WASHINGTON (4/16/15)--The U.S. House Energy and Commerce Committee passed the Data Security and Breach Notification Act of 2015 (H.R. 1770) Wednesday by a 29-20 vote, a bill that CUNA and other financial services organizations say "falls short of adequately protecting consumers."

In a letter sent to the committee prior to the bill's markup, CUNA and the other trades outlined essential principles for strong data protection legislation.

"CUNA opposes this bill because it still leaves consumers unprotected from breaches that occur in merchants' systems," said Sam Whitfield, CUNA's deputy chief advocacy officer.

The bill would require certain entities that collect and maintain personal information to secure such information and provide notice to individuals if the information is breached or exposed.

CUNA and the trades previously weighed in on the bill last month, when it was a discussion draft. The discussion draft version and the version passed by the committee Wednesday both fall short of what is needed to protect consumers, CUNA believes.

According to CUNA, strong data breach legislation should entail:

• Strong national data protection and consumer notification standards, coupled with effective enforcement provisions. CUNA believes the standard in H.R. 1770, which calls for "reasonable security measures" should be strengthened;
   
• Recognition of the data protection standard financial institutions face under the Gramm-Leach-Bliley Act. CUNA urges the committee to ensure that entities already covered by these standards are not subject to dual and perhaps inconsistent regulations;
   
• Ensure the party responsible for the breach bears the costs associated with the breach. CUNA would like to see a section of H.R. 1770 modified with language stating this; and
   
• A strong federal standard that preempts inconsistent state laws and regulations that deal with data protection and consumer notification. H.R. 1770 does not accomplish this.

CUNA and the trades believe the above issues must be addressed before the bill is brought to the House floor.