtor = must make=20 detailed disclosures of his or her personal financial information = at the=20 commencement of the case, or soon thereafter. The bankruptcy = system=20 currently treats the debtor=92s personal financial information as = =93open=20 record=94 information that is generally available to the public. = While this=20 approach well serves the important functions of fair and efficient = case=20 administration and accountability in government, it may not = provide=20 adequate protection of personal financial information.

        The=20 growing use of computer technology and electronic communications = will have=20 an impact on debtors=92 privacy interests in the personal = information they=20 provide in the bankruptcy process. Prior to recent technological = advances,=20 information provided by individuals in bankruptcy was accessible = only by=20 requesting a copy of the debtor=92s schedules from the court, or = by=20 reviewing the bankruptcy file at the court. However, the = proliferation of=20 electronic technology now allows, or will soon allow, myriad = private=20 entities or individuals to obtain unmediated and widespread access = to an=20 individual=92s most sensitive information. With the widespread use = of the=20 Internet, almost anyone can anonymously obtain the most personal = details=20 of an individual=92s life without limitation on how the = information is used.=20

        The=20 Study Agencies believe that debtors should not be required to = forego=20 reasonable personal privacy protections and expose themselves=20 unnecessarily to risk in order to obtain the protections of = bankruptcy.=20 Rather, there should be a balance between debtors=92 interests and = other=20 needs of the bankruptcy system.

        The=20 recommendation for balancing of interests in the bankruptcy = process is=20 supported by the following public comments:

=95        Mary=20 Jo Obee, Chief Deputy Clerk of the U.S. Bankruptcy Court of the = Western=20 District of Oklahoma, commented that unlimited access to = bankruptcy=20 information: (1) harms privacy rights by providing greater access = than=20 necessary to achieve the public benefit; (2) limits the fresh = start by=20 placing a stigma on debtors; (3) contributes unnecessarily to = threats of=20 physical harm to parties; (4) contributes unnecessarily to = identity theft,=20 credit fraud and lender redlining; and (5) under new technology, = may=20 hinder individuals from seeking redress under the bankruptcy=20 laws.

=95        The=20 Federal Trade Commission commented that concern regarding the = availability=20 of sensitive information is heightened with the increasing = availability on=20 the Internet of courts=92 public record data.

=95        The=20 Privacy Rights Clearing House commented that with the widespread = use of=20 the Internet, almost anyone can anonymously obtain access to the = most=20 personal details of an individual=92s life without limitation on = how the=20 information is used.

=95        The=20 Center for Democracy and Technology commented that if computerized = systems=20 are designed without an eye towards protecting privacy, they can = enlarge=20 existing privacy loopholes and present unique challenges to = protecting=20 privacy.

=95        The=20 New Jersey League - Community and Savings Bankers commented that = it=20 supports efforts that properly balance the legitimate information = sharing=20 needs of a creditor with the obligations to protect consumer = privacy.=20

        6(b)(ii)=20         The General = Public=20 Should Have Access to Core Information

The Study = Agencies=20 recommend that the general public continue to have access to = some=20 general information so that the public can hold the bankruptcy = system=20 accountable. This information includes the fact that an = individual has=20 filed for bankruptcy, the type of bankruptcy proceeding, the = identities=20 of parties in interest, and other core information. =

At the same = time, the=20 Study Agencies recommend that the general public not have access = to=20 certain highly sensitive information that poses substantial = privacy=20 risks to the debtor. This information may include, among other = items:=20 Social Security numbers, credit card numbers, loan accounts, = dates of=20 birth, and bank account numbers. Similarly, the Study Agencies = recommend=20 that schedules that show detailed profiles of personal spending = habits=20 and debtors=92 medical information be removed from the public = record.=20

Finally, the = Study=20 Agencies recommend that special attention be given to protecting = information regarding entities or individuals who are not = parties to the=20 bankruptcy proceeding. This includes detailed personal and = financial=20 information regarding non-filing spouses, relatives, or business = partners.

        Bankruptcy=20 cases are different from other civil litigation. (74)=20 For example, the schedules that are required to be filed early in = a=20 bankruptcy case include information that far surpasses the notice = standard=20 of traditional civil litigation. Bankruptcy cases try to = anticipate all=20 financial information that a creditor would need to evaluate its = rights=20 against the debtor, and requires the debtor to provide that = information.=20

        Certain=20 general information in the bankruptcy system should remain = available to=20 the general public in order to allow members of the press, = oversight=20 organizations, and others to monitor the functioning of the = executive=20 branch (e.g., United States Trustee Program), private trustees, = and the=20 courts in bankruptcy cases. General information that falls into = this=20 category includes, among other data items: the fact that an = individual has=20 filed for bankruptcy; the type of bankruptcy proceeding; the = identities of=20 parties in interest; and other core information necessary to serve = the=20 accountability function.

