AUGUSTA, Maine (3/11/13)--The Maine Credit Union League and representatives from Maine's credit unions recently testified on two bills about breach notices and student-loan insurance bills, before two separate state legislative committees in Augusta.
L.D. 158 requires that notice of a security breach must be made no later than 30 days after discovery of the breach to residents affected by the breach. It also would double the financial penalties for a civil violation.
Rebekah Higgins, assistant vice president of card services for Synergent, testified Feb. 28 before the Insurance and Financial Services Committee on behalf of the Maine league, which opposes the bill (Weekly Update March 8).
"The requirement to force notification of the breach within 30 days of discovering the breach might have the effect of compromising an ongoing investigation by law enforcement officials," Higgins testified. "It is for this very reason that federal law allows for notification to be delayed. In at least two recent larger breaches which impacted our members, we were asked by the Secret Service not to disclose the activity pending their vigorous efforts to identify the hackers."
The exception in state law that allows credit unions to only have to comply with federal law, as long as federal law is at least as protective as state law, also was pointed out by Higgins. "We believe this bill would repeal that exception and add additional burden on to credit unions," she explained.
Also, the Maine league and two credit union representatives testified Feb. 28 on L.D. 351, which would modify the Finance Authority of Maine's (FAME) Higher Education Loan Program to say that FAME may provide loan insurance on supplemental student loans.
The Maine league and several credit unions have been working with FAME on the legislation during the past year. Quincy Hentzel, league director of governmental affairs; Joe Gervais, Orono-based University CU's executive vice president; and Kyle Casburn, president/CEO of Seaboard FCU in Bucksport, provided testimony supporting the legislation to the Education Committee.
At the work session on Wednesday, the committee unanimously voted the bill Ought To Pass.
On the national level, the Credit Union National Association is collecting information from credit unions, concerning their activities in the student lending arena (News Now Feb. 26). The Consumer Financial Protection Bureau is in the process of gathering information from the public so it can develop options for policymakers to make the repayment of student loans easier for borrowers who are financially struggling (News Now Feb. 22).
Student loan debt surpassed $1 trillion in 2012, and exceeds credit card debt as the biggest source of consumer debt in the U.S.