Financial Sector Data Breach Bill Wins House Panel Approval

The House Financial Services Committee Sept. 13 approved a bill that would codify existing standards and create a national data breach notification standard for the financial sector, including insurers.

The bill (H.R. 6743) by Rep. Blaine Luetkemeyer (R-Mo.), would amend the Gramm-Leach-Bliley Act to codify existing breach notice standards and require that all financial entities notify consumers of a data breach. The measure would also preempt state law for institutions covered under the landmark financial services law.

The committee approved the bill on a 32-20 vote, after adopting a substitute amendment that would require financial regulators to establish breach notice standards within six months of enactment of the measure for the institutions under their jurisdiction.

Push for Broader Bill

Financial trade organizations voiced support for the bill in a Sept. 12 joint letter to the committee.

The groups, including the American Bankers Association, the Consumer Bankers Association, and the Credit Union National Association, said they backed committee action on the bill as a step toward comprehensive data breach legislation for all entities that collect and use sensitive personal and financial information.

In a separate letter, CUNA said Sept. 11 that Congress should consider legislation that holds “merchants to the same standards as financial institutions and gives the Federal Trade Commission and state attorneys general the authority to enforce this standard.”

Luetkemeyer said in a Sept. 14 statement after the committee approved his bill that “it is going to take better cooperation from all my colleagues and the industries that handle consumer data in order to advance additional meaningful changes.”

“At some point there will be another major breach, and without a comprehensive solution our constituents will pay the price for our inaction,” he said.

The Conference of State Bank Supervisors, a group representing state financial regulators said in a Sept. 12 letter to the committee that Luetkemeyer’s bill would undermine state consumer protections.

— With assistance from Catherine Moran

To contact the reporter on this story: Sara Merken in Washington at smerken@bloomberglaw.com

To contact the editor responsible for this story: Barbara Yuill at byuill@bloomberglaw.com