Evan Schuman's StorefrontBacktalk

On September 22, the U.S. Senate Judiciary Committee pushed a data security bill—which has been bouncing around that chamber for six years—to the full Senate. The bill would create federal data security rules, including new retail data breach disclosure rules. But the bill (Personal Data Privacy and Security Act of 2011 introduced by Sen. Patrick Leahy, Dem.-VT) still suffers from many of the lengthy exceptions that it has had for years, exceptions that all but guarantee that few retailers will be required to do anything differently.

But in light of this bill’s lengthy exemptions and data breach size limits—public disclosure, for example, is only required when a breach impacts more than 5,000 people in one state—the National Retail Federation issued a statement saying it fears that with so many retailers having to report data breaches under this legislation people might get bored and start to ignore the notices. NRF dubs this scenario “notice fatigue.”

What does it say to the nation when the chief lobbying organization charged with protecting retail interests publicly trumpets the fact that it believes there will be a huge number of data breach reports if full disclosure is required? Yeah, that makes me want to go and buy stock in Wal-Mart and Walgreens right away.

Alas, NRF, fear not. The bill—which has fairly little chance of being made law without being riddled with so many more loopholes as to be meaningless—won’t likely yield many new disclosures from major chains. Let’s drill down into what the current version of the bill actually says.

To begin with, public disclosure is limited to situations where “the number of residents of such state whose sensitive personally identifiable information was, or is reasonably believed to have been, accessed or acquired by an unauthorized person exceeds 5,000.” First, it’s mathematically unlikely that we’ll be seeing thousands of such reports. Second, if we are, sorry, but those chains need to disclose. And if we do indeed have thousands of such retail breach disclosures every year, we have a much bigger problem than consumers getting bored with such notices. Some of them might even get a little angry. (Not that American consumers will do anything about it. We’re such an apathetic, lazy lot.)

The bill also allows for individual consumer notifications in breaches with fewer than 5,000 victims, and it doesn’t set a limit on those notifications. With them, though, the time restrictions are impressively soft.

The bill allows for delays for any “time necessary to determine the scope of the security breach, prevent further disclosures, conduct the risk assessment and restore the reasonable integrity of the system,” among other things.