ST. PAUL, Minn., and AUSTIN, Texas -- Credit union backed data security legislation was signed into law in Minnesota as a similar bill withered on the vine in Texas.
Minnesota Governor Tim Pawlenty (R) signed the Plastic Card Security Act (H.F. 1758/S.F. 1574) into law, making Minnesota the first state in the nation to pass legislation that shifts the costs associated with data security breaches from financial institutions to the retailers who are not appropriately safeguarding the data. The measure overwhelmingly passed both houses of the state legislature.
"We are pleased that the Governor and members of the state legislature understand the problems associated with financial security and the need for this legislation," Minnesota Credit Union Network Director of Governmental Affairs Mara Humphrey said. "Our ultimate goal is to prevent breaches from happening, thus reducing the risk of fraud for credit unions."
In addition to providing for reimbursement, the new law will prohibit the storage of magnetic stripe data, PIN numbers, and the three-digit security code from the back of credit or debit cards after completing transactions. This section of the bill takes effect on Aug. 1, 2007.
"The passage of this bill was our number one priority this legislative session, and it is a great victory for credit unions across the state of Minnesota..." MnCUN President/CEO Mark Cummins said. "Plastic card security is an issue that affects millions of Minnesotans and consumers from across the nation, and we hope that other states are able to build on this momentum."
The Texas Credit Union League was not so successful in its push for similar legislation. The bill (H.B. 3222) was unable to make it out of the Senate Business and Commerce Committee after passing the House 139-0 with two voting present. The bill was left pending in committee as its business came to a close May 17, but the league has said it will continue its push.