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House committee okays data breach bill
WASHINGTON (10/1/09)—The House Energy and Commerce Committee Wednesday passed the Data Accountability and Trust Act (H.R. 2221) by voice vote. The bill would require businesses to notify affected customers when outside parties gain access to sensitive information due to a security breach. The Credit Union National Association (CUNA) has called the bill “well-intentioned,” but has expressed concerns to lawmakers that its does not adequately address the notification issue. In a letter to the committee, CUNA President/CEO Dan Mica said pointed out that the entities that have experienced data breaches in recent years do not typically have the necessary contact information to reach the individuals whose accounts may have been compromised. However, he added, the financial institutions of affected accountholders certainly do. Mica said CUNA backs language to state that breach notification would to be done by the financial institutions of the affected accountholders at the expense of the entity that has lost the data. “Credit unions currently do this at their own expense for members when they are notified of breaches by the merchant or card associations. They have the contact information, but should be compensated for the expense caused by the data breach,” Mica wrote. He added, “Further, we would encourage you to include language that permits the financial institutions to disclose the source of the breach or loss to affected accountholders. “Without being able to disclose the source, credit unions are exposed to reputation risk—the loss of confidence in the credit union by the members—in addition to actual monetary costs.”


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