Financial Institutions Team Up On Data Security Push

Seven trade associations representing banks and credit unions have joined forces to call on Congress to put in place stricter cybersecurity standards to prevent more data breaches.

According to a report in American Banker – citing a letter sent to U.S. Reps. Greg Walden, R-Oregon, and Bob Latta, R-Ohio, who chair the House Committee on Energy and Commerce and the Subcommittee on Digital Commerce and Consumer Protection – the trade associations demanded that lawmakers put in force stronger national data security standards and requirements about notifying the public when a breach does occur. With the tax reform about to be signed by President Donald Trump, this move helps to ensure that lawmakers can now focus on protecting businesses and consumers from cyberattacks.

According to the American Banker, the letter was signed by the Credit Union National Association, National Association of Federally Insured Credit Unions, American Bankers Association, Consumer Bankers Association, Independent Community Bankers of America, Financial Services Roundtable and The Clearing House.

“Stopping breaches is critical for consumers, and also important to our members, who often have the closest relationships with those affected,” the trade groups wrote in the letter. “Data breaches impose significant costs on financial institutions of all sizes, because our first priority is to protect consumers and ensure that they have no liability for fraud that typically follows a breach. Our members provide relief to victims of breaches, regardless of where the breach occurs.”

The letter points to the Data Security Act, which was unanimously supported by the financial industry in last year’s Congress and outlines three goals to protect online data. Under the legislation, all entities would have to protect sensitive personal and financial data, would have to notify consumers and impacted people in a timely manner, and must ensure companies are complying by oversight on the part of state and federal governments.

“Any legislation enacted into law must ensure that all entities that handle consumers’ sensitive financial data have in place a robust – yet flexible and scalable – process to protect data, which must be coupled with effective oversight and enforcement procedures to ensure accountability and compliance,” the letter also stated.