Congress Works on Peripheral CU Issues in Lead Up to Memorial Day Recess

WASHINGTON-A number of congressional committees are considering data security legislation right now, which could be a formidable election year issue as breaches continue to occur.

The House Financial Services Committee was slated to mark up the Data Accountability and Trust Act (H.R. 4127), which is the bill originated by the Energy and Commerce Committee, last Wednesday. The so-called DATA bill competes with the Financial Services Committee's own bill, the Financial Data Protection Act (H.R. 3997), which is favored by the financial services industry. H.R. 3997 also includes certain rulemaking authorities for NCUA that the agency worked to get inserted.

In turn the Energy and Commerce Committee stripped the Financial Services Committee's language from H.R. 3997 and inserted its own language in a markup last Wednesday.

The DATA Act was then supposed to move to a markup last Thursday after deadline in the Judiciary Committee, which has also introduced its own data security legislation. The Cyber-Security Enhancement and Consumer Data Protection Act of 2006 (H.R. 5318), the bill initiated in the Judiciary Committee, was also scheduled to be marked up at that time.

Following the massive data loss at the Department of Veterans Affairs early last week that lost names, Social Security numbers and birthdates of 26.5 million veterans and some family members, the Veterans Affairs Committee scheduled a hearing on the issue for last Thursday as well.

In related news, the House Financial Services Committee also planned take up the Seasoned Customer CTR Exemption Act (H.R. 5341) for markup last Wednesday, and the Judiciary Committee was going to markup two Internet gambling bills, an issue credit unions have been keeping an eye on, last Thursday.

The same day, the Judiciary Committee was to markup the Internet Freedom and Nondiscrimination Act (H.R. 5417), sponsored by Jim Sensenbrenner (R-Wis.) and John Conyers (D-Mich.), which aims to ensure competitive and nondiscriminatory Internet access. Some have said without the legislation service providers could charge certain businesses more, raising the cost of providing online financial services and products for credit unions and banks. Telecommunications companies are claiming that businesses offering online services are reaping the benefit of their own investment for broadband services.

“The goal here is.you don't want to keep people from using the Internet. You don't want to take away trade. You don't want to take away business,” NAFCU Director of Political Affairs Murray Chanow commented.

Also, on May 23, the Senate Banking Committee held a hearing on improving financial literacy but no credit union representatives testified. NAFCU did write Chairman Richard Shelby (R-Ala.), commending him for holding the hearing. “As Americans are faced with an ever widening array of financial services, NAFCU believes it is important to arm consumers with a sound understanding of the basics of personal finance,” the letter read. “Financially literate individuals are more likely to spend prudently and put money in savings, retirement funds and other wealth building accounts. Conversely, the same individuals are less likely to rack up large, burdensome and sometimes unaffordable debt. Unfortunately, the nation's personal savings rate today is at record low levels. Improving financial literacy is a key step in turning this around.”

Another issue the Banking Committee is supposed to be working on is moving regulatory relief. CUNA Vice President for Legislative Affairs Dean Sagar said he had gotten “mixed signals” on when and how that will progress.

However, an informed source has said that the new hoopla over Fannie Mae's accounting irregularities has possibly opened the door for retiring House Financial Services Committee Chairman Mike Oxley (R-Ohio) to chair the conference committee on any legislation creating a new regulator for the government sponsored enterprises. He had been waiting to see if any other major legislation was going to get through before Congress adjourns prior to accepting chairing the conference committee on regulatory relief. Attention to the GSE overhaul legislation would distract from reg relief and increase the likelihood of the House accepting the Senate's pared-down version. Additionally, at least one objection has been raised informally to placing reg relief on the Senate calendar, complicating the matter further.

Congress will be in recess this week for the Memorial Day holiday.

-scooke@cutimes.com