data breach notification law

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On November 18, 2021, the US federal banking regulators Office of the Comptroller of the Currency, Federal Reserve Board and Federal Deposit Insurance Corporation jointly announced a final rule that will require banking organizations (which includes the U.S. operations of foreign banking organizations) to notify their regulators as soon as possible but no later than 36 hours of identifying a significant “computer-security incident” that results in “actual harm” and rises to the level of a “notification incident” as defined in the final rule. The proposed rule would also impose a separate notification requirement on companies (such as data processing companies) that provide certain services to those banks. Those service providers would be required to notify “each affected banking organization customer as soon as possible when the bank service provider determines that it has experienced a computer-security incident that has caused, or is reasonably likely to cause, a material service disruption or degradation for four or more hours.”  The final rule reflects several significant changes to the proposal that had been issued for comment in January 2021, including a narrowing of the definition of “computer security incident” from merely “significant” incidents and a notification window of 36 hours instead of “immediate[].”

The final regulations go into effect on April 1, 2022, with a compliance date of May 1, 2022.

On August 27, 2021, the U.S. House Homeland Security Committee released a draft bill that would, among other things, establish a Cyber Incident Review Office (CIR Office) within the Cybersecurity and Infrastructure Security Agency (CISA), which is part of the U.S. Department of Homeland Security (DHS), and require critical infrastructure owners and operators to report cybersecurity incidents to the CIR Office. The bill would be known as the “Cyber Incident Reporting for Critical Infrastructure Act of 2021” (the Act) and would build on recent Executive Orders and directives aimed at the U.S. critical infrastructure (including pipelines).

Several U.S. states have recently introduced and passed legislation to expand data breach notification rules and to mirror some of the protections provided by Europe’s newly enacted General Data Protection Regulation (“GDPR”). See our previous blog posts on GDPR here and here.   Like their European counterparts, these state laws are intended to provide consumers with greater transparency and control over their personal data.  The California and Vermont laws, in particular, go beyond breach notification and require companies to make significant changes in their data processing operations. See our earlier post on the  California Consumer Privacy Act (“CCPA”) here.

On Thursday, April 26, 2018, the Massachusetts Senate unanimously passed a data breach protection bill that strengthens consumer protections after security breaches involving consumer credit reporting agencies.  If passed, the proposed legislation would amend Massachusetts’s current breach notification law.  The bill aims to help consumers protect their sensitive information before, during, and after a data breach.

Earlier this month, Delaware revamped its data breach notification law, with changes to go into effect April 14, 2018.  Most notably, the new law requires any entity that has suffered a data breach that includes social security numbers to provide free credit monitoring services to affected residents for one year. The entity must provide all information necessary for the resident to enroll in such services as well as instructions for how to implement a credit freeze. This makes Delaware the second state to require credit monitoring services be provided to residents at no cost following a breach. (Connecticut has a similar provision.)

The Australian Federal Parliament commenced sitting on August 30, 2016, and the long-proposed mandatory data breach notification legislation is again on the newly-elected Coalition Government’s agenda. Currently, the Australian Privacy Act 1988 (Cth) does not require an organisation or agency to notify an individual of a data breach involving their personal information, but this looks likely to change soon.

This month, California Governor Jerry Brown signed into law five new privacy bills that the Governor said are intended to strengthen data protections for the state’s residents. The laws, effective as of January 1, 2016, implement California’s Electronic Communications Privacy Act and amend the state’s breach notification statute, among other things.

In this post, our Data Protection, Privacy & Cybersecurity team members discuss these new laws and what they mean for companies.