A recent amendment to the financial modernization bill regarding consumer privacy has put the government-sponsored enterprises at odds with consumer groups in the mortgage industry.

The amendment was sponsored by U.S. Rep. Spencer Bachus (R., Ala.), and later re-amended by U.S. Rep. Edward Markey (D., Mass.). It stated that those financial institutions having direct relationships with consumers could not sell or transfer database information to nonaffiliated third parties without first sending out an annual notice to its database members informing them of the company's privacy policy. The institutions also must give those customers a choice to opt out if the information was to be sold or transferred.

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