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American Financial Services Association

Privacy Legislation on Pause

Privacy Legislation on Pause

In anticipation of today’s markup of the American Privacy Rights Act of 2024 (APRA), AFSA sent a letter to Chair Cathy McMorris Rodger (R-WA) and Ranking Member Frank Pallone (D-NJ) suggesting changes to the APRA that would ensure it works best for businesses and consumers alike. AFSA is highly supportive of legislation that creates a federal standard of consumer privacy protection. However, such legislation should ensure that financial institutions that already comply with strong data privacy and security requirements under the GLBA have a clear exemption. This will avoid inconsistent requirements and ensure that there is no interruption in data privacy for consumers. It must also have an enforcement system that works with appropriate state or federal regulators and prevents the possibility of improper interpretations of the law. We urged the Committee to address these concerns before moving forward with this legislation.

AFSA also joined other organizations in expressing concerns with the American Privacy Rights Act (APRA) as drafted in two more letters. Both joint trades letters highlight the importance of including full preemption in any national privacy framework. Full preemption is essential for protecting Americans’ data privacy and providing an environment for American businesses to continue innovating and creating jobs. Since 2018, the rapidly growing landscape of state-level privacy laws has created a fragmented patchwork of rules and regulations. 

Resources that would normally go toward creating jobs, protecting consumers, and improving products and services are instead being spent on navigating these compliance challenges. According to a study by the Information Technology and Innovation Foundation, failing to pass a comprehensive and preemptive federal data privacy law will cost our economy more than $1 trillion over ten years, with $200 billion being paid by small businesses.

June 27th, 2024

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