NEWS WRAP - Retirement Planning Sector Braced for CCPA Proposals
The wealth management and financial services sectors in the US must brace themselves for new data regulations as a result of likely changes to the California Consumer Privacy Act (CCPA) which initially passed into state law on January 1 2020.
The upcoming changes involve the right to opt out, permissible uses of data by service providers, and mandatory content of CCPA notices.
California's attorney general announced that stakeholders had until February 25 to share their views on what many anticipate is the most exhaustive consumer privacy law in the history of the United States and which is set to affect around $12 billion worth of Californian consumer data per year.
California – the state that affects the world
Given that California's economy is so developed that when it's GDP is placed in a list of nation states it sits at fifth largest in the world (placing it just ahead of the United Kingdom), the regulatory changes will undoubtedly be felt by industries and business sectors across the globe.
In its January 6 advisory notice, the California Attorney General's office, states, "Knowledge is power, and in today's world knowledge is derived from data. When it comes to your own data, you should be in control. In California we are rebalancing the power dynamic by putting power back in the hands of consumers." *
CCPA in brief
As it stands, all for-profit companies that carry out business in California, whether they are based in the state or not, are required to adhere to CCPA if they collect personal information from California's residents and meet one or more of the following criteria:
- They have more than $25 million in revenue.
- They share, receive, or buy the personal information of 50,000 or more consumers, households, or devices.
- They derive 50% or more of annual revenues from selling the personal information of California consumers.
The latest proposals will also result in additional, far reaching compliance obligations including the requirement for a "Do Not Sell" button to be placed alongside a financial services company's cookies notice on its website for use by consumers – this will form part of a system that will give people the right to opt out.
There will also be an enhanced definition of ‘personal information' to include any piece of information that could reasonably link data to a particular individual or household.
According to the Attorney General's office, the proposals include the following changes.
- Right to know: Consumers may ask a business to disclose the full range of data it collects, uses, shares or sells.
- Right to delete: Consumers may request the deletion of personal data held by a business or its service providers.
- Right to opt-out: Consumers may opt not to share their data with a business.
- Rights for minors regarding opt-in consent: children under the age of 16 must provide opt-in consent, with a parent or guardian consenting for children under 13.
- Right to non-discrimination: Businesses may not discriminate against any consumer for expressing their privacy right under CCPA.
At this stage it is essential that the financial services sector remains engaged with the developing regulatory process for CCPA. Many commentators expect that the final rules will be in place before the CCPA's July 1 deadline, with enforcement measures due to be enacted at the same time.
Impact on the retirement planning sector
According to Groom Law Group's David Levine, the modifications will class "employment benefits" separately to other data and they will be a distinct data usage category. This means that the CCPA proposals may actually benefit the retirement planning industry.
However, he warned that discrepancies between Californian state law and federal law could lead to a rocky transition period. "These issues are not settled and it will take some time for all the legal nuances to be worked out," he said.**
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