Magazine article Business Credit

NACM Update on Privacy Legislation Affecting Business Creditors

Magazine article Business Credit

NACM Update on Privacy Legislation Affecting Business Creditors

Article excerpt

THIS MONTH, NACM HOSTED ADVOCACY DAY on Capitol Hill for members to visit the Hill and learn about significant legislative issues ... an opportunity to share a credit professional's perspective on the legislative needs and desired focus of the business credit profession. As several pieces of legislation related to privacy gain momentum, we believe it is important to present NACM's position.

Privacy Legislation

Legislation to provide greater protection to consumers who have been subjected to a loss of their personal data or have been the target of identity theft has become a major priority for Congress. To address these concerns, there have been dozens of pieces of legislation introduced and debated. Basically, these bills would increase federal penalties for identity theft and require data brokers to notify consumers when the security of their personal information has been breached or compromised.

The Federal Trade Commission (FTC) says that during a one-year period, nearly 10 million people had discovered that they were victims of identity theft. Estimated losses translated into $48 billion for businesses and $5 billion to consumers.

The Senate has at least three versions of data security legislation that are under consideration, and on the House side, there are two. Part of NACM's concern with these bills are the definitions offered in the legislation. For example, the Senate defines "Data Broker" as follows:

The term 'data broker' means a business entity which for monetary fees, dues, or on a cooperative nonprofit basis, currently or regularly engages, in whole or in part, in the practice of collecting, transmitting, or providing access to sensitive personally identifiable information primarily for the purposes of providing such information to non-affiliated third parties on a nationwide basis on more than 5,000 individuals who are not the customers or employees of the business entity or affiliate.

Also, the term "Data Furnisher" is:

The term 'data furnisher' means any agency, governmental entity, organization, corporation, trust, partnership, sole proprietorship, unincorporated association, venture established to make a profit, or nonprofit, and any contractor, subcontractor, affiliate, or licensee thereof, that serves as a source of information for a data broker. …

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