The bill, the Consumer Notification and Financial Data Protection Act of 2005, is similar to others proposed this year in Congress after a series of widely publicized data breaches.
Introduced by U.S. Reps. Steven LaTourette (R-Ohio) and Darlene Hooley (D-Ore.), the legislation also would require companies to provide one year of free credit monitoring services when a breach puts consumers at risk of identity theft.
In addition, the bill also would require businesses to maintain policies and procedures to protect sensitive financial personal information.
"We've got a serious problem where folks are hacking into store and credit-card records and getting a front-row view of the financial data of millions of consumers," LaTourette said in a statement. "Sadly, consumers are often the last to know if their data has been compromised."
Last month, Sen. Arlen Specter (R-Pa.) and Sen. Patrick Leahy (D-Vt.) introduced broad legislation designed to increase protection of consumers' private data.