SACRAMENTO, Calif. -
The data security bill began in the California State Assembly, which approved it June 5 by an overwhelming, 55-2 vote.
The legislation is supported by the California Credit Union League and is opposed by the California Bankers Association and other groups.
The CCUL said the bill "addresses three deficiencies the credit union movement sees" in California's existing data breach notification law. First, the CCUL said the new law would result in better securitization of financial data retained by retailers.
Second, consumers would receive more information on data breaches.
Third, financial institutions can receive reimbursement for the cost of notifying consumers if the breach was not the fault of the institution.
Currently, the CCUL pointed out, credit unions not only incur a financial charge for notifying members of a data breach, they also take the member relations hit even if they are not at fault.
California is not alone in exploring ways to protect consumers from data breaches and the attendant identity theft resulting from them. Lawmakers in a variety of states have been taking up the issue.
Additionally, Congress is looking at devising legislation of its own that would offer federal protections, though Capitol Hill observers have suggested that such a bill likely won't make it through this session.
