Credit unions want congressional data breach working group

Credit unions want Congress to create a bipartisan and bicameral working group to address the ongoing rash of data breaches.

Such a working group could be tasked “with developing legislative proposals to help prevent the massive data breaches that have exposed tens of millions of consumer debit and credit cards to fraudulent activity in recent months,” said the National Association of Federal Credit Unions (NAFCU), the nation’s top credit union trade group, in a letter sent late Wednesday to party leaders in both chambers of Congress.

{mosads}Data breaches at large companies including Target, Home Depot and Sony have raised public awareness of the issue.

The letter comes on the heels of the White House this week unveiling its own legislative proposal for a data breach notification and data security standards bill. The administration wants to require breached companies to notify customers within 30 days.

Shortly after the announcement, Sen. Bill Nelson (D-Fla.), the Senate Commerce Committee’s ranking member, said he was in the final stages of drafting a bill that dovetails with the White House proposal. Nelson’s measure would also require companies file a report to the government on data breaches “of a certain magnitude” and task the Federal Trade Commission with creating national data security standards.

“Data breaches in both the private and public sectors have the ability to cause irreparable harm to consumers everywhere,” the NAFCU said. Fallout from a data breach “can involve fraudulent account activity, working to repair credit score damage, and even identity theft.”

With the enormous costs following a data breach, financial firms and retailers have been fighting over who should foot the bill. Banks and credit unions argue they should be reimbursed for reissuing credit cards and covering fraudulent charges. Retailers counter they too bear significant costs following data breaches, and are often simply victims of cyber crime.

Both sides have called on Congress to move on data breach legislation.

“Credit unions are on the front lines assisting their members in the wake of ongoing data breaches and have a unique understanding of how detrimental such data breaches can be to consumers and small financial service providers,” the NAFCU said in its letter.