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California amends the California Consumer Privacy Act of 2018
On September 23, the California governor signed SB 1121, a bill amending the California Consumer Privacy Act of 2018 (the Act) enacted on June 28. (See Buckley Sandler Special Alert here.) The Act, which carries an effective date of January 1, 2020, on most provisions, sets forth various requirements for businesses that collect, transfer, or sell a consumer’s personal information. Among other changes, SB 1121 makes the following amendments to the Act:
- The bill requires businesses that collect a consumer’s personal information to disclose the consumer’s right to delete personal information in a form that is reasonably accessible to the consumer;
- The bill clarifies that the requirements imposed and rights afforded to consumers by the Act should not be interpreted in a way that infringes on a business’s ability to comply with federal, state, or local laws or that conflicts with the California Constitution;
- The bill prohibits application of the Act to personal information collected, processed, sold, or disclosed pursuant to a specified federal law relating to banks, brokerages, insurance companies, and credit reporting agencies or pursuant to the California Financial Information Privacy Act;
- The bill clarifies that the only private right of action permitted under the Act is a private right of action for violations of the data breach provisions involving a consumer’s nonencrypted or nonredacted personal information and only to the extent that the business’ failure to maintain reasonable security measures caused the breach;
- The bill eliminates the requirement that plaintiffs notify the California Attorney General prior to proceeding with private litigation under the Act;
- The bill limits the civil penalties that the California Attorney General may assess for violations to $2,500 per violation or $7,500 per intentional violation; and
- The bill prohibits the California Attorney General from bringing an enforcement action under the Act until the earlier of either July 1, 2020, or six months after the publication of the final regulations.
California governor signs amendments requiring the furnishing of customer account information associated with certain crime reports
On September 6, the governor of California signed amendments to the California Right to Financial Privacy Act to provide various state and local agencies—including the police, sheriff’s department, or district attorney in the state—the authorization to request information from financial institutions in certain circumstances associated with crime reports involving the alleged fraudulent use of drafts, checks, access cards, or other orders. Specifically, AB 3229 states that banks, credit unions, and savings associations must furnish a statement with the requested customer account information for a period of 30 days prior, and up to 30 days following, the date of the alleged illegal act’s occurrence. AB 3229 further states that financial institutions will be required to furnish account information—subject to the outlined procedures—to a DOJ special agent upon request.
Washington governor enacts amendment relating to security freeze fees
On March 13, the Washington governor signed Senate Bill 6018, which amends sections of the state’s Fair Credit Reporting Act addressing the removal of security freezes. Among other things, the amended act prohibits credit reporting agencies (CRAs) from charging a fee for placing, temporarily lifting, or removing a security freeze, or when assigning consumers unique personal identification numbers. Additionally, the offices of cybersecurity and privacy and data protection and the Attorney General’s office are instructed to work with stakeholders to evaluate the amendment’s impact on consumers and CRAs. A findings report must be submitted by December 1, 2020, and include data breach trends and recommendations by federal and state agencies. The amendment takes effect June 7.
Nebraska, South Dakota enact legislation relating to security breaches and credit freezes
On March 1, the governor of South Dakota signed House Bill 1078 to revise certain provisions addressing the removal of credit security freezes. The amended act states that a security freeze will remain in place until a consumer requests the removal from the consumer reporting agency. The consumer reporting agency is then required to remove the freeze within three business days. Separately, on February 27, the governor signed House Bill 1127 (HB 1127) to revise certain provisions concerning fees charged for security freezes. Among other things, HB 1127 prohibits consumer reporting agencies from charging a fee for placing or removing a security freeze, and stipulates that a consumer reporting agency may advise a third party that a consumer’s credit report has been frozen.
On February 28, the governor of Nebraska approved Legislative Bill 757 strengthening certain provisions of the state’s Credit Report Protection Act and the Financial Data Protection and Consumer Notification of Data Security Breach Act of 2006. Among other things, the amendments state that (i) any individual or commercial entity in the state that possesses computerized data containing personal information of Nebraska residents must maintain reasonable security and disposal procedures and practices; (ii) nonaffiliated third-parties with access to personal information must also maintain reasonable security and disposal procedures; and (iii) consumer reporting agencies must provide services free-of-charge for the placement or removal of a credit security freeze. The legislation also outlines additional violations under which the Nebraska Attorney General can enforce protection of consumer privacy in the event of a data breach.