        The=20 Study Agencies believe that an appropriate balance can be achieved = if the=20 process provides general public access to the core information = while=20 limiting access and use of sensitive information to parties in = interest=20 and for governmental purposes. The Study Agencies believe in = promoting=20 public accountability, but are concerned that unlimited general = public=20 access to bankruptcy=20 information may harm debtor privacy rights by providing greater = access to=20 private entities than necessary to achieve a public benefit while=20 contributing unnecessarily to identity theft, threats of physical = harm,=20 credit fraud, and lender redlining and individual profiling. That = concern=20 is heightened with the increasing availability on the Internet of = Social=20 Security numbers, credit card numbers, bank account numbers, loan = account=20 numbers, dates of birth, and other sensitive personal information. =

        The=20 risk of identity theft and predatory lending practices may be = increased by=20 the disclosure of schedules that show the profiles of personal = spending=20 habits, medical information, Social Security numbers, credit card = numbers,=20 loan account numbers, dates of birth, and bank account numbers. = The FTC=20 identified common forms of identity theft as: taking over an = existing=20 credit card account; taking out loans in another person=92s name; = writing=20 fraudulent checks using another person=92s name and/or account = number; and=20 opening a telephone or wireless service account in another = person=92s name.=20 In extreme cases, an identity thief may completely take over a = victim=92s=20 identity, including being arrested in the victim=92s name. =

        Several=20 credit card companies commented that such personal identifiers = must=20 continue to be publicly available so that all entities can = determine=20 whether a particular bankruptcy relates to a specific individual. = However,=20 the bulk of the public comments supported restricting access by = the=20 general public to highly sensitive information. The needs of the = credit=20 card industry and other parties in interest are accommodated in=20 Recommendation 6(b)(iii) below. The following public comments = supported=20 these recommendations:

=95        Mary=20 Jo Obee, Chief Deputy Clerk of the U.S. Bankruptcy Court of the = Western=20 District of Oklahoma, and others commented that =A7107 of the = Bankruptcy=20 Code may need to be revisited, and that consideration should be = given to=20 defining public data and non- public data clearly. Only limited = general=20 case information should remain public, although access for parties = in=20 interest would remain unchanged.

=95        The=20 Center for Democracy and Technology commented that an effective=20 information policy should protect the rights of the individuals = who=20 participate in the bankruptcy system by limiting the use and = disclosure of=20 their personal information to that necessary to support the = bankruptcy=20 process. General information about the debtor may need to be = available to=20 the public to ensure that all those with a stake in the outcome = may=20 participate. However, detailed information, currently considered = public=20 records under =A7 107 of the Bankruptcy Code, such as bank account = numbers,=20 credit card account numbers, Social Security numbers, and bank = balances=20 are not necessary to ensure that parties with an interest are = notified of=20 a debtor=92s filing. Also, public disclosure of such information = breaches=20 personal privacy and places individuals at risk of additional = financial=20 harm.

=95        The=20 Federal Trade Commission, an agency mandated to establish the = federal=20 government=92s centralized depository for identity theft = complaints,=20 commented that disclosure of non- public data, as with public = data, may=20 facilitate identity theft and other illegal conduct. The FTC also=20 commented that finance-related fraud constitutes 80 percent of the = identity theft crimes reported to it.

=95        The=20 Privacy Rights Clearinghouse commented that if bankruptcy and = trustee=20 files are available online to the general public, they should be = available=20 in the form of a =93digest=94 of the key data elements. Personal = identifiers,=20 such as Social Security numbers, represent a gold mine to = dishonest=20 individuals as well as to the rising number of organized criminal=20 enterprises that specialize in systematic identity theft. Such = scams not=20 only victimize the debtor, but the bankruptcy courts as well by = clogging=20 the system with fraudulent filings.

=95        The=20 National Association of Consumer Bankruptcy Attorneys commented = that given=20 the broad dissemination of public record information, debtors are = entitled=20 to have their information protected from unnecessary=20 disclosure.

=95        Several=20 financial associations and information service providers commented = that=20 certain personal information should be available in bankruptcy = cases to=20 protect the rights of parties in interest and debtors, but that = the=20 information made available to the public should be limited to = general=20 information that promotes public accountability.

=95        The=20 New Jersey Credit Union League commented that making sensitive = information=20 available on the Internet would expose debtors, who are already in = precarious financial positions, to an enhanced risk of identity = theft, and=20 that this unintended result outweighs any possible = benefits.

        6(b)(iii)<= /B>        =20 Parties in Interest Should Continue to Have Access to a Broad = Range of=20 Non-Public Information, Subject to Re-use and Re-disclosure = Limitations.=20

The Study = Agencies=20 recommend that parties in interest and potential parties in = interest=20 have access to a broad range of information collected in = bankruptcy=20 proceedings in order to exercise their rights and = responsibilities.=20

However, when = private=20 entities have such access, they should generally be prohibited = from=20 reusing or re-disclosing the information for purposes unrelated = to=20 administering bankruptcy cases. These re-use and re-disclosure=20 limitations should not be construed as restricting private = entities from=20 sharing information with governmental entities.

