By Cliff Andrews, CapCity Advocates

2/1/2023

The tone in the House this year with Republicans in charge will be in stark contrast to last year when their Democratic colleagues held the majority.

The NPA will be focused on the House Financial Services Committee (HFSC), which is the primary committee of jurisdiction over pawnbrokers. As always with the Committee, we will spend time educating new and incumbent members about the vital role pawnbrokers serve in their districts. Creating this awareness helps when policy issues that affect pawn arise because elected officials who know more about pawn transaction tend to be more receptive to helping the NPA.

One of the topics that the HFSC will consider is data security. The NPA’s major issue is the transfer of personally identifiable information about pawn consumers to third-party vendors hired by state and local governments.

The new chair of the HFSC, Rep. Patrick McHenry (R-NC), is passionate about data security. He released draft legislation last year that he intends to move quickly in the coming weeks. Chairman McHenry offered these topics as among his top data security priorities:

· Modernizing the Gramm-Leach-Bliley Act (GLBA) to better align with our evolving technological landscape. Advances in technology have innovated the financial system and the way in which consumers interact with financial institutions, including nonbank institutions. The consumer protection provisions contained in the bill will apply seamlessly to future innovation and new technologies.

· Putting Control of Data Back in Consumers’ Hands to ensure that consumers control how their personal information will be used beyond financial institutions. The bill empowers consumers to understand how their data is being collected and used by a service provider when they agree to the provider’s privacy policy. In addition, the bill ensures consumers have the right to terminate collection of their data, and/or request deletion of their data, at any time.

· Minimizing Data Collected. The goal is to protect against the misuse or overuse of consumer nonpublic personal information. Entities are directed to disclose to consumers why they are collecting certain pieces of data, and only use data for its stated purpose. Covered entities must provide consumers with an opportunity to opt out of the data collection if it is not necessary to provide the product or service offered by the entity.

· Empowering Consumers to Have and Exercise Informed Choices and Enhance Transparency. The bill requires privacy terms and conditions to be transparent and easily understandable. Consumer disclosures are critical to understanding what data is collected; the manner in which the data is collected; the purposes for which the data will be used; who has access to the data; how an entity is using the data; where the data will be shared; data retention policies of the entity; and the rights associated with that data for uses inconsistent with stated purpose.

· Preempting inconsistent state and local laws provides consistency across the nation with respect to understanding how downstream entities are collecting and using personal information. A national standard will reduce compliance burdens and provides certainty to both consumers and entities that handle their financial data.

A list of the members can be found here: https://financialservices.house.gov/about/members.htm. We encourage readers to see if your pawnshops might be in one of these important districts.

Please make plans to attend NPA’s spring legislative conference this April in Washington, D.C. This event is the perfect opportunity to make relationships with your elected congressional members. This year will be different though as the House and Senate are officially open for face-to-face visits, which is the first time since COVID!