SACRAMENTO, Calif. -
"Business costs were cited, but it hard to tell the real motivations for the veto," Bob Arnould, the CCUL's executive vice president of government affairs, told the Credit Union Journal, "The bill would not have raised costs unfairly. What is not fair is 40% of retailers have gone out and updated their security, while 60% of retailers are data security scofflaws. Yes, it costs money to update data security, but if businesses don't, they put personal information in the hands of identity thieves."
The bill began in the California Assembly and eventually passed both the state Assembly and Senate by large margins. The legislation was opposed by the California Bankers Association and other groups, including retailers. The CCUL said the bill would have addressed three deficiencies CUs see in California's existing data breach notification law.
According to Arnould, all is not lost. He noted bi-partisan support for the bill in both houses in the face of strong opposition, and an increase in awareness. "We advanced the issue a long way and set up ourselves for victory down the road. You don't get through without a compelling document, it just didn't fit into the governor's timetable," he said. "Prior to this bill, no one in the media or among elected officials understood where the problem was. Now it is out there in the public domain-people know where the data breaches take place."
Keri Bailey, a lobbyist for the CCUL, told the Credit Union Journal, "It really is a rule, rather than the exception," to have a complex issue such as responsibility for the security of consumers' data require at least a year or two to become law. No one gave us a shot to get through the Assembly, much less through the Assembly and the Senate and all the way to the governor's desk with the bill pretty much intact in the first year of a two-year session."
Added Arnould, "There were 21 powerful organizations opposed to this bill, including retailers and bankers. The insurance industry was against it at first, but went to the sidelines. It was pretty much credit unions against the world. You don't take on those kinds of organizations without a powerful argument."
The CCUL, he said, is urging other leagues to attack the data breach issue in their own states. "The legislature comes back in session in 60 days and we'll be ready for them. We'll be back!" quipped Arnould in his best "Terminator" voice.