The Study = Agencies also=20 recommend that the detailed information that appears in a = bankruptcy=20 filing should be available to researchers in a manner that would = not=20 identify individuals.

The report=92s = recommendations are not intended to address the access or use of = bankruptcy information by governmental entities in connection = with their=20 important public responsibilities, or the communication of = personal=20 financial information by or to governmental entities for = functions they=20 serve.

        Creditors,=20 parties in interest and their agents, law enforcement, or other=20 governmental entities =96 but not the general public =96 should = continue to=20 have access to the full range of information necessary to = administer=20 cases, subject to re-use and re-disclosure limitations. It is = essential=20 for parties in interest to have broad access to comprehensive = debtor=20 information in order to: (a) determine whether entities are = entitled to=20 recovery before their contractual rights are forever terminated; = (b)=20 participate effectively in the bankruptcy process; (c) ascertain = the=20 accuracy of debtors=92 claims; and (d) communicate efficiently = with trustees=20 about bankruptcy cases. When private entities have such access, = however,=20 the Study Agencies propose that they generally be prohibited from = reusing=20 or re-disclosing the information for purposes unrelated to = administering=20 bankruptcy cases. However, these prohibitions do not include = re-disclosing=20 information to law enforcement or for other governmental=20 purposes.

        Court=20 officials, including private trustees, who have responsibility for = administering bankruptcy cases, need full access to comprehensive = debtor=20 information for all cases coming under their purview, subject to=20 appropriate re-use and re-disclosure restrictions.

        As=20 for the creditor community, an entity that believes that it is a = party in=20 interest in a bankruptcy case should, perhaps upon adequate = showing, have=20 access to information sufficient to determine whether it has an = interest=20 in the case. However, under the Study Agencies=92 recommended use = and=20 disclosure limitations, if the private party determined not to = file a=20 claim in that case, it would be prohibited from using or = disclosing the=20 data for any purpose, with exceptions for disclosure to law = enforcement or=20 other governmental entities.

        Agents=20 of parties in interest necessarily will need to collect and make = available=20 in an efficient manner a wide range of information from many = cases. It is=20 important that these activities also be subject to re-use and=20 re-disclosure restrictions that protect debtors=92 privacy = interests. As=20 noted, one of the recognized =93fair information practices=94 = provides that=20 data only be used and disclosed to advance the purpose for which = it was=20 collected. As described above, several existing systems outside of = bankruptcy adopt this principle and impose re-use and re- = disclosure=20 limitations.

        Limitations=20 on re-disclosure of bankruptcy information by private entities = will=20 supplement existing statutes governing financial privacy, such as = the=20 FCRA, which may not reach all entities involved in the collection = and=20 redistribution of this information. The protections of the FCRA = are=20 limited to =93consumer reporting agencies=94 and those of GLBA are = limited to=20 =93financial institutions.=94 However, entities may become = involved in the=20 collection and dissemination of financial information without = falling=20 within either of these categories. The recommended limitations on=20 re-disclosure of sensitive bankruptcy information by private = entities will=20 help close any statutory gap.

        The=20 Study Agencies separately recommend that detailed information that = appears=20 in a bankruptcy filing be available to researchers on a = de-identified=20 basis. This approach protects the debtor=92s privacy while = assisting public=20 and private entities in understanding various aspects of the = bankruptcy=20 system and in making or considering policy decisions about the = bankruptcy=20 system. Notably, the lack of such information was pointed out = during the=20 recent debate on bankruptcy reform in the 106th Congress. =

        An=20 additional recommendation concerns the special needs of law = enforcement.=20 Law enforcement officials throughout the country often use public = record=20 information =96 including bankruptcy information =96 to assist in = their=20 investigations. Public records can help to locate individuals, = identify=20 assets, verify personal relationships, and otherwise further = enforcement=20 efforts. The Study Agencies recommend that as decision makers = craft=20 information policy on non-public information, they do so in a way = that=20 does not infringe upon the current ability of governmental = entities to=20 gain access and use of this information.

        Although=20 a few public commenters supported allowing bankruptcy data to be = collected=20 and distributed by third parties, most of the comments were = opposed to the=20 commercial use and/or non-bankruptcy related use of private debtor = information. The following public comments supported these=20 recommendations:

=95        The=20 FTC suggested that commercial use of highly personal and sensitive = data=20 should be prohibited for several reasons. First, such disclosure = may=20 facilitate identity theft or other illegal conduct. Second, = trustees=20 receive sensitive private information as a result of governmental = action,=20 and the use of non-public information for commercial purposes = appears to=20 be outside the scope of their responsibilities. Third, the = commercial use=20 of debtor information conflicts with the trustees=92 fiduciary = duties and=20 responsibilities, and the Department of Justice=92s policy = prohibiting=20 trustee=92s from using estate funds for their personal benefit. = Finally, the=20 commercial sale of debtor information may implicate concerns under = the=20 FCRA.

