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The House Financial Services Committee holds a markup today and is set to consider a bill – the Financial Data Privacy Act (H.R. 1165) – from Chairman Patrick McHenry, R-N.C., to amend the Gramm-Leach-Bliley Act (GLBA) as it relates to data privacy. Ahead of the markup, NAFCU Vice President of Legislative Affairs Brad Thaler outlined areas of support and potential improvement within the bill.

“The GLBA has successfully served consumers, credit unions, and other covered financial institutions for nearly a quarter-century,” wrote Thaler. “Changes to the GLBA must be viewed with a cautionary eye. While some modernization of the GLBA for financial institutions may be in store, the system has generally been a success and should be a model for other areas. Making the system work best means expanding financial data protection requirements outside of just financial services. Retailers, merchants, and others who handle financial data should be subject to new requirements similar to those standards adopted for financial institutions.

“Moving legislation for one without the other, threatens to do more harm than good for credit unions. We urge the Committee to ensure a balance that recognizes the concerns of credit unions as Congress tackles the important issue of privacy reform,” Thaler concluded.

McHenry introduced the bill Friday; a subcommittee had discussed a draft of the bill earlier this month. Thaler offered support for several areas of the legislation, including:

• bringing data aggregators under the scope of the GLBA;
• excluding credit union service organizations (CUSOs) from the definition of a data aggregator, which protects CUSOs from unnecessary NCUA oversight;
• strengthening and clarifying the federal preemption of state laws; and
• leaving in place existing GLBA enforcement provisions.

Thaler also shared comments on consumers’ access to their financial data, termination of data sharing between consumers and their financial institution, and the opt-in requirement for the use of nonpublic personal information to ensure credit unions are not overly burdened by new or murky regulations.

Review NAFCU’s principles for a federal data privacy standard as the association monitors today’s markup and continues to engage lawmakers on these issues.