The Federal Court of Appeals for the Ninth Circuit has dealt a blow to privacy advocates by invalidating a California privacy law. In litigation by the American Bankers Association and others, the appeals court overturned a trial judge’s decision that California law could be upheld. Instead, appellate magistrates found that the law was partially superseded by the federal Fair and Accurate Credit Transactions Act of 2003.

When a state law conflicts with a federal one, federal law takes precedence. For example, the Supreme Court has ruled that abortion is constitutionally protected. No state can pass anti-abortion laws and enforce them.

The question in question in California law was a section that gave California residents the right to prevent financial institutions from selling their private information to third parties.

A San Francisco trial judge, Morrison C. England, Jr., had ruled that the section conflicted with the provisions of the Fair and Accurate Credit Transactions Act, but was not superseded because federal law allowed state laws. strict. The Ninth Circuit court disagreed.

The case will be returned to Judge Morrison in the next 60 days. It will then determine whether any other provisions related to the sale of personal financial information still apply. Given the ruling on the appeal, it is difficult to imagine a ruling that upholds this section of California law.

Despite these developments, approximately seventy percent of California’s privacy law is still enforceable. The financial institution must still obtain customers’ permission before selling or sharing their information with third parties.

You should be concerned about financial institutions selling your private information to others. With all identity theft incidents in the news, chances are you will eventually become a target. Banks should focus on protecting their customers, not making money off private information.