=95        The=20 National Association of Attorneys General commented that due to = the=20 protections afforded in bankruptcy, it is important that = information be=20 widely available to parties in interest. However, measures should = be=20 established regarding the appropriate uses of bankruptcy = information, and=20 there should be restrictions on the release of data that is = particularly=20 susceptible to abuse, with penalties for any misuse of=20 information.

=95        The=20 National Association of Consumer Bankruptcy Attorneys commented = that=20 debtors should not be required to forego any expectation of = privacy,=20 except to the extent that their information is necessary to the=20 administration of the bankruptcy process. All possible precautions = and=20 protections should be implemented to preclude any unwarranted = disclosure=20 of personal information.

=95        The=20 Ohio Credit Union League commented that bankruptcy information = should be=20 categorized as public or non-public and as to who may have access. = There=20 should be restrictions on and penalties for the use and disclosure = of=20 non-public information.

=95        The=20 Center for Democracy and Technology commented that there may be = legitimate=20 public interest considerations for providing aggregate reports, = stripped=20 of information that may identify specific individuals, on = debtors=92=20 interactions with the bankruptcy system and creditors.

        6(b)(iv) = ;       =20 Incorporate Fair Information Principles.

The Study = Agencies=20 recommend that the bankruptcy system incorporate fair = information=20 principles of notice, consent, access, security and = accountability.=20

Notice: The=20 Study Agencies recommend that debtors who file for bankruptcy be = informed in writing that certain information that they disclose = in their=20 petitions and schedules may be disclosed to the general public = and that,=20 consistent with current law, all information may be disclosed to = parties=20 in interest, law enforcement and other governmental entities.=20

        Current=20 bankruptcy laws and rules do not make explicit provision for a = debtor to=20 receive notice of the potential use and distribution of the = personal=20 information he must submit to the court in the course of a = bankruptcy=20 case. The Study Agencies believe that many individuals may not be = aware=20 that their personal information will be made widely available to = the=20 general public.

        Debtors=20 could be provided with adequate notice regarding the collection = and=20 dissemination of their information by several methods. For = example, notice=20 could be provided directly on the petition and schedules that a = debtor=20 must file. Notice also could be provided through counseling with a = debtor=92s attorney.

        Several=20 public commenters stated that debtors should relinquish their = right to=20 privacy in exchange for the protections afforded by the bankruptcy = process. However, most of the comments supported the concept that=20 bankruptcy incorporate fair information principles, including = providing=20 debtors with adequate notification. The following public comments=20 supported these recommendations:

=95=20         Many of the public = comments noted that debtors are generally fearful of and = unfamiliar with=20 the bankruptcy process, and do not envision that their files may = be=20 available for review by any member of the public.

=95        Mary=20 Jo Obee, Chief Deputy Clerk of the U.S. Bankruptcy Court of the = Western=20 District of Oklahoma, commented that generally individuals have no = idea=20 that anyone other than those listed on their schedules, the = trustee, and=20 the courts will ever see their information.

=95        The=20 FTC commented that because certain information necessarily must be = put on=20 the public record during a bankruptcy case, consideration should = be given=20 to ensuring that debtors are given notification as soon as = possible in the=20 bankruptcy process as to how their information will be used and = whether=20 and how it will be disclosed. Individuals cannot fully understand = the=20 consequences of pursuing relief from their debts unless they are = informed=20 of the consequences and the extent and means by which their = personal and=20 financial information will be divulged to parties in interest and = the=20 general public.

=95        Several=20 commenters suggested that debtors=92 attorneys should be required = to explain=20 the potential loss of privacy when advising their clients as to = whether=20 bankruptcy is an appropriate course of action.

Consent:=20 The Study Agencies recommend that debtors=92 affirmative = voluntary consent=20 be required in order for creditors, trustees, other parties in = interest,=20 and their agents to re-use or re-disclose information reported = in the=20 bankruptcy process for purposes unrelated to administering a = particular=20 case, except for re-use and re- disclosure of information to law = enforcement or other governmental entities. =

        This=20 recommendation is based on the assumption that consent is implied = for uses=20 of data by private entities related to the bankruptcy process and = that=20 explicit consent is required for unrelated uses by private = entities. The=20 voluntariness of consent is quite important =96 individuals should = not be=20 coerced into providing their consent for such transfers. This=20 recommendation was supported by most of the public commenters. =

        Several=20 federal laws provide relevant frameworks for consent requirements = for the=20 re-use and re-disclosure of non-public information by private = entities.=20 For example, the GLBA provides for certain allowable uses and = disclosures=20 of financial information. Beyond those uses, consumers must be = provided an=20 opportunity to object to the disclosure of their personal = information to=20 non-affiliated entities. The FCRA also allows disclosure for = certain=20 =93permissible purposes.=94 Beyond those, disclosure may occur = only with the=20 consent of the consumer. These re-use and re-disclosure = limitations,=20 however, should not restrict private entities from sharing = information=20 with governmental entities.

