On March 17, the House Financial Services Committee held a hearing titled “Updating America’s Financial Privacy Framework for the 21st Century” to examine potential reforms to Title V of the GLBA, including possible federal preemption of state data privacy laws. Rep. French Hill (R-AR), the committee’s chairman, emphasized the importance of maintaining the law’s technology-neutral framework while considering new consumer data control provisions such as access rights, deletion rights, and data minimization standards. At the hearing, discussions broadly focused on modernizing consumer data protections, reducing regulatory fragmentation and ensuring consistent standards across all entities handling financial data. Witnesses and committee members further discussed the “patchwork” of state privacy laws that have emerged in the years since the GLBA’s enactment, with several lawmakers expressing support for a uniform federal standard.
The committee examined a discussion draft circulated by Rep. Bill Huizenga (R-MI) that would amend Title V of the GLBA. The draft reframes the law’s focus from “Disclosure” to “Treatment” of consumer financial data, establishing data minimization requirements and granting consumers continuing opt-out rights along with new rights to access or request deletion of their information. The draft includes language that: (i) restricts financial data aggregators from using consumer access credentials without clear disclosures about privacy risks; (ii) expands the definition of nonpublic personal information to include biometric and geolocation data; (iii) requires privacy notices to address data retention policies and AI use; (iv) provides federal preemption of state data privacy laws while preserving state insurance authority enforcement powers; (v) mandates the model form be updated; (vi) provides a one-year safe harbor for institutions using prior model privacy forms; and (vii) directs regulators to consider compliance burdens on institutions with $15 billion or less in assets. The discussion draft has not been introduced in the House, and the committee has yet to vote on the draft.
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