Illinois Attorney General Lisa Madigan is leading a coalition of 32 attorneys general (Agreements) in opposition to federal preemption in the area of data breaches, identity theft, and data security.
Specifically, the group wrote a bipartisan letter on March 19, 2018, to the U.S. House of Representatives Committee on Financial Services and the Subcommittee on Financial Institutions and Consumer Credit regarding the proposed Data Acquisition and Technology Accountability and Security Act, a draft bill introduced in the House last month. They are concerned that the bill, among other things, places consumer reporting agencies and financial institutions out of the reach of state enforcement. The AGs cite recent breaches as examples of the increasing threat and evolving nature of data security risks, and argue that the states have consistently proven themselves capable of rapidly and effectively responding to and protecting consumers at the state level through their own laws.
In particular, the letter points out three key shortcomings of the Act beyond the preemption of state laws: (1) it allows entities themselves to judge whether to notify consumers of a breach, which reduces the transparency afforded by state notification requirements; (2) it allows entities that decide to notify consumers to notify after the harm has already occurred, preventing the opportunity consumers currently have under state law to take proactive steps upon timely notification; and (3) it addresses breaches that affect 5,000 or more consumers, leaving attorneys general without the ability to redress the majority of breaches affecting consumers today that do not occur on a national scale. Continue Reading