CU Insight

(October 2, 2014) — A campaign aimed at stopping data breaches – featuring a new website that allows consumers to take action and urge Congress to step in and hold merchants accountable for data violations – is announced today by Credit Union National Association (CUNA) president and CEO Jim Nussle.

CUNA’s StopTheDataBreaches.com urges legislative action on merchant-associated data breaches and highlights the impact these have on credit unions. Credit unions are held to strict data standards under the Gramm-Leach-Bliley Act, and CUNA is urging Congress to hold merchants to the same standards which will force retailers to protect consumer data and protect consumers from identity theft and financial fraud. The Identity Theft Resource Center estimates over 500 data security breaches have occurred in 2014, exposing over 75 million data records.

When data breaches occur due to poor merchant data protection, merchants bear no costs to issue consumers new credit and debit cards, or to cover fraudulent charges. Additionally, when credit unions reissue compromised cards, under current rules credit unions are not permitted to reveal the reason for the reissuance, leaving the impression among many credit union members that it was the credit union that allowed the data to be compromised.

“Credit unions block card usage and issue cards with new numbers quickly after breaches to prevent fraud,” said CUNA president and CEO Jim Nussle. “When fraud occurs, credit unions work with their members to remove the fraudulent charges and help members keep their hard-earned money. When the merchants cause a data breach, they just pass along all the costs of their poor security to financial institutions. After the Target data breach earlier this year, credit unions reissued approximately 4.6 million credit and debit cards at a cost of $30.6 million. Expenses like this are making it harder for credit unions around the country to offer credit cards with low interest rates and free debit cards with checking accounts. It’s time to tell Congress we need to stop the data breaches by mandating consistent data security standards for merchants and raise the impact they have on credit unions and our members.”

CUNA has been actively advocating changes to federal law to address this issue in a variety of ways. Most recently, following one of the largest merchant breaches in history at Home Depot, CUNA sent a letter to the president requesting that the administration establish a Cybersecurity Council. CUNA has also provided the first quantitative analysis of the costs of a data breach on credit unions; canvassed Capitol Hill to urge lawmakers to force merchants to meet strict data security standards, and; called on merchant groups to work with financial institutions to implement solutions.

CUNA’s advocacy Twitter account (@CUNAadvocacy) and Facebook page will also provide updates on data breaches and cybersecurity issues. CUNA asks consumers to use the social media hashtag #StoptheBreaches to spread the message.

Tags: Credit Unions, CUNA, data breaches