House Committee Advances Data Security Legislation

The House Financial Services Committee voted 46-9 Dec. 8 in favor of the Data Security Act of 2015 (H.R. 2205).

The measure now advances to the House Energy and Commerce Committee, which marked up its own data security bill earlier this year. It is unclear if either of the bills will move forward or how they might be merged. 

NATSO strongly opposes H.R. 2205, which imposes data security standards for retailers, because it would unnecessarily impose a variety of complicated and expensive obligations on the retail sector.

The measure is strongly favored by the banking community.

One section of the legislation, for example, would apply the so-called Safeguards Rule to retailers, including travel center operators. The Safeguards Rule was written more than 15 years ago for the financial services industry for complex products like home mortgages, auto loans, and insurance products. It is designed to ensure that financial entities keep their customers' personal information secure. It makes little sense to impose these rules on unrelated retail sectors that do not handle and control such sensitive information.   

The legislation also would require retailers to notify their customers in the event of a data breach even if the data breach occurs through no fault of the retailer and the retailer has no reasonable means of contacting all of the affected customers.

Another provision would require any employee that touches "sensitive account information," including credit or debit cards, to first pass a background check.  This would subject tens of millions of frontline employees (such as those operating a cash register, waiters and waitresses at restaurants, etc.) to background checks. 

NATSO will continue to actively oppose this legislation. 


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