New York Passes Data Breach Law

New York state passed the Stop Hacks and Improve Electronic Data Security, which imposes new obligations on businesses collecting personal data on New York residents. The SHIELD Act requires notification to affected consumers when there is a security breach, broadens the scope of covered information, expands the definition of data breach, and extends the notification requirement to any entity with private information of a New York resident. Governor Cuomo said: "The stark reality is security breaches are becoming more frequent and with this legislation New York is taking steps to increase protections for consumers and holding these companies accountable when they mishandle sensitive data." Recent breaches have highlighted the need for stronger data protection laws. EPIC has renewed calls for a data protection agency in the U.S. and also warned that federal preemption of state privacy laws will lead to an increase in data breaches and financial fraud.