OLR Bill Analysis

SB 873 (File 189, as amended by Senate "A")*

AN ACT CONCERNING STATE CHARTERED BANKS.

SUMMARY:

By law, anyone possessing personal information about another person must safeguard it and the computer files and documents that contain it. “Personal information” is information that can be associated with an individual through an identifier like a Social Security number. The law gives each state agency the authority to enforce this provision against its licensees, registrants, or certificate holders. This bill gives agencies the authority to enforce the law against holders of charters subject to their supervision, thereby clarifying that the Department of Banking can enforce the provision against banks.

The bill also specifies that a financial institution's adoption of safeguards that comply with the federal Gramm-Leach-Bliley Act constitutes compliance with the law on safeguarding personal information.

Finally, the bill eliminates a requirement that penalties for violations concerning safeguarding personal information be deposited into the privacy protection guaranty and enforcement account. This account was never established. Instead, these penalties are deposited into the General Fund by the enforcing agency.

*Senate Amendment “A” adds the provision on the privacy protection guaranty and enforcement account and provides that institutions complying with Gramm-Leach-Bliley are already in compliance with, rather than exempt from, the law.

EFFECTIVE DATE: October 1, 2009

BACKGROUND

Gramm-Leach-Bliley Act

The federal Gramm-Leach-Bliley Act of 1999 applies to financial institutions and how they handle nonpublic personal information. It requires federal regulators to establish comprehensive standards for ensuring the security and confidentiality of consumers' personal financial information.

Related Bill

sSB 1090 (File No. 718) makes the same changes with respect to the privacy protection guaranty and enforcement account.

COMMITTEE ACTION

Banks Committee

Joint Favorable