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Texas Committees to Hear 2 Major Bills: Data Security and POD Disclosure Bills
Monday, April 24, 2017 7:05 AM

This week, two bills of interest to credit unions are slated to receive committee hearings. Others may be added during the week.

Data Security, HB 2333 by Rep. Gary Elkins (R-Houston), in the House Business and Industry Committee on Monday Morning, April 24.
The Texas Credit Union Association has been working with Rep. Elkins on this very important bill to strengthen cybersecurity and protect credit unions from the financial losses they incur after retailers experience data breaches. Cornerstone Credit Union League and Texas Credit Union Association support HB 2333.*

The bill would require that a business report a breach of its system to the attorney general no more than 24 hours after discovery of the breach and send notice to each financial institution that issued a credit or debit card affected by the breach "as soon as practicable."

A victim compensation fund would be created to pay claims to consumers who suffered a financial loss due to the breach and to reimburse financial institutions for costs associated with the breach. The businesses would be liable for a penalty of $50 for each credit and debit card compromised. The money from these fees would go into the crime victim compensation fund.

Elkins is expected to lay out a substitute bill that will require notice of a breach by a business when credit and debit card information is compromised to the attorney general and financial institutions whose card info is lost. It includes a duty of the merchant to protect card data if they keep it, and the attorney general can bring an action against a business who fails to do so. If damages are awarded, a credit union could request reimbursement for reassurance costs and fraud losses they incurred as a result of the breach.

Ron Fox, CEO of Fort Wort City Credit Union, will be testifying before the committee on behalf of the League.

POD Disclosure: Companion Bill to SB 714
HB 1752 by Rep. Jessica Farrar (D-Houston) will be heard in the House Investments and Financial Services Committee Tuesday afternoon. This bill is the companion to SB 714, the Senate bill that would impose additional requirements on credit unions when opening new or modifying existing accounts that offer a payable-on-death feature. SB 714 has been approved by the Senate Business and Commerce Committee and could be considered on the Senate floor as early as Monday, April 24. These bills would make indirect, online, and mobile app lending more difficult for credit unions.

Credit union officials, staff, volunteers, and members should contact their senators and representatives this week by phone and email asking them to vote no.

"Credit unions should continue to call and write opposing the bill throughout the week," said Texas Credit Union Association President Jeff Huffman. "If you are unfamiliar with who represents you, please visit Who Represents Me."

Click here for a list of phone numbers for the Texas Senate.

Click here for a list of phone numbers to the Texas House.

For more information, please contact Texas Credit Union Association President Jeff Huffman at 469-385-6488 or jhuffman@txcua.coop.

* This article has been clarified from its original version to reflect Cornerstone and TXCUA’s support of HB 2333.