Jan 20 - The Independent Community Bankers of America has called on Congress to ensure that parties that suffer a data breach are required to bear responsibility for fraud losses and restitution to affected parties. In letters to members of the House and Senate, ICBA wrote that compromises at large retailers such as Target and Neiman Marcus can shake public confidence while community banks have been working to protect their customers from adverse consequences of the breaches.
“Community banks have a critical stake in the security of consumer data and have worked aggressively to protect their customers following the recent security breaches at Target, Neiman Marcus and other retailers,” ICBA President and CEO Camden R. Fine said. “Safeguarding customer information is central to maintaining public trust, and Congress should take action to mitigate the negative impact of security breaches on their victims.”
In its letter to lawmakers, ICBA urged Congress to allocate liability to incentivize maximum security. The association wrote that the party that suffers a data breach — whether it is a retailer, data broker, financial institution, or other entity—should be responsible for fraud losses and the costs of mitigation and restitution when consumer information is compromised. Allocating responsibility with the party that is best positioned to secure consumer data will provide a strong incentive to do so effectively, the association wrote.
Additionally, ICBA called for a single national standard to replace the patchwork of state laws on data security breaches that fosters confusion and puts consumers at risk. The association said it strongly supports notification to allow consumers to take steps to protect themselves from identity theft or fraud resulting from data breaches.
Community banks have been working to protect their customers from the retail security breaches. They are informing customers about community banks’ multiple layers of security protection, monitoring customer accounts for fraudulent activity, reissuing cards to customers as appropriate and educating customers on how to avoid fraud.
ICBA will continue working with community banks to support consumer protection and confidence while advocating policies that maximize incentives to secure consumer data. ICBA’s letter to Congress and more information on the breach is available at www.icba.org.