Relating to the security of certain financial information and liability for certain security breaches.
Impact
The impact of HB 4020 on state laws includes a formalization of the definition of various financial terms such as 'access device,' 'breach of system security,' and the roles of 'financial institutions' and 'service providers.' This statutory clarity enhances legal accountability for businesses handling sensitive payment information, potentially reducing the risk of data breaches and unauthorized use of consumers' financial data. Additionally, the bill requires businesses that violate these provisions to reimburse affected financial institutions for costs incurred due to breaches, creating a financial incentive for compliance.
Summary
House Bill 4020 addresses the security of certain financial information and establishes liability for certain security breaches involving access device data. The bill specifically outlines the responsibilities of businesses regarding the handling of payment information, focusing on the retention of sensitive data post-transaction. It mandates that businesses and their service providers must limit the retention of card security codes, PIN verification codes, and magnetic strip data to enhance consumer protection against unauthorized transactions.
Contention
A notable point of contention surrounding HB 4020 is the burden it places on businesses, especially smaller entities that may struggle to implement the technological safeguards required to comply with the law. Advocates argue that the protections uphold consumers' rights and encourage best practices in data management, while critics express concerns about the financial and operational impacts on businesses, fearing it could lead to increased costs and administrative complications. The bill's stipulation for reimbursement of damages also raises questions about the financial ramifications for businesses who inadvertently violate the law.
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 amendments to the Uniform Commercial Code, including amendments concerning certain intangible assets and the perfection of security interests in those assets.
Relating to amendments to the Uniform Commercial Code, including amendments concerning certain intangible assets and the perfection of security interests in those assets.
Relating to a prohibition on the enactment of a law imposing an occupation tax on certain entities that enter into transactions conveying securities or imposing a tax on certain securities transactions.