SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Privacy Breach 
Notification Act of 2005''.

SEC. 2. TIMELY NOTIFICATION OF UNAUTHORIZED ACCESS TO PERSONAL 
              FINANCIAL INFORMATION.

    Subtitle B of title V of the Gramm-Leach-Bliley Act (15 U.S.C. 6821 
et seq.) is amended--
            (1) by redesignating sections 526 and 527 as sections 528 
        and 529, respectively; and
            (2) by inserting after section 525 the following:

``SEC. 526. NOTIFICATION TO CUSTOMERS OF UNAUTHORIZED ACCESS TO 
              PERSONAL FINANCIAL INFORMATION.

    ``(a) Definitions.--In this section:
            ``(1) Breach.--The term `breach'--
                    ``(A) means the unauthorized acquisition, or loss, 
                of computerized data or paper records which compromises 
                the security, confidentiality, or integrity of personal 
                financial information maintained by or on behalf of a 
                financial institution; and
                    ``(B) does not include a good faith acquisition of 
                personal financial information by an employee or agent 
                of a financial institution for a business purpose of 
                the institution, if the personal financial information 
                is not subject to further unauthorized disclosure.
            ``(2) Personal financial information.--The term `personal 
        financial information' means the last name of an individual in 
        combination with any 1 or more of the following data elements, 
        when either the name or the data elements are not encrypted:
                    ``(A) Social security number.
                    ``(B) Driver's license number or State 
                identification number.
                    ``(C) Account number, credit or debit card number, 
                in combination with any required security code, access 
                code, or password that would permit access to the 
                financial account of an individual.
    ``(b) Notification to Customers Relating to Unauthorized Access of 
Personal Financial Information.--
            ``(1) Financial institution requirement.--In any case in 
        which there has been a breach of personal financial information 
        at a financial institution, or such a breach is reasonably 
        believed to have occurred, the financial institution shall 
        promptly notify--
                    ``(A) each customer affected by the violation or 
                suspected violation;
                    ``(B) each consumer reporting agency described in 
                section 603(p) of the Fair Credit Reporting Act (15 
                U.S.C. 1681a); and
                    ``(C) appropriate law enforcement agencies, in any 
                case in which the financial institution has reason to 
                believe that the breach or suspected breach affects a 
                large number of customers, including as described in 
                subsection (e)(1)(C), subject to regulations of the 
                Federal Trade Commission.
            ``(2) Other entities.--For purposes of paragraph (1), any 
        person that maintains personal financial information for or on 
        behalf of a financial institution shall promptly notify the 
        financial institution of any case in which such customer 
        information has been, or is reasonably believed to have been, 
        breached.
    ``(c) Timeliness of Notification.--Notification required by this 
section shall be made--
            ``(1) promptly and without unreasonable delay, upon 
        discovery of the breach or suspected breach; and
            ``(2) consistent with--
                    ``(A) the legitimate needs of law enforcement, as 
                provided in subsection (d); and
                    ``(B) any measures necessary to determine the scope 
                of the breach or restore the reasonable integrity of 
                the information security system of the financial 
                institution.
    ``(d) Delays for Law Enforcement Purposes.--Notification required 
by this section may be delayed if a law enforcement agency determines 
that the notification would impede a criminal investigation, and in any 
such case, notification shall be made promptly after the law 
enforcement agency determines that it would not compromise the 
investigation.
    ``(e) Form of Notice.--Notification required by this section may be 
provided--
            ``(1) to a customer--
                    ``(A) in written notification;
                    ``(B) in electronic form, if the notice provided is 
                consistent with the provisions regarding electronic 
                records and signatures set forth in section 101 of the 
                Electronic Signatures in Global and National Commerce 
                Act (15 U.S.C. 7001);
                    ``(C) if the Federal Trade Commission determines 
                that the number of all customers affected by, or the 
                cost of providing notifications relating to, a single 
                breach or suspected breach would make other forms of 
                notification prohibitive, or in any case in which the 
                financial institution certifies in writing to the 
                Federal Trade Commission that it does not have 
                sufficient customer contact information to comply with 
