Finland's Social Insurance Institution (Kela) will not be granted automatic access to the bank account information of social welfare applicants, if and when the new legislation is eventually approved, according to newspaper Helsingin Sanomat.
Last autumn reports began to emerge about government's plans to give public agencies the right to examine residents' bank details without having to ask permission from account holders or banks, ostensibly in a bid to curb money laundering.
On Tuesday Helsingin Sanomat reported (in Finnish) that Kela will not be granted as much reach as government initially planned.
Following a request from the constitutional committee, the finance committee has now re-worded the proposed legislation.
The new law, which is based on an EU money laundering directive, is expected to be approved by lawmakers later this week.
If it's approved, the law will compel banks to set up a searchable database of customer bank account details that authorities will be able to access themselves.
The EU's directive only calls for revealing the identity of account holders, their account numbers and beneficiaries.
The constitutional committee said the ministry's law proposal went beyond the scope of the EU directive, and would have granted Kela new, free access to people's account details.
The committee called on the ministry to remove the portions of the draft bill that overreached the directive.
The committee said banking information is sensitive, personal data protected by privacy laws, and that access to them must be carefully justified.
The committee criticised the proposal, saying it attempted to create a system that would give authorities access to personal details which are protected by bank privacy laws, without making provisions for adequate oversight.
Currently Kela is able to request bank statements from social support applicants, and if the agency is suspicious of activities like welfare abuse, it can ask banks for a client's account information directly.
Agencies like the tax authority, the Bankruptcy Ombudsman, Customs and agencies dealing with money laundering and foreclosures already have the right to request account details of residents directly from banks. The new law, if approved, will not affect these agencies' access to banking information, as each agency has independently received the right to such information.
In October Data Protection Ombudsman Reijo Aarnio warned that plans to expand agency access to people's banking data could pose a security threat.