The House Financial Services Committee on Wednesday will mark up data security legislation that fails to address one major credit union priority—it does not set a strict consumer data breach notification standard for retailers.
Financial institution trade groups, including NAFCU and CUNA have said that merchants should have a breach notification requirement that is as strict as the one that banks, and credit unions have.
The bill, sponsored by Rep. Blaine Luetkemeyer (R-Mo.), would preempt state data breach requirements for financial institutions and would make consumer notification easier.
"Chairman Luetkemeyer's bill is a good first step, and it ensures all financial regulators establish uniform breach notification standards for all regulated financial entities similar to what is already in place for credit unions, while providing credit unions a clear preemption from state laws on data protection and notification standards," Brad Thaler, NAFCU's vice president of legislative affairs, said. "However, NAFCU will continue to work to ensure consumers are fully protected across the board, as we strongly support a universal data security standard covering merchants and retailers as well."
CUNA officials also said that they will continue to push for consumer notification requirements, but that the legislation is a welcome sign.
"This legislation is a positive step in the direction of supporting credit unions and consumers, and we thank Rep. Luetkemeyer for his leadership on this issue," said CUNA President/CEO Jim Nussle.
However, in the past, Republican members of the House Financial Services Committee pushed proposals that would include retailer data breach requirements. Members of the House Energy and Commerce Committee have opposed such proposals, resulting in a stalemate that stalled legislation.
On another front, some House Republicans are pushing new tax cut legislation, that would, among other things make many of last year's tax cuts permanent.
Notably, the package of three bills makes no changes to the credit union tax exemption.
"This latest tax reform legislation once again leaves the credit union tax status untouched, proving that the benefits not-for-profit financial cooperatives bring to the marketplace is recognized by policymakers on both sides of the aisle," CUNA President/CEO Jim Nussle said
While Congress is unlikely to pass any tax cut legislation this year, NAFCU officials have said they are monitoring developments to ensure that any proposed legislation does not have an impact on the credit union tax exemption.
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