Access:=20 The Study Agencies recommend that individual debtors = have the=20 right to reasonable access of their file, and the right to = challenge the=20 accuracy of information it contains. =

        Fair=20 information principles provide that individuals should have = reasonable=20 access to the information about them maintained by private = entities.=20 Further, in instances where their information is used to = facilitate=20 decisions about them, individuals should have the right to request = correction of that information.

        In=20 a related context, the FCRA assures the accuracy of personal = information=20 by providing consumers with the ability to discover whether = adverse=20 information is in their files, inspect that information, and = demand that=20 all inaccuracies be corrected in a timely manner.

Security:=20 The Study Agencies recommend that adequate security standards be = in=20 place for private entity access to all information flows in the=20 bankruptcy system.

        The=20 Study Agencies believe that there should be mechanisms to minimize = the=20 risk that unauthorized entities gain access to information that = could=20 compromise the personal financial information of the debtor, or = the=20 integrity of the data. Accordingly, measures should be established = and=20 implemented to ensure that only authorized users have access to = non-public=20 information and that re-disclosure limitations are followed. The=20 development and implementation of security standards are = particularly=20 important in the new networked environment. Therefore, if a new = privacy=20 protection structure is established, special emphasis should be = placed on=20 limiting access by private entities, through proper security = standards, to=20 certain sensitive data, such as Social Security numbers and other = personal=20 identifiers.

        This=20 recommendation was supported by several public comments, = including:=20

=95        The=20 Center for Democracy and Technology recommends that the entity = collecting=20 the data be required to secure the information it maintains. Not = only does=20 the emergence of advanced information systems promote access to = government=20 records, but also highlights the weaknesses in the handling of = personal=20 information contained in bankruptcy records.

=95        The=20 Credit Union National Association commented that if bankruptcy = information=20 is made available electronically, it may be acceptable to secure = the=20 information by use of passwords.

Accountability: The=20 Study Agencies recommend the development of mechanisms to ensure = that=20 private entities engaging in improper use or re-use of a = debtor=92s=20 personal financial information are held accountable for their=20 actions.

        Fair information principles = provide=20 that there should be an enforcement or other mechanism to ensure = that=20 private entities are held accountable for noncompliance with the = standards=20 regarding notification, use and disclosure, consent, access, and = security=20 of information. The accountability mechanism for bankruptcy = records should=20 be designed to ensure that private entities that violate the fair=20 information principles are held accountable by legal remedies,=20 disciplinary action, or other effective mechanisms.

        The=20 principle of accountability was supported by most of the public=20 commenters, including:

=95        The=20 Ohio Credit Union League commented that there should be disclosure = restrictions on, and penalties for the misuse of, information = deemed to be=20 non-public information in the bankruptcy process.

FOOTNOTES

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 1.=20 For the purposes of this report, the term "private entities" = includes the=20 general public, parties in interest, and other non-governmental = entities,=20 but does not refer to private bankruptcy trustees appointed under = Title 28=20 U.S.C. =A7 586(a) or to governmental entities, including law = enforcement and=20 regulatory agencies.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 2.=20 The term "access" often is used by the privacy community to denote = an=20 individual's access to his or her own records. In this report, = however,=20 the Study Agencies use the term "access" to refer more broadly to = anyone's=20 access to an individual's records, including access by the general = public=20 or a limited category of individuals or entities, as evident from = the=20 context of a particular discussion.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 3.=20 See Federal Register Notice Requesting Public Comment on Financial = Privacy=20 and Bankruptcy, 65 Fed. Reg. 46735 (July 31, 2000). Available at=20 http://www.usdoj.gov/ust/privacy/privacy.htm.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 4.=20 The Study Agencies recognize that bankruptcy information often can = be=20 obtained not only from data contained in court files, but also, = for=20 example., from observation of bankruptcy proceedings and from = materials=20 filed with the court in connection with dispositive motions -- in = which=20 case the information may form, in part, the basis for a court's=20 adjudication. These alternative ways in which information may be = disclosed=20 in bankruptcy proceedings present somewhat different privacy = concerns and=20 may raise significant common-law access and First Amendment = questions that=20 typically are not as pronounced in a case where the records are = not used=20 as a specific basis for adjudication. This report does not address = those=20 questions, nor possible First Amendment issues that could arise if = there=20 were undue restrictions on the public and the media in accessing=20 bankruptcy case information.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 5.=20 See Administrative Office of the U.S. Courts Press Release: = Judiciary=20 Seeks Public Comment on Internet Access to Court Documents = (November 13,=20 2000). Available at http://www.privacy.uscourts.gov/Press.htm. =

