After Target and Home Depot breaches, small lenders object to settlements
Credit unions and others balk at settlements tied to cybercrimes that they say don’t fairly reimburse.
by: Robin Sidel
Small banks and credit unions are banding together in a bid to recover hundreds of millions of dollars in losses incurred from high-profile data breaches at Target Corp. and Home Depot Inc.
Angry at being squeezed out by bigger banks, the small institutions now are trying to upend a long-standing industry practice in which card networks Visa Inc. and MasterCard Inc. negotiate settlements with breached merchants and then distribute the proceeds to affected financial institutions.
The smaller firms say the process favors the big banks, even though the larger institutions can more easily absorb the cost of such incidents, including issuing new cards.continue reading »