                other forms of notification, in the form of--
                            ``(i) an e-mail notice, if the financial 
                        institution has access to an e-mail address for 
                        the affected customer that it has reason to 
                        believe is accurate;
                            ``(ii) a conspicuous posting on the 
                        Internet website of the financial institution, 
                        if the financial institution maintains such a 
                        website; or
                            ``(iii) notification through the media that 
                        a breach of personal financial information has 
                        occurred or is suspected that compromises the 
                        security, confidentiality, or integrity of 
                        customer information of the financial 
                        institution; or
                    ``(D) in such other form as the Federal Trade 
                Commission may by rule prescribe; and
            ``(2) to consumer reporting agencies and law enforcement 
        agencies (where appropriate), in such form as the Federal Trade 
        Commission may prescribe, by rule.
    ``(f) Content of Notification.--Each notification to a customer 
under subsection (b) shall include--
            ``(1) a statement that--
                    ``(A) credit reporting agencies have been notified 
                of the relevant breach or suspected breach; and
                    ``(B) the credit report and file of the customer 
                will contain a fraud alert to make creditors aware of 
                the breach or suspected breach, and to inform creditors 
                that the express authorization of the customer is 
                required for any new issuance or extension of credit 
                (in accordance with section 605(g) of the Fair Credit 
                Reporting Act); and
            ``(2) such other information as the Federal Trade 
        Commission determines is appropriate.
    ``(g) Compliance.--Notwithstanding subsection (e), a financial 
institution shall be deemed to be in compliance with this section, if--
            ``(1) the financial institution has established a 
        comprehensive information security program that is consistent 
        with the standards prescribed by the appropriate regulatory 
        body under section 501(b);
            ``(2) the financial institution notifies affected customers 
        and consumer reporting agencies in accordance with its own 
        internal information security policies in the event of a breach 
        or suspected breach of personal financial information; and
            ``(3) such internal security policies incorporate 
        notification procedures that are consistent with the 
        requirements of this section and the rules of the Federal Trade 
        Commission under this section.
    ``(h) Civil Penalties.--
            ``(1) Damages.--Any customer injured by a violation of this 
        section may institute a civil action to recover damages arising 
        from that violation.
            ``(2) Injunctions.--Actions of a financial institution in 
        violation or potential violation of this section may be 
        enjoined.
            ``(3) Cumulative effect.--The rights and remedies available 
        under this section are in addition to any other rights and 
        remedies available under applicable law.
    ``(i) Rules of Construction.--
            ``(1) In general.--Compliance with this section by a 
        financial institution shall not be construed to be a violation 
        of any provision of subtitle (A), or any other provision of 
        Federal or State law prohibiting the disclosure of financial 
        information to third parties.
            ``(2) Limitation.--Except as specifically provided in this 
        section, nothing in this section requires or authorizes a 
        financial institution to disclose information that it is 
        otherwise prohibited from disclosing under subtitle A or any 
        other provision of Federal or State law.
    ``(j) Enforcement.--The Federal Trade Commission is authorized to 
enforce compliance with this section, including the assessment of fines 
for violations of subsection (b)(1).''.

SEC. 3. EFFECTIVE DATE.

    This Act shall take effect on the expiration of the date which is 6 
months after the date of enactment of this Act.
Financial Privacy Breach Notification Act of 2005 - Amends the Gramm-Leach-Bliley Act to require a financial institution to promptly notify the following entities whenever a breach of personal information has occurred at such institution: (1) each customer affected by such breach; (2) certain consumer reporting agencies; and (3) appropriate law enforcement agencies.

Requires any person that maintains personal information for or on behalf of a financial institution to promptly notify the institution of any case in which such customer information has been breached. Prescribes notification procedures.

Authorizes a customer injured by a violation of this Act to institute a civil action to recover damages.

Authorizes the Federal Trade Commission to enforce compliance with this Act, including the assessment of fines for violations.
A bill to require financial institutions and financial service providers to notify customers of the unauthorized use of personal financial information, and for other purposes.