Relating to a breach of system security of a business that exposes consumer credit card or debit card information; providing a civil penalty.
Impact
The implementation of HB 3478 will significantly reform the Business & Commerce Code by creating a new section dedicated to data security breaches involving payment card information. Notably, it establishes a Data Security Breach Victim Compensation Fund, which will be financed through penalties collected from businesses that do not adhere to security protocols. This fund is designed to provide financial relief to consumers affected by data breaches and aids financial institutions in managing the costs associated with such incidents.
Summary
House Bill 3478 addresses the issue of data security within businesses that handle credit and debit card information. It establishes a legal framework to define a 'breach of system security' and imposes obligations on businesses to secure sensitive consumer information effectively. If a breach occurs, businesses must notify the Attorney General within 24 hours and inform affected financial institutions promptly. This response aims to minimize the impact of security breaches on consumers and enhance accountability among businesses that fail to secure their systems.
Contention
While supporters argue that HB 3478 is a necessary step toward enhancing consumer protection and accountability for data breaches, there are points of contention regarding the burden it places on businesses. Some critics fear that the penalties might be excessive for smaller businesses, potentially stifling innovation and growth. On the other hand, advocates believe the measure is essential for ensuring that businesses take data security seriously and that consumers have recourse when their information is compromised.
Relating to homeland security, including the creation of the Texas Homeland Security Division in the Department of Public Safety, the operations of the Homeland Security Council, the creation of a homeland security fusion center, and the duties of state agencies and local governments in preparing for, reporting, and responding to cybersecurity breaches; providing administrative penalties; creating criminal offenses.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to the regulation of the collection, use, processing, and treatment of consumers' personal data by certain business entities; imposing a civil penalty.
Relating to the regulation of money services businesses; creating a criminal offense; creating administrative penalties; authorizing the imposition of a fee.