The bill would expand federal data privacy legislation with the goal to provide consistent consumer protection and guidance for regulated entities.
02/06/2023 1:40 P.M.
2.5 minute read
The House Financial Services Committee Subcommittee on Financial Institutions and Monetary Policy will review a discussion draft of a financial data privacy bill from U.S. Rep. Patrick McHenry, R-N.C., during a hearing Feb. 8.
McHenry’s legislation expands the scope of the Gramm-Leach-Bliley Act to include new data rules and is one of his priorities as chair of the House Financial Services Committee, ACA International previously reported.
The Feb. 8 hearing, “Revamping and Revitalizing Banking in the 21st Century,” will include the draft legislation. McHenry’s goal is to hold a full committee markup for the bill at the end of February.
“Technology has fundamentally changed the way consumers participate in our financial system—increasing access and inclusion. It has also increased the amount of sensitive data shared with service providers,” McHenry said in a news release. “Our privacy laws—especially as they relate to financial data—must keep up. This proposal will modernize the current framework to better align with evolving technology and protect against the misuse or overuse of consumers’ personal information. I look forward to continuing to work with my colleagues on this discussion draft to secure Americans’ privacy without strangling innovation.”
Key Components of the Data Privacy Discussion Draft:
- This bill updates the GLBA to better align with the changing technological environment. New trends in technology have modernized the financial system and how consumers connect with financial institutions, including nonbank institutions. The consumer protections in the bill will easily fit with future innovation and technologies.
- The bill requires companies to share with consumers why they are collecting certain personal information and that they only use the information for the stated purposes. Companies required to comply with the bill must provide consumers with the option to stop the data collection if it is not needed in connection with a product or service.
- Privacy terms and conditions must be transparent and easy for a consumer to understand.
- The bill will create a national standard to provide consistency for other entities collecting and using consumers’ personal data and therefore reduce compliance burdens for those entities.
The hearing including the discussion draft is at 10 a.m. EDT Wednesday, Feb. 8.
Several other bill proposals will also be discussed.
Witnesses for the hearing include:
- Jim Reuter, CEO, FirstBank, on behalf of the American Bankers Association.
- Penny Lee, CEO, Financial Technology Association.
- John Berlau, Senior Fellow and Director of Finance Policy, Competitive Enterprise Institute.
- Brian Knight, Senior Research Fellow, Director of Innovation and Governance, Mercatus Center at George Mason University
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