March 04, 2014

NAFCU lodges data security, reg burden concerns ahead of hearings

March 5, 2014 – NAFCU yesterday sent letters ahead of two hearings today covering data security and financial regulations by two House Financial Services subcommittees.

A hearing on current efforts to protect Americans' financial information is being held today by the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. In a letter to subcommittee Chairman Shelley Moore Capito, R-W.Va., and Ranking Member Greg Meeks, D-N.Y., yesterday, NAFCU President and CEO Dan Berger discussed the importance of implementing a national data security standard and holding retailers accountable for security breaches that occur on their end. Berger noted that credit unions and other financial institutions are already held to such standards within the Gramm-Leach-Bliley Act.

Berger recommended that, in crafting legislation on data security, Congress address national standards for safekeeping information, notification to consumers and payment of breach costs by the breached entity, among other things. (Berger's letter was sent as yet another data breach report emerged, this one focusing on several merchants' online operations, including Smucker's, and putting customers' credit card data at risk.)

NAFCU also wrote ahead of a hearing by the House Financial Services Subcommittee on Oversight and Investigations covering the growth and impact of financial regulations on international competitiveness. NAFCU Vice President of Legislative Affairs Brad Thaler told subcommittee Chairman Patrick McHenry, R-N.C., and Ranking Member Al Green, D-Texas, how credit unions are struggling with the growing compliance burden under the Dodd-Frank Act.

"Credit unions didn't cause the financial crisis and shouldn't be caught in the crosshairs of regulations aimed at those entities that did," Thaler wrote. "Unfortunately, that has not been the case thus far as all credit unions are subject to rule writing authority of the new Consumer Financial Protection Bureau." He included a copy of NAFCU's five-point plan for credit union regulatory relief with the letter.