‘Carve Out’ For CUs Sought InNew Data Bill

WASHINGTON - (03/30/06) – The credit union lobby wasworking Wednesday to carve out an exemption for credit unions andbanks from a host of new requirements that would be part of a newsecurity bill. NAFCU helped convince Rep. Vito Focella, R-N.Y., topropose the credit union carve out, then agree to withdraw theproposal after the House Commerce Committee to consider the carveout before passing it on to full House for a vote. The Commercepanel passed a bill Wednesday quite different from a data securitymeasure approved by the Financial Services Committee two weeks ago.The Commerce bill would create a number of new securityrequirements over users and brokers of personal information,including requiring them to verify the accuracy of the informationthey collect; require regular monitoring for data breaches; allowconsumers annual access to records maintained on them by databrokers as well as the right to have inaccurate informationcorrected or labeled as disputed; and set up the Federal TradeCommission as the ultimate rulemaking authority on data security.It would also change the threshold for consumer notification of adata breach from significant risk of identity theft to reasonablerisk of identity theft to the individual to whom the personalinformation relates, fraud or other unlawful conduct. NAFCUlobbyist Debbie Kwan-Moore, said they believe that credit unionsand other financial institutions are already monitored on theseissues under the Gramm-Leach Bliley Act, so should be exempted frommany of the proposed requirements. “We plan to work withRepresentative Fosella and (Rep.) Cliff Stearns (the bill’smain sponsor) to try and work out some kind of agreement before thefull House votes on it,” she told The Credit UnionJournal.