Texas House Bill HB345

Texas 2009 - 81st Regular

• Filed: 11/24/08
• Out of House Committee: 4/27/09

Caption

Relating to a business's duty to protect sensitive personal information contained in its customer records.

Impact

If enacted, HB345 would impact various state laws related to data security and consumer privacy. It emphasizes protecting consumers' personal information, particularly as it pertains to financial transactions and entities that handle such data. Additionally, the legislation introduces legal avenues for financial institutions to seek damages if a business fails to protect sensitive information, thereby enhancing accountability for businesses in case of a data breach.

Summary

House Bill 345 focuses on the obligations of businesses to protect sensitive personal information contained within their customer records. The bill mandates that businesses implement reasonable procedures to protect this data from unlawful use or disclosure. Notably, it requires that businesses comply with payment card industry data security standards if they collect and store sensitive personal information associated with access devices. These devices include credit and debit cards, implying a significant emphasis on financial transactions and data security.

Contention

The legislation's approach to data protection has raised points of contention regarding its implications for businesses. Some may argue that the compliance demands could impose financial burdens on smaller businesses lacking the resources to implement the necessary security measures, while others may assert the importance of robust data protection mechanisms to safeguard consumer rights. Furthermore, the provision that allows only financial institutions to file lawsuits in case of a breach could be seen as limiting consumers' rights to seek legal recourse directly.

Notable_points

One of the key features of HB345 is that it provides a provision for businesses to prove compliance with security standards before being held liable for breaches. This emphasizes proactive measures and aims to reduce litigation by allowing businesses to certify their compliance, potentially mitigating legal risks. The bill also hints at a structural shift in how data security obligations are administered, possibly leading to a more standardized approach to consumer data protection across the state.