GOP draft bill would tighten rules for finance firms using customer information

Rep. Patrick McHenry, a Republican of North Carolina and rating member of the House Financial Services Committee, speaks throughout a listening to in Washington, D.C.

Andrew Harrer | Bloomberg | Getty Images

A brand new draft bill from House Financial Services Ranking Member Patrick McHenry, R-N.C., lays the groundwork for how the GOP will sort out monetary information privateness if the get together wins again the bulk within the chamber this November.

The dialogue draft, shared completely with CNBC, would modernize a monetary information safety legislation referred to as the Gramm-Leach-Bliley Act to cowl information aggregators along with monetary establishments and require extra transparency with clients. Such modifications may find yourself making use of to fintech corporations like Plaid or Intuit’s Mint.

The textual content comes on the identical day that lawmakers on the House Energy and Commerce Committee marked up the American Data Privacy and Protection Act, a brand new bipartisan framework that has launched digital privateness again into the limelight simply as Congress prepares to wrap up for its August recess. While the push for a federal privateness legislation has had many stops and begins up to now, the brand new textual content supplied a renewed spark behind the trouble because it included compromises on key points that had beforehand stalled talks.

The draft goals to replace a focused a part of the legislation and broaden it so it would stay related even within the face of additional innovation, in line with a senior Republican staffer for the Financial Services Committee not licensed to talk on the document.

“We didn’t want to start with a really prescriptive and restrictive model that’s going to prevent developers from building a new app or fine-tuning your app, creating new products,” the staffer mentioned. “But we wanted to make sure that consumers had all of the information to make smart choices about what they are willing to share and what they are not willing to share.”

The dialogue draft would require the monetary establishments to inform clients when their nonpublic private information is being collected, not simply when it is being disclosed to 3rd events.

It additionally would permit customers to inform monetary establishments and information aggregators to cease amassing their information or delete the information they’ve. In addition, it would broaden the definition of personally identifiable nonpublic information topic to the legislation and firms lined by the bill would have to present customers the flexibility to decide out of information assortment if it is not vital to offer service.

The draft bill permits for federal companies to create rules that take into accounts the doubtless larger burden of compliance on smaller firms. It would additionally preempt state legislation to create a nationwide commonplace, one thing that some Democrats have rejected in different privateness discussions as a result of they see the states as vital locations to broaden protections on prime of federal legislation.

“This proposal will modernize the current framework to better align with evolving technology and protect against the misuse or overuse of consumers’ personal information,” McHenry mentioned in an announcement. “I look forward to continuing to work with my colleagues on this discussion draft to secure Americans’ privacy without strangling innovation.”

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