Congress Taking Action to Protect Data Security

by King & Spalding
Contact

In the wake of major customer data breaches at Target and Neiman Marcus, lawmakers on Capitol Hill have quickly swung into action, scheduling a slew of hearings and introducing legislation designed to address the issue of data security to better protect Americans' personal information and ensure their privacy.

On January 8, Senate Judiciary Chairman Patrick Leahy (D-VT) and four other Senate Democrats introduced the Personal Data Privacy and Security Act of 2014. The legislation, which Leahy has introduced every Congress since 2005, would create a national standard for data breach notification and require businesses to keep the consumer information they collect safe from hackers. The bill would also toughen criminal penalties for those who conceal a damaging breach, require companies that keep data to establish safety policies and update penalties for computer hacking attempts.

The legislation further defines "sensitive personally identifiable information" to include: (1) specified combinations of data elements in electronic or digital form, such as an individual's name, home address or telephone number, mother's maiden name, and date of birth; (2) a non-truncated social security number, driver's license number, passport number, or government-issued unique identification number; (3) unique biometric data; (4) a unique account identifier; and (5) any security code, access code, password, or secure code that could be used to generate such codes or passwords.

Leahy's aim was to create a balance between the need for clear and meaningful punishment, with the need to encourage innovation and protect privacy and civil liberties. Leahy stated that the recent data breach at Target is "a reminder that developing a comprehensive national strategy to protect data privacy and cybersecurity remains one of the most challenging and important issues facing our Nation." The Senate Judiciary Committee has scheduled a hearing on data breaches for February 4 that will focus on "privacy in the digital age," including how to prevent data breaches and combat cybercrime.

One week after Leahy introduced his bill, Senate Homeland Security and Government Affairs Committee Chairman Senator Tom Carper (D-DE) and Republican Senator Roy Blunt (R-MO) introduced the Data Security Act of 2014. The bipartisan legislation is intended to help protect consumers from identity theft and account fraud and is designed to establish clear and consistent rules of the road nationally for public and private institutions to follow to prevent and respond to data breaches.

The bill would require entities including financial institutions, retailers, and federal agencies to better safeguard sensitive information, investigate security breaches, and notify consumers when there is a substantial risk of identity theft or account fraud. The proposed requirements would apply to all businesses that take credit or debit card information, data brokers that compile private information, and government agencies that possess nonpublic personal information.

The Data Security Act marks another federal attempt to protect consumers by replacing the current patchwork of state laws with a single set of national standards. Currently, 49 states and U.S. territories have enacted laws governing data security and data breach notification standards. Inconsistent and conflicting state-by-state standards force public and private entities to comply with multiple regulations, leaving many consumers in a confusing web of regulation depending on the state. This legislation would provide clarity and certainty to all parties involved.

Under the proposed legislation, if the financial establishment, retailer, federal agency or other entity determines that sensitive information was compromised or may have been compromised, the entity is required to investigate the scope of the breach, the type of information compromised or potentially compromised, and determine whether the information will likely be used to cause an individual harm or bank fraud. If it is determined that the information was compromised and will cause harm, the entity must then notify the appropriate federal government regulatory agency, law enforcement, national consumer reporting agencies and all consumers affected by the breach.

The Data Security Act of 2014 is modeled after the data security and breach-response regime established under the Gramm-Leach-Bliley Act of 1999 and subsequent regulations. It builds on existing law to better ensure data security procedures are uniformly applied. Three Democratic members of the Senate Banking Committee have urged Chairman Tim Johnson (D-SD) and ranking member Mike Crapo (R-ID) to hold a hearing on how companies can better protect themselves against data breaches.

Lastly, in addition legislative proposals, House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) agreed to a request made by Rep. John Tierney (D-MA) to investigate criminal groups attempting to hack the federal Health Insurance Exchange website, healthcare.gov, in order to steal consumer information. Rep. Tierney, Ranking Member of the Subcommittee on National Security, suggested that the Committee spend more time investigating the criminal activities of domestic hackers, foreign entities, and others seeking to gain access to the personal information of American consumers instead of spending so much time criticizing federal officials charged with protecting the website. Chairman Issa agreed, stating that cybersecurity is part of the Committee's core jurisdiction and that it is an area of not only interest but one that he is willing to put time into. Chairman Issa stated that we can "count on there being a series of briefings and possible Committee hearings" on the issue.

- J.C. Boggs, Lauren M. Donoghue

 

Written by:

King & Spalding
Contact
more
less

King & Spalding on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!