March 05, 2014

Lawmakers press national data standards

March 6, 2014 – Lawmakers in a House Financial Services subcommittee hearing Wednesday reiterated their concerns about increased data breaches and pressed anew on the need for national data security and breach notification requirements.

Figuring large in the background was news of the resignation of the chief information officer at Target Corporation, whose data breach over the holiday shopping period affected credit card account data of 40 million consumers and the personal information of as many as 70 million more.

Rep. Shelley Moore Capito chaired yesterday's hearing.

Wednesday's hearing was held by the House Financial Institutions Subcommittee on Financial Institutions and Consumer Credit, chaired by panel Chairman Shelley Moore Capito, R-W.Va.

Capito read a letter submitted by NAFCU into the hearing record. That letter reiterated NAFCU's call for action on national data protection standards for merchants similar to those required of credit unions and other financial institutions under the Gramm-Leach-Bliley Act.

Also during the hearing:

  • Rep. David Scott, D-Ga., asked witnesses whether retailers should be held to the same standards and level of accountability as are financial institutions. William Noonan, a deputy special agent in charge with the U.S. Secret Service, replied that industries with lower standards warrant a closer look.
  • Rep. Spencer Bachus, R-Ala., reiterated his concern that moving to chip-and-PIN technology would not be a complete solution to the growing incidence of data breaches. It wouldn't have prevented the Target breach, he said.
  • Capito was critical of the fact Target had considered new technology some years ago but didn't move in that direction over concerns it would slow down the check-out process in stores.
  • Rep. Carolyn Maloney, D-N.Y., who said she had been a victim of identity theft herself, said breach notification is critical for consumers as well as financial institutions.

The National Retail Federation didn't have a witness at Wednesday's hearing, but it did submit a statement for the record and is blanketing Capitol Hill area publications with ads touting new card technology over national standards. NAFCU responded.