New York’s data security challenge

For nearly two years, a bill that would expand reporting requirements of data breaches and strengthen cybersecurity regulations for businesses has been stalled in the New York state Legislature. Referred to commonly as the SHIELD (Stop Hacks and Improve Electronic Data Security) Act, the legislation was introduced in 2017 by then-Attorney General Eric Schneiderman and sponsored by state Sen. David Carlucci and former Assemblyman Matthew Titone. It would require businesses to implement “reasonable” technical, administrative and physical security measures to protect individuals’ sensitive data, which could include information like biometric data or social security numbers. Though the effort has been picked up again by state Sen. Kevin Thomas and Assemblyman Michael DenDekker this session, the SHIELD Act has yet to progress, despite repeated calls for its passage from business and consumer interest groups.

At a panel discussion during City & State’s Digital New York Summit on Thursday, experts from both the public and private sector weighed in on how New York can do a better job of guarding against future data security threats, and whether legislation like the SHIELD Act could help in that effort. “There are certain, very basic cybersecurity things that can be done that in many cases are not being done,” said Richard Jacobs, assistant special agent-in-charge of the cyber branch at the Federal Bureau of Investigation’s New York office, mentioning fixes that could be made by businesses and government agencies. “I think just by paying attention to cybersecurity and taking it seriously and implementing some of those basic things – patches, firewalls, antivirus – and making sure that you are continuously checking those things, because things change over time, to make sure they remain effective, you can probably mitigate many, never all, but many of the problems that we encounter.”

Jacobs – joined by Tariq Habib, chief information security officer at the Metropolitan Transportation Authority, John Shegerian, co-founder and executive chairman at Electronic Recyclers International, a company specializing in the recycling of electronic waste, and moderator Albert Fox Cahn, executive director of the Surveillance Technology Oversight Project – called for these kinds of fixes in light of increased risk for cyber attacks. “One of the things that I worry about is how the United States can potentially lose the competitive advantage, over time, when intellectual property and trade secrets are stolen through cyber channels by foreign governments,” Jacobs said. “This is something that has actually started to happen, but it doesn't happen overnight, it takes many years. And that's why cyber defense is a critical part of what we need to do on the part of government or the private sector.”

Habib spoke to particular vulnerabilities in New York, which include some of the smaller government agencies that don’t have the resources to put security systems and practices in place. “If you look at larger agencies and entities, generally they have focused security programs, they do some of these things, they have processes in place to secure their data,” he said. “But most of the local and state entities are really small agencies. They have not had security-focused personnel, and they really don't have the processes in place.”

A heightened push for stronger cyber defenses has been highlighted by the passage of the General Data Protection Regulation in the European Union, a law which aims to give EU citizens more control over their personal data and what businesses can do with it. Last year, California passed a similar bill, called the California Consumer Privacy Act.

Lawmakers in New York, too, have repeatedly tried to strengthen consumer data privacy rights through the Right to Know Act – legislation that was picked up this session by state Sen. Brad Hoylman and Assemblywoman Nily Rozic. The bills would require that consumers be notified and provided with additional information when their personal data is disclosed to a third party.

“State by state and on the federal level, the laws on data regulation and privacy are going to tighten in the months and years ahead,” said Shegerian, adding that the courts are now seeing more lawsuits related to consumer data misuse or mishandling. “The liberalization of the judicial system for citizens and clients of these organizations to bring class-action and private lawsuits against these organizations is also widening on a regular basis, and it's getting much easier for citizens and clients of organizations, both public and private, to bring lawsuits if their data has been mishandled.”

Both the SHIELD Act and the Right to Know Act in New York are in committee in the state Senate and Assembly, and with only a month left in session, they may not pass this year. But, regardless of whether or not more stringent regulations are put in place, Jacobs suggested that businesses and government agencies should always be one step ahead of the law. “Regulatory compliance is not necessarily going to make you secure,” he said. “When we talk about best practices and cybersecurity, it is not about simple compliance with regulations. What you need to do is ensure that you are protected. And checking off boxes that regulations require will get you some of that, but it will not protect you fully. If you are protecting yourself properly through risk management and other types of security practices, you will likely be in compliance. But don't confuse regulations with cybersecurity, because they are not one in the same.”