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 6.=20 See, e.g., Privacy Act, 5 U.S.C. =A7 552a(b)(7); = Gramm-Leach-Bliley Act,=20 Pub. L. No. 106-102, 113 Stat 1338, 1438 (1999) (15 U.S.C. =A7 = 6802(e)(5)).=20

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 7.=20 11 U.S.C. =A7 701.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 8.=20 Fed. R. Bankr. Proc. 3002(c).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}<=
/SUP>}}}}}}}}= = 9.=20 11 U.S.C. =A7 1302.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}10.=20 28 U.S.C. =A7 586(b).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}11.=20 11 U.S.C. =A7 1302.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}12.=20 Fed. R. Bankr. Proc. 3002(c).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}13.=20 11 U.S.C. =A7=A7 1321, 1322.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}14.=20 11 U.S.C. =A7 343.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}15.=20 11 U.S.C. =A7=A7 1324, 1325.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}16.=20 11 U.S.C. =A7 1326(a)(1).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}17.=20 11 U.S.C. =A7 1326(a)(2).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}18.=20 11 U.S.C. =A7 1328(a).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}19.=20 11 U.S.C. =A7 1328(a).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}20.=20 28 U.S.C. =A7 1408.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}21.=20 11 U.S.C. =A7 521(1).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}22.=20 See Official Form 1. The specific information required on the = bankruptcy=20 petition, related schedules, and statement of financial affairs is = included in Ap= pendix=20 II.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}23.=20 11 U.S.C. =A7 727(a).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}24.=20 18 U.S.C. =A7 152 (imposing criminal sanctions on persons who = knowingly and=20 fraudulently give false information, withhold information, conceal = property, or present a false proof of claim in connection with a=20 bankruptcy case).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}25.=20 Official Bankruptcy Form 16B (Short title) modifies the definition = of the=20 title of the case in Rule 1005 for many documents.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}26.=20 11 U.S.C. =A7 107(a). As discussed further below, =A7 107(b) = provides for=20 certain exceptions to this general rule.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}27.=20 H.R. Rep. No. 595, 95th Cong., 1st Sess. 317-318 (1977); S. Rep. = No. 989,=20 95th Cong, 2d Sess. 30 (1978).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}28.=20 See generally Mark D. Bloom, et al., Reorganizing in a Fish Bowl: = Public=20 Access vs. Protecting Confidential Information, 73 Am. Bankr. L. = Rev. 775=20 (Fall 1999); William T. Bodoh & Michelle M. Morgan, Protective = Orders=20 in the Bankruptcy Court: The Congressional Mandate of Bankruptcy = Code=20 Section 107 and its Constitutional Implications, 24 Hastings = Const. L. Q.=20 67, 76-81 (Fall 1996).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}29.=20 See In re Orion Pictures Corporation, 21 F.3d 24, 27 (2d Cir. = 1994); In re=20 In re Phar-Mor, Inc., 191 B.R. 675, 679 (Bankr. N.D. Ohio=20 1995).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}30.=20 See, e.g., United States v. McVeigh, 119 F.3d 806, 811 (10th Cir. = 1997);=20 United States v. Amodeo, 71 F.3d. 1044, 1047-50 (2d Cir. = 1995).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}31.=20 11 U.S.C. =A7 704(7).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}32.=20 18 U.S.C. =A7 154.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}33.=20 2 Collier on Bankruptcy, &107.03[2] (Matthew Bender 15th Ed. = Revised).=20

