Washington Retail Insight - March 17, 2006

Volume 11, Number 6
March 17, 2006

In Today's Edition:

• House Committee Approves Data Security Bill

• Senate Panel OKs Small Business Health Plan Measure

• Washington Leadership Conference Scheduled for May

• NRF Plans Hometown Meetings with Lawmakers

• Congressional Outlook

• NRF Events

House Committee Approves Data Security Bill

      The House Financial Services Committee this week approved a data security bill that would set national standards for notifying consumers when credit card data or other sensitive financial information is breached. The measure would also allow consumers who have been victims of identity theft to freeze their credit reports.

     H.R. 3997, the Financial Data Protection Act, sponsored by Representative Steven LaTourette, R-Ohio, was approved 48-17 on Thursday.

     As originally written, the bill would have amended the Fair Credit Reporting Act to require companies to notify consumers of data breaches involving sensitive financial data that could cause "substantial harm or inconvenience" to the consumer. Seeking to pick up more support from committee Democrats and consumer groups, LaTourette this week broadened the requirement by dropping the word "substantial," but opponents argued that the provision was still not broad enough.

     The bill would create the first national standard for notifying consumers of data breaches, preempting a patchwork of state notification laws currently on the books in at least 17 states.

     Companies would be required to adopt "reasonable policies and procedures" to protect data, and to investigate breaches immediately upon becoming aware of "an unusual pattern of misuse of sensitive financial personal information." Companies that encrypt customers' data would be given a safe harbor.

     The bill would also allow consumers to place a file freeze on their credit reports, but would limit the provision to individuals who are proven victims of identity theft. The committee rejected Democratic amendments that would have allowed any consumer to freeze credit reports. NRF has opposed file freezes because their widespread use would hamper the ability of retailers to offer instant credit.

     Despite this week's action, debate on the issue is far from over. The House Commerce Committee is expected to vote this month on another data security bill that includes a broader credit-freeze provision, and other data security bills are pending in the Senate.

     NRF initially welcomed federal data security legislation because it would set a national standard for data breach notification that would preempt conflicting state laws on the subject. But congressional debate has turned toward broader privacy legislation that could interfere with routine retail operations like instant credit, making it unclear whether merchants would benefit.

     For more information, contact NRF Senior Director and Government Relations Counsel Elizabeth Treanor Oesterle at (202) 626-8109.

Senate Panel OKs Small Business Health Plan Measure

     Small businesses could band together to get better rates on employee health insurance under legislation approved this week by a Senate committee.

     S. 1955, the Health Insurance Marketplace Modernization and Affordability Act, sponsored by Chairman Michael Enzi, R-Wyo., was approved 11-9 by the Senate Health, Education, Labor and Pensions Committee on Wednesday. Consideration by the full Senate could come in early May.

     The measure would allow businesses and trade associations to pool their members in Small Business Health Plans in order to purchase insurance coverage at rates available to large groups, similar in concept to Association Health Plan legislation.

     AHP bills have repeatedly passed the House over the past several years only to stall in the Senate. The Enzi bill -- intended to address opponents' concerns -- differs from AHPs by maintaining state regulatory oversight and not allowing the plans to self-insure. It would also establish a federal commission to streamline various state regulations and reduce administrative costs.

     NRF has strongly supported AHP/SBHP legislation since the concept was first proposed, seeing it as a means to help small retailers bring skyrocketing employee health costs under control and as part of a multi-component plan for addressing health insurance costs for all retailers.

     Enactment of SBHPs would save small businesses approximately 13 percent of the cost of employee health care benefits. More than 90 percent of retail businesses have fewer than 20 employees, and a quarter of the nation's 45 million uninsured individuals are the owners or employees of small businesses and their families.
     For more information, contact NRF Vice President for Government and Political Affairs Rob Green at (202) 626-8195.

Washington Leadership Conference Scheduled for May

     Issues ranging from health care to international trade will be on the agenda when retail executives from across the country come together in May for NRF's 71st annual Washington Leadership Conference.

     The conference is scheduled for May 16-17, and will include meetings with high-ranking lawmakers, lobbying on Capitol Hill, and other activities to promote the industry's position on a wide range of public policy issues. The conference is co-hosted by NRF's National Council of Chain Restaurants division and will address issues important to restaurants as well as retailers.

     This year's conference is particularly important: with the 2006 mid-term elections rapidly approaching, Congress will be under pressure to make decisions on a number of critical, politically charged issues that can seriously impact the retail and restaurant industries. Lobbying meetings are expected to cover employee health insurance, international trade, credit card interchange, minimum wage, tax policy, immigration reform, data security, Americans with Disabilities Act updates, and obesity lawsuit legislation among other topics.

     Speakers are still being arranged, but retailers will hear from key members of the House and Senate, and senior-level representatives of the Bush Administration. In addition to lunch and breakfast speeches by lawmakers, participants will have the opportunity to meet informally with House and Senate members during a reception at the U.S. Capitol, and lobbying meetings will provide an opportunity for in-depth discussions.

     The conference will also include meetings of the NRF's Policy Council, International Trade Advisory Committee, Strategic Supply Chain Council, Gift Card Working Group, Loss Prevention Legislative Committee, and State Association Council, along with the NCCR Executive Committee.

     In addition, recently retired Alabama Retail Association President Charles McDonald will be presented with NRF's prestigious Thomas Weyant Award which honors individuals who have committed their professional careers to state retail associations.
     NRF and NCCR lobby lawmakers on a daily basis throughout the year, but WLC brings executives to Washington for an opportunity for the industry to have its voice heard on Capitol Hill en masse. Participants are a mix of senior government affairs executives, independent store restaurant owners and state association officials. 

     Conference registration details are available at www.nrf.com/wlc.
     For more information, contact NRF Director of Grassroots and Industry Relations Marsha Dionne at (202) 626-8152.

NRF Plans Hometown Meetings with Lawmakers

     NRF will begin this year's series of Retail Education Events next month with hometown meetings between retailers and members of Congress in three states.
     A breakfast meeting between local merchants and Representative Mark Kennedy, R-Minn., will be held on April 11 in Woodbury, Minn., co-sponsored by the Minnesota Retailers Association. A similar session with Representative Nydia Velazquez, D-N.Y., will follow on April 20 in New York City, co-sponsored by the Greater New York Chamber of Commerce. The third will be held April 21 in Columbus, Ohio, with House Republican Conference Chairwoman Deborah Pryce, R-Ohio., co-sponsored by the Ohio Retail Merchants Association.

     With a wide variety of issues on the congressional agenda this year, discussions are expected to focus on international trade, health care and tax policy among other topics.

     Retail Education Events are informational meetings -- not political endorsements -- held to help members of Congress understand the importance of the retail industry to the economy. The meetings give retailers an opportunity to meet new members of Congress and to reinforce their relationships with veteran lawmakers.

     For more information or to register, contact NRF Director of Grassroots and Industry Relations Marsha Dionne at (202) 626-8152.

Congressional Outlook:

House: Returns 12 noon, Monday, March 20.

Senate: Returns 1 p.m., Monday, March 27.

NRF Events:

• March 29-30, Taxation Committee, Washington, D.C.
• April 26-28, Committee on Employment Law, Longboat Key, Fla.

     For information on NRF events, contact Eileen Pryor at (202) 626-8114 or pryore@nrf.com.

     Washington Retail Insight is published each week that Congress is in session by the National Retail Federation, 325 7th St. NW, Washington, D.C. 20004.

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