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.