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}34.=20 See 2 Collier on Bankruptcy, &107.03[1] (Matthew Bender 15th = Ed.=20 Revised); Krause v. Rhodes, 671 F.2d 212, 219 (6th Cir. 1982); In = re=20 Halkin, 598 F.2d 176 (D.C. Cir. 1979); Ad Hoc Protective Committee = for 10%=20 Debenture Holders v. Itel Corp. (In re Itel Corp.), 17 B.R. 942 = (B.A.P.=20 9th Cir. 1982).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}35.=20 See In re Ionosphere Clubs, Inc., 156 B.R. 414, 433 (S.D.N.Y. = 1993); In re=20 Continental Airlines, 150 B.R. 334, 339-341 (D. Del. = 1993).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}36.=20 15 U.S.C. =A7=A7 1681 et seq.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}37.=20 See 15 U.S.C. =A7 1681a(d)(1). These permissible purposes are = limited to=20 situations where the consumer report is: (1) provided in response = to a=20 court order or grand jury subpoena; (2) made pursuant to the = consumer's=20 written instructions; (3) used in connection with a credit = transaction,=20 insurance underwriting or other transaction initiated by the = consumer,=20 such as leasing an apartment if there is a legitimate business = need for=20 the report; or (4) used for employment purposes. A report may also = be=20 provided when the consumer has applied for a government benefit, = when the=20 user intends to offer credit or insurance to consumers meeting = specified=20 criteria, or in specified circumstances involving a legitimate = business=20 need (such as to review an account to determine if the consumer = continues=20 to meet the terms of the account). See 15 U.S.C. =A7 = 1681b(a).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}38.=20 See GLBA, tit. V, 113 Stat. 1436-1445 (15 U.S.C. =A7 6801 et=20 seq.).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}39.=20 Under subtitle A of title V of the GLBA, a financial institution = generally=20 is any banking institution, securities entity (such as a = broker-dealer,=20 mutual fund, or investment adviser), or insurance company, as well = as any=20 other business that engages in activities that are financial in = nature=20 under section 4(k) of the Bank Holding Company Act of 1956. See 15 = U.S.C.=20 =A7 6809(3); 12 U.S.C. =A7 1843(k).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}40.=20 Under the GLBA, a consumer is an individual who obtains from a = financial=20 institution financial products or services to be used primarily = for=20 personal, family, or household purposes. See GLBA sec. 509(9) (15 = U.S.C. =A7=20 6809(9)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}41.=20 The FCRA, however, requires financial institutions to give = individuals=20 notice and the opportunity to block the sharing of certain = information=20 among affiliated companies. See 15 U.S.C. =A7=20 1681a(d)(2)(A)(iii).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}42.=20 The federal regulators for the various categories of financial=20 institutions subject to the GLBA have issued comparable = implementing=20 regulations that require full compliance beginning July 1, 2001. = See 65=20 Fed. Reg. 35161 (June 1, 2000) (Federal Reserve Board, Federal = Deposit=20 Insurance Corporation, Office of the Comptroller of the Currency, = Office=20 of Thrift Supervision); 65 Fed. Reg. 40333 (June 29, 2000) = (Securities and=20 Exchange Commission); 65 Fed. Reg. 31721 (May 18, 2000) (National = Credit=20 Union Administration;) 65 Fed. Reg. 33645 (May 24, 2000) (Federal = Trade=20 Commission). Implementing regulations of the various State = insurance=20 regulators are still pending.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}43.=20 See GLBA secs. 502, 503 (15 U.S.C. =A7=A7 6802, 6803).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}44.=20 65 Fed. Reg. 35198 (June 1, 2000)(to be codified at 12 C.F.R. =A7=20 40.3(n)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}45.=20 A consumer's account numbers and access codes for credit card, = deposit,=20 and transaction accounts also are nonpublic personal information. = The GLBA=20 bars a financial institution from disclosing this type of = information to=20 non-affiliated companies for marketing purposes, except in certain = limited=20 circumstances. See 15 U.S.C. =A7 6802(d); See, e.g., 65 Fed. Reg. = 35203=20 (June 1, 2000) (to be codified at 12 C.F.R. =A7 40.12).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}46.=20 A customer relationship is a continuing relationship between a = consumer=20 and a financial institution under which the financial institution = provides=20 one or more products or services to the consumer that are to be = used=20 primarily for personal, family, or household purposes. See, e.g., = 65 Fed.=20 Reg. 35197 (June 1, 2000)(to be codified at 12 C.F.R. =A7=20 40.3(i)(1)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}47.=20 65 Fed. Reg. 35198 (June 1, 2000)(to be codified at 12 C.F.R. =A7=20 40.3(o)(2)(C)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}48.=20 See, e.g., 65 Fed. Reg. 35202 (June 1, 2000) (to be codified at 12 = C.F.R.=20 =A7 40.7(g)(1)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}49.=20 See, e.g., 65 Fed. Reg. 35202 (June 1, 2000) (to be codified at 12 = C.F.R.=20 =A7 40.7(g)(2)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}50.=20 See, e.g., 65 Fed. Reg. 35202 (June 1, 2000) (to be codified at 12 = C.F.R.=20 =A7 40.7(g)(2)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}51.=20 See GLBA sec. 509(4)(B) (15 U.S.C. =A7 6809(4)(B)). In some cases, = a=20 consumer's opt-out direction will apply to publicly available = information,=20 such as where it is made part of a list of consumers that is = derived from=20 nonpublic personal information. See, e.g., 65 Fed. Reg. 35198 = (June 1,=20 2000)(to be codified at 12 C.F.R. =A7 40.3(n)(2)(i)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}52.=20 See, e.g., 65 Fed. Reg. 35199 (June 1, 2000) (to be codified at 12 = C.F.R.=20 =A7 40.2(p)(1)(i)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}53.=20 11 U.S.C. =A7 107(a).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}54.=20 The one exception may be in the case of account numbers and = account codes=20 for a debtor's transaction accounts. The GLBA generally prohibits=20 financial institutions from disclosing this information to = nonaffiliated=20 companies for marketing purposes, without regard to whether the=20 information is publicly available. See 15 U.S.C. =A7 6802(d); See, = e.g.,65=20 Fed. Reg. 35203 (June 1, 2000) (to be codified at 12 C.F.R. =A7=20 40.12).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}55.=20 See 2 Collier on Bankruptcy, &107.01 (Matthew Bender 15th Ed.=20 Revised).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}56.=20 In re Continental Illinois Securities Litigation, 732 F.2d 1303, = 1308 (7th=20 Cir. 1984).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}57.=20 Republic of the Philippines v. Westinghouse Electric Corp., 949 = F.2d 653,=20 660 (3d Cir. 1991)

