Legislators aim to replace state data privacy laws with new bill

Two data privacy proposals planned for release on Wednesday and first shared with CNBC aim to override about two dozen state regulations, establishing a unified national rule for handling user data by tech and finance companies.

The legislations — the SECURE Data Act, targeting tech firms, and the GUARD Financial Data Act, centering on financial service industries — are intended to integrate into a unified national standard. House Energy and Commerce leader Brett Guthrie, R-Ky., along with House Financial Services head French Hill, R-Ark., are supporting the initiatives, likely boosting their chances for initial voting stages scheduled for the next month.

Guthrie mentioned in a CNBC statement that the SECURE Act aims to "eliminate the perplexing mix of state regulations that disadvantage consumers and small enterprises alike." He noted it parallels certain laws already enacted by states like Kentucky.

Besides superseding state rules, the bills would permit individuals to access, modify or erase their personal information, and opt out of targeted promotions and data sales, as described in draft legislation first reviewed by CNBC.

Neither proposal would enable individuals to initiate legal actions against companies for data privacy breaches, a point Democratic legislators have advocated for in previous privacy protections.

Congress has repeatedly tried over past years to find the right equilibrium in data privacy safeguards. 

Beyond the usual Republican and Democrat discrepancies, intra-party disagreements have hindered broader backing for prior attempts. 

Two years back, an anticipated Energy and Commerce Committee vote on a data privacy measure was scrapped in the final moments after resistance from several Republicans.

Guthrie is seeking to avoid that scenario this time around. Last year, he established a task force to garner support from Republican peers and gather feedback. 

The approach is to first confirm enough Republican backing to progress the measure through committee stages, thereafter focusing on securing Democratic backing, according to committee representatives. 

The House Financial Services Committee is adopting a similar method.