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| Supporting comprehensive Data Privacy, Security Legislation |
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The House Financial Services Committee is holding a hearing today on needed updates to America’s financial privacy network. In advance of the hearing, America’s Credit Unions outlined needed principles to incorporate in a comprehensive federal data privacy framework. This includes robust security standards that apply to all who collect or hold sensitive personal data.
“We recognize that the financial services landscape is evolving. It is important that, as the law evolves to match it, credit unions have clear rules of the road that allow them to meet the needs of their members in the marketplace,” the comment letter reads. “This includes a data privacy standard that not only protects their members but also allows credit unions to evolve in how they serve their members.”
Credit unions and other financial institutions are currently subject to the Gramm-Leach-Bliley Act (GLBA), which should remain the model for depository institution compliance with any future federal security and privacy standard.
The following principles should be part of any new comprehensive federal data privacy law:
• Recognize the applicability of GLBA standards to financial institutions and the rigor of existing financial institution compliance activities;
• Delegate authority to appropriate regulators;
• Preempt the conflicting patchwork of state laws;
• Offer a safe harbor for businesses that take the appropriate steps to comply with the law; and
• Protect against frivolous lawsuits created by a private right of action.
The hearing will feature a discussion of draft legislation. Concerns the committee plans to address include recognizing that financial institutions already comply with comprehensive GLBA data privacy standards, preempting state laws, and directing regulators to consider burdens on small institutions.
However, America’s Credit Unions requests the committee work “to ensure that the bill strikes the appropriate balance in terms of protecting consumer privacy while affording small community financial institutions a tailored and flexible regulatory framework that does not impose unreasonable operational burdens.”
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