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}58.=20 See Curbing Predatory Home Mortgage Lending: A Joint Report, U.S.=20 Department of Housing and Urban Development and U.S. Department of = Treasury at 72 (June 2000).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}59.=20 See e.g., United States v. Beckham, 789 F.2d 401, 409-15 (6th Cir. = 1986)(trial court "must set forth substantial reasons for denying" = access=20 to its records).

60. 5=20 U.S.C. =A7552(b)(6); see U.S. Dept. of Justice v. Reporters = Committee for=20 Freedom of the Press, 489 U.S. 749, 772 (1989). In Reporters = Committee, a=20 case involving a database of information summarized in a criminal = "rap=20 sheet," the Supreme Court recognized a privacy interest in = information=20 that is publicly available through other means, but is = "practically=20 obscure." The Court specifically noted: the vast difference = between the=20 public records that might be found after a diligent search of = courthouse=20 files, county archives, and local police stations throughout the = country=20 and a computerized summary located in a single clearinghouse of=20 information. 489 U.S. at 764. In weighing the public interest in = releasing=20 personal information against the privacy interests of individuals, = the=20 Court identified a public interest in access to information that = would=20 "shed light on the conduct of any Government agency or official," = 489 U.S.=20 at 773, not information about a particular private citizen. The = Court also=20 noted "the fact that an event is not wholly private does not mean = that an=20 individual has no interest in limiting disclosure or dissemination = of the=20 information." 489 U.S. at 770.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}61.=20 See H.R. 4380, 106th Cong, 2d Sess. secs. 3, 4 (2000); S. 2513, = 106th=20 Cong, 2d Sess. secs. 3, 4 (2000).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}62.=20 See Pub. L. 105-277, div. C, title XIII, 112 Stat. 2681-728 (Oct. = 21,=20 1998).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}63.=20 See 18 U.S.C. 2721(a), (b) (as amended by Pub. L. No 106-346, sec. = 309=20 ___Stat. ___ (Oct. 23, 2000)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}64.=20 See GLBA secs. 502, 503 (15 U.S.C. =A7=A7 6802, 6803).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}65.=20 For example, where the recipient of personal information about an=20 individual is a fiduciary to the individual, the recipient likely = is=20 subject to a legal duty to refrain from appropriating the = information for=20 its own benefit.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}66.=20 See 5 U.S.C. =A7 552a(e)(1).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}67.=20 See 15 U.S.C. =A7 6802(b)(2), (e); see, e.g., 65 Fed. Reg. 35203, = 35204=20 (June 1, 2000) (to be codified at 12 C.F.R. =A7=A7 40.11, = 40.13).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}68.=20 See 12 U.S.C. =A7=A7 3402-3413.

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}69.=20 See 18 U.S.C. =A7 2721(a)-(c) (as amended by Pub. L. No 106-346, = sec. 309=20 ___Stat. ___ (Oct. 23, 2000)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}70.=20 See 15 U.S.C. =A7 1681b(a).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}71.=20 See 5 U.S.C. =A7 552a(b) (Privacy Act of 1974); 12 U.S.C. 3413 = (Right to=20 Financial Privacy Act); GLBA sec. 502(e) (to be codified at 15 = U.S.C. =A7=20 6802(e)); =A7 18 U.S.C. 2721(a), (b) (as amended by Pub. L. No = 106-346, sec.=20 309 ___Stat. ___ (Oct. 23, 2000))(DPPA); 15 U.S.C. =A7=A7 1681b, = 1681u=20 (FCRA).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}72.=20 See GLBA sec. 502(e)(5) (15 U.S.C. =A7 6802(e)(5)).

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}73.=20 The following recommendations are proposed to address issues of = access and=20 re-use of personal financial information in bankruptcy cases by = private=20 entities. They are not to be read to apply to access and use by=20 governmental entities, including law enforcement or regulatory = agencies,=20 or the communication of this information by or to these = governmental=20 entities. Governmental use and access is outside the scope of this = Study.=20

^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{<=
SUP>^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^{^<=
SUP>}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}}=}}}}}}}}74.=20 11 U.S.C. =A7 301; H. R. Rep. 95-595, 95th Cong., 1st Sess. 321 = (1977); S.=20 Rep. 95-989, 95th Cong., 2nd Sess. 31 (1978).

Page Last Updated on Mon., Feb.05, 2001
U.S. Trustee=20 Program/Department of Justice=20
usdoj/ust/ogc/ss

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