Patrick McHenryChairman

Washington, June 23, 2022 -

Today, the top Republican on the House Financial Services Committee, Patrick McHenry (NC-10), released a discussion draft of new legislation to modernize financial data privacy laws and give consumers more control over how their personal information is collected and used.

“Republicans are putting the American people back in control of their personal financial data,” said Republican Leader McHenry. “Technology has fundamentally changed the way consumers participate in our financial system—increasing access and inclusion. It has also increased the amount of sensitive data shared with service providers. Our privacy laws—especially as they relate to financial data—must keep up. This proposal will modernize the current framework to better align with evolving technology and protect against the misuse or overuse of consumers’ personal information. I look forward to continuing to work with my colleagues on this discussion draft to secure Americans’ privacy without strangling innovation.”

Read a one-page summary of the discussion draft here.

Read a more detailed section-by-section summary here.

Read the text of the discussion draft in its entirety here.

Key Pillars of the Committee Republican Data Privacy Discussion Draft:

Modernizes the Gramm-Leach-Bliley Act Using a Technology-Agnostic Approach

• This bill modernizes GLBA to better align with our evolving technological landscape. Advances in technology have innovated the financial system and the way in which consumers interact with financial institutions, including nonbank institutions. The consumer protections contained in the bill will apply seamlessly to future innovation and new technologies.

Puts Control Back in the Hands of the Consumer

• The bill ensures consumers control how their personal information will be used beyond financial institutions. The bill empowers consumers to understand how their data is being collected and used by a service provider when they agree to the provider’s privacy policy. In addition, the bill ensures consumers have the right to terminate collection of their data, and/or request deletion of their data, at any time.

Data Minimization

• The bill protects against the misuse or overuse of consumer nonpublic personal information. Under the bill, entities are directed to disclose to consumers why they are collecting certain pieces of data, and only use data for its stated purpose. Covered entities must provide consumers with an opportunity to opt out of the data collection if it is not necessary to provide the product or service offered by the entity.

Informed Choice and Transparency

• The bill empowers consumers by requiring privacy terms and conditions to be transparent and easily understandable. Consumer disclosures are critical to understanding what data is collected; the manner in which the data is collected; the purposes for which the data will be used; who has access to the data; how an entity is using the data; where the data will be shared; data retention policies of the entity; and the rights associated with that data for uses inconsistent with stated purpose.

Preemption

• The bill provides consistency across the country with respect to understanding how downstream entities are collecting and using personal information. A national standard will reduce compliance burden and provide certainty to both consumers and entities that handle their financial data.

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