Lawmakers should “use a scalpel, not a sledgehammer” as they seek to update the key federal law regulating how banks and other financial institutions safeguard their customers’ data, House Financial Services Committee Chairman French Hill (R-Ark.) said today.
The committee held a hearing on updating the Gramm-Leach-Bliley Act, or GLBA, to reflect modern advances in technology. In a statement, Hill emphasized his desire to maintain the GLBA’s technology-neutral framework while balancing consumer data rights with practical requirements for financial institutions.
“As we consider additions to the GLBA, we must strike a balance to achieve consumers’ desire for greater control over their financial data on the one hand, and on the other hand, their desire for their financial services to work as seamlessly as possible and without having to wade through a sea of checkboxes and emails,” Hill said.
Ranking Member Maxine Waters (D-Calif.) pushed back, arguing that millions of Americans “remain powerless when it comes to how their data is being used, shared and sold.” She was critical of Trump administration efforts to weaken and dismantle the Consumer Financial Protection Bureau, which she said was created to enforce safeguards for consumer data.
“Without stronger guardrails in place, that data can be exploited not just by corporations looking to profit, but by bad actors eager to steal and use this data,” Waters said.
ABA seeks equal treatment, federal preemption
In comments submitted ahead of the hearing, the American Bankers Association urged Congress to apply the same privacy and securities standards for banks to other industries “who have not been subject to robust laws and oversight on the protection of consumer data.”
The association also offered several proposals for how lawmakers should proceed, including ensuring that any federal standards preempt state laws.
“In our view, it is critical that any new federal privacy law preempt existing state laws to avoid inconsistent and duplicative requirements that could potentially disrupt financial markets, transactions, and accounts,” ABA said.
