Massachusetts Tweaks Its Data Security Regs


The Commonwealth of Massachusetts, home of the infamous 2007 TJX data security breach, is the first state to require detailed regulation over how personal data is secured. As an incubator of a new kind of law, it has found that getting the regs right is no easy task. The regs have been revised once already, and the deadline for compliance has been extended once before.

Our friend from her FTC days, Barbara Anthony, now Massachusetts Undersecretary of the Office of Consumer Affairs and Business Regulation, took up her post this year, and heard various concerns expressed by many small businesses and others about the effect of even the revised regs. So, yesterday she announced that a second revision to the Massachusetts data security regulations will occur, and that the original compliance deadline of January 1, 2010 will be extended again, this time to March 1, 2010. The regulations now will have a “risk-based approach”, which is intended to make it easier for small businesses that may not handle a lot of personal information about customers. Several specific provisions required to be included in a business’s Written Information Security Program have been removed from the regulation and are intended as guidance only. The scope of the regulations was revised to cover “persons who own or license personal information,” removing previous regulatory language related to those that “store or maintain personal information”. (Thus, if a business simply uses swipe technology for credit cards only, and does not have actual custody or control over the personal information, then a business does not own or license personal information with respect to that data. Still, Payment Card Industry (PCI) standards would have to be observed.) The encryption definition was amended to be technology neutral and, in addition, technical feasibility will apply to all computer security requirements.

As to portable devices, only those that contain personal information of customers or employees need to be protected and only where “technically feasible”. And as to back-up tapes, there is a requirement to encrypt backup tapes on a prospective basis, but with respect to the transport of a backup tape from storage, only if it is technically feasible to encrypt must one do so prior to the transfer. If it is not technically feasible and there is sensitive personal information on the tapes, the regs suggest that using an armored car service (rather than an ordinary courier) would be in order.

Getting granular is hard, as the regulators in Mass. have found, but kudos to them for trying. Interested parties will have another opportunity to weigh in on this round of revisions at a public hearing in Boston on September 22d and written comments will be accepted until September 25th. For more details, click here.

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