Texas Senate Bill SB1409

Texas 2017 - 85th Regular

Caption

Relating to a breach of system security of a business that exposes consumer credit card or debit card information; providing a civil penalty.

Impact

One of the notable components of SB1409 is the creation of the Data Security Breach Victim Compensation Fund, which is intended to provide financial restitution to consumers who suffer losses due to a security breach. Additionally, the bill imposes civil penalties on businesses that fail to secure their systems adequately. Specifically, businesses could be liable for a civil penalty of $50 for each credit or debit card affected by the breach, which would be collected and deposited into the compensation fund. This penalty acts as both a deterrent against inadequate security measures and a means of recovering some costs associated with breaches.

Summary

Senate Bill 1409 aims to address security breaches involving the unauthorized acquisition of sensitive personal information, particularly focusing on consumer credit and debit card data. The bill establishes necessary amendments to the Business & Commerce Code to enhance the requirements for businesses in the event of a security breach. It compels businesses that accept card payments to implement security measures to protect retained data and to notify the Attorney General and affected financial institutions within 24 hours of discovering a breach. This swift notification is crucial for preventing further financial harm to consumers and assisting in containment efforts.

Contention

Despite its protective intentions, SB1409 has the potential for contention among stakeholders. Proponents argue that the bill will enhance consumer protections and improve accountability among businesses regarding their cybersecurity practices. Conversely, some opponents may feel that the civil penalties could be excessively burdensome for smaller businesses, particularly those already struggling with compliance costs. Discussions may also arise regarding the effectiveness of the proposed fund in supporting impacted consumers and whether it adequately addresses the long-term implications of data breaches on consumer trust.