Landmark data breach bill awaits Governor Schwarzenegger

AB 779 (D-Dave Jones), which would require retailers to reimburse data breach-related costs to banks and credit unions is now one signature away from becoming state law. "The Consumer Data Protection Act" - endorsed enthusiastically by the Consumer Federation of California - overwhelmingly passed both the Senate and Assembly and now awaits the Governor's decision. Computerworld reports:

Analysts expect the California bill, if signed into law by Schwarzenegger, to have the same ripple effect on data breach laws as the state's data breach notification law. That law was one of the first such notification laws in the country and has been adopted and imitated in one form or the other by several other states.

The measure now pending was sponsored by the California Credit Union League (CCUL). In its original form, the bill mandated that a breached entity reimburse affected banks and credit unions for all costs incurred when alerting customers of the breach and reissuing cards. Retailers would be forced to disclose more details about breaches, including a description of the categories of personal data that might have been compromised. In addition, the law would also explicitly prohibit retailers and other merchants from storing specific types of authentication data taken from the magnetic stripes on the back of credit and debit cards.

For more information on the bill, including organizatiosn that support it versus those that don't, check out CFC's analysis here...