Senators introduce data security legislation

By John Poirier

WASHINGTON (Reuters) – Two senators on Monday introduced
legislation to better protect sensitive personal data held by
institutions including financial services firms, retailers and
government agencies.

“We are not doing enough to protect consumers and
businesses from identity theft and account fraud,” said Sen.
Bob Bennett, a Utah Republican who chairs the Senate banking
subcommittee on financial institutions.

Bennett and Sen. Tom Carper, a Delaware Democrat,
introduced the Data Security Act of 2006, which creates a
uniform national standard to safeguard data on Social Security,
driver’s licenses, credit cards, and account access codes and
passwords.

It also requires that notifications be sent to consumers
when there is a likelihood that stolen identities or accounts
could cause “substantial harm or inconvenience.”

Similar legislation has emerged from committees in the
House of Representatives, but the full House has not yet voted
on a final version.

Personal information on 26.5 million veterans was stolen
last month from the Department of Veterans Affairs. Since then,
authorities have said the stolen data includes information on
2.2 million active-duty, National Guard and Reserve troops.
Personal data on 28,000 U.S. sailors and their families
appeared on a public Web site last week.

Even Agriculture Secretary Mike Johanns and other top
officials were among 26,000 people whose personal information
may have been stolen by a computer hacker, the department said
last week.

“We used to just worry about people breaking into our homes
or stealing our cars, but in the 21st century, we have to worry
about people stealing our identities via computers and the
Internet,” Carper said.

The Senate bill would cover any information that could be
used to commit identity theft or account fraud at businesses
and government institutions, which would be required to
safeguard all paper and electronic records.

The American Bankers Association said banks already have a
system in place. “It makes sense to extend bank-like
regulations to other industries that handle sensitive
information,” said ABA executive director Floyd Stoner.

The bill would also charge state and federal regulatory
agencies to oversee the operations and business practices of
their entities, and the agencies themselves would be internally
regulated.