California Privacy Bill Signed Into Law

Privacy

The California Senate and Assembly passed AB 375 on June 28, authored by Assemblymember Ed Chau and Sen. Robert Hertzberg. The bill was signed by Gov. Jerry Brown.

AB 375 was a last-minute compromise with Alastair Mactaggart, the proponent of a privacy initiative that qualified for the November ballot. After AB 375 was signed, Mactaggart pulled his initiative from the ballot.

The bill language was introduced on June 22 and needed to pass the legislature and be signed by the governor by June 28 for Mactaggart to be able to remove his initiative from the ballot. June 28 was the drop-dead date for all initiatives to be removed from the ballot.

The California Credit Union League’s Legislative Advocacy Committee took an “oppose” position on Mactaggart’s initiative last year because of the broad negative implications for credit unions and their members.

The business community largely opposed this bill but also decided AB 375 was better than the initiative—which, if passed, would have taken effect immediately and required a 70 percent vote of the legislature to fix any provision. AB 375 received bi-partisan support mainly because it allows legislators to make changes to the law next year.

Most laws passed through the legislative process, including AB 375, can be amended by a simple majority vote of the legislature. The League submitted “oppose unless amended” letters to the legislature and testified in committee expressing concerns with the issues the bill presents for credit unions.

The legislation will not take effect until Jan. 1, 2020. In the meantime, California’s attorney general will be developing regulations.

The League and its legal team are working to determine the broader implications of the bill for credit unions and their members. Since the effective date of the law is delayed until 2020, the League will be seeking changes before then.

The state’s attorney general, through his regulatory process, will also have an opportunity to provide clarity on various sections, as well as guidance on how businesses can properly comply. When the law and regulations are fully flushed out, the League will provide compliance information for credit unions.

Securing amendments to this law will be a major battle requiring credit union leaders to be fully engaged with their elected officials both in Sacramento and at home in-district. To prepare for this, the League is analyzing AB 375 to determine the key amendments necessary to protect credit unions and their members.

For questions, please email Courtney Jensen.

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