Financial Services Committee Advances McHenry’s Data Privacy Act
H.R. 1165 will put Americans back in control of their financial data
Washington,
February 28, 2023 -
Today, the Data Privacy Act of 2023, introduced by Chairman Patrick McHenry (NC-10), passed the House Financial Services Committee during its first markup of the 118th Congress. H.R. 1165 modernizes financial data privacy law and gives consumers more control over how their personal information is collected and used—without stifling innovation in the United States.
Watch Chairman McHenry’s remarks in support of H.R. 1165 here.
Read Chairman McHenry’s remarks as prepared for delivery:
“The Data Privacy Act of 2023 will put Americans back in control of their financial data. It will ensure consumers know where their information is going and who is using it.
“This bill rebalances regulation for the financial sector, which is already highly regulated when it comes to consumer data.
“H.R. 1165 simply brings our privacy guardrails into the 21st century.
“Advances in technology have revolutionized our financial system. These innovations have helped more people access financial products and services all around the country—that is a good thing.
“However, it also means that the amount of personal financial information collected on Americans is at an all-time high.
“We know this data can help inform the development of new products or ensure an entity can better serve its customers—but it is critical that this personal financial data is appropriately protected. As with most issues in the financial system, we need to balance fostering innovation with protecting consumers.
“This bill makes a number of modifications to the protections that Congress passed back in 1999 in the original Title 5 of what became known as the Gramm Leach Bliley Act or GLBA.
“First, it modernizes these protections using a technology-agnostic approach.
“We know our technological landscape is constantly evolving. Just look back to the original House report from H.R. 10. The issues were similar but different technology dramatically different.
“The enhanced consumer protections in the Data Privacy Act will apply seamlessly to future innovations. In other words, we won’t be back here in five years updating this proposal to reflect the latest and greatest technology.
“Second, the bill gives more control to the consumer on how their personal information will be used downstream.
“Currently, a consumer may provide their information to a financial institution for one purpose – never to know that it is being shared and reshared to multiple entities downstream.
“Under this bill consumers now have the right to terminate collection of their data or request that it be deleted at any time.
“Third, the Data Privacy Act will protect against the misuse or overuse of a consumer’s nonpublic personal information. An entity will be required to tell a consumer why they are collecting certain data and only use that data for the stated purpose.
“Consumers will be allowed to opt out of any data collection to which they don’t consent.
“Fourth, privacy terms and conditions must be transparent and easily understandable. Look, we all know what happens when a terms and conditions page pops up. It’s a mad dash to the ‘agree’ button. Privacy terms should not be in legalese — simple as that.
“Finally, there should be consistency across the country. If a family moves from, say, California to Texas, it doesn’t make sense for the guardrails around their personal financial data to change. A national standard will provide certainty to both consumers and the entities that handle their data.
“I’ll conclude with this; the Data Privacy Act is the culmination of more than three years of work by Committee Republicans.
“We started with a working group, took input from members and groups across the ideological spectrum, released principles, evaluated state and European standards, and then issued a discussion draft last year. We made real changes to address the growing concerns Americans have had with their data being used without their consent.
“My point is this, we can craft thoughtful, tailored legislation that benefits Americans in every single one of our districts. We don’t need to enlarge the size of government to accomplish it.
“I believe this bill is a good example of what this committee can accomplish. I encourage my colleagues on both sides of the aisle to support this legislation.”
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