Stephen Adams, the former New England small-business advocate for the U.S. Small Business Administration, wrote an op-ed piece in today’s Boston Business Journal discussing our amended Data Security regulations. Give it a read:
A dramatic new economic development effort was launched last week by the Patrick administration but received scant attention. The new initiative will save Massachusetts small businesses hundreds of millions of dollars each year. Yet it was accomplished without ceding a dime of tax revenue, expending a dollar of government subsidy or compromising one inch on consumer or employee protections.
The author of this economic boon is neither an economist or economic development professional. Rather, she is a lawyer and consumer advocate — Undersecretary for Consumer Affairs and Business Regulation Barbara Anthony. She produced this major economic stimulus by rewriting state data privacy rules so that small businesses could comply without taking on unnecessary costs.
It is true that these gains come from scaling back costly new regulations imposed by the Patrick administration in the first place. But this case demonstrates that state government can produce strong economic benefits simply by being attentive to the way its rules and regulations hit small businesses and by being thoughtful in their design.
Late last year the Office of Consumer Affairs and Business Regulation, in response to a legislative mandate to protect consumer and employee data, adopted the most demanding data security regulations in the nation.
Moreover, the onerous requirements would be applied equally to all businesses. That meant that the smallest mom-and-pop would be required to adopt the same data security measures as the largest financial services firms.
OCABR staff had estimated that the new rules would cost a 10-person firm $3,000 in upfront costs and another $6,000 every year. This is a dramatic underestimate, according to some data security experts, who placed the upfront small-business costs at nearly $40,000.
Enter Barbara Anthony. Anthony and her team rewrote the rules to take into consideration the size of a business and the amount of personal information it handles. The revisions require “safeguards that are appropriate to the size, scope and type of business handling the information; the amount of resources available to the business; the amount of stored data; and the need for security and confidentiality of both consumer and employee information.” By designing the requirements around a company’s ability to comply, the revised rules will sharply reduce the cost to small firms and increase compliance.
The news is not all good. The revised regulations will still add a new layer of state costs and requirements to existing Federal data security rules. Nonetheless, if Anthony’s accomplishment can be repeated across the rest of state government, the economic benefit to the commonwealth will be enormous.
Stephen Adams was the New England small-business advocate for the U.S. Small Business Administration from 2005 to 2009.
Turning up the heat on utility scams posted on Nov 30
As the weather gets colder scams targeting utility customers may increase as consumers balance the costs of heating their homes with the need for warmth. Some scammers pretend to represent a major energy provider and claim that they will cut your electrical power, assess …Continue Reading Turning up the heat on utility scams
Holiday Shopping Tips: Bait and Switch posted on Nov 30
Most consumers have heard of the term “bait and switch,” but may not be aware when it happens to them. A sales representative may try to convince you to buy a different item than the one you came for, which may simply seem like a …Continue Reading Holiday Shopping Tips: Bait and Switch
Holiday Shopping Series: Cyber Monday posted on Nov 25
The Holiday Season is upon us. Over the next few weeks as the holiday music plays and decorations are put up, consumers will be flocking to malls and websites hoping to purchase the perfect gift for their family member or friend. “Cyber Monday” refers to …Continue Reading Holiday Shopping Series: Cyber Monday