WASHINGTON (1/22/14)--Credit unions and their members--not the retailers--will end up paying the costs for data security breaches such as those recently at Target and Neiman Marcus, Credit Union National Association President/CEO Bill Cheney emphasized Tuesday during a live appearance on a nationally broadcast Bloomberg Radio program.
Appearing on "The Hays Advantage" with host Kathleen Hays, the credit union leader told the national radio audience that, contrary to popular understanding, the expenses for reissuing cards are not and will not be reimbursed by Target. Rather, he noted, merchants are rarely held accountable for reimbursing financial institutions for the cost that the data breach has burdened them with and, in the case of credit unions, burdened their members.
Cheney noted that last week in Target's own admission of the breach, no commitment was made to avoid leaving card issuers, such as credit unions, responsible for costs of dealing with the breach. He added that merchants must be held accountable for these security breakdowns.
Cheney added that CUNA and credit unions are asking the U.S. Congress to address the lack of retailer accountability, and are supportive of legislation to replace various state-based data protection laws with one single, federal standard.