WASHINGTON (9/30/14)--The presidents of credit union leagues from Alabama, Florida, Massachusetts, New Hampshire and Rhode Island have echoed concerns of the Credit Union National Association in calling for retailers to take responsibility for the costs of data breaches.
Speaking to The New Hampshire Union Leader, Paul Gentile, president/CEO of the Massachusetts, New Hampshire and Rhode Island Credit Union Leagues, called for retailers to take responsibility for the costs borne by financial institutions when such breaches occur.
"They should lose money. They lost their customer data. They're losing money [in sales] because of bad business, not protecting their systems," Gentile told the publication. "Credit unions are impacted for nothing that they did. Their systems are not breached."
The same article in The New Hampshire Union Leader estimated that the Target breach alone caused New Hampshire credit unions to reissue 25,493 debit cards and 2,911 credit cards, at a cost of $5.10 per card, a total of $144,862. That number does not take into account the cost of fraudulent charges.
Patrick La Pine, president/CEO of the League of Southeastern Credit Unions, cited a CUNA survey in his editorial that ran in the Sept. 28 edition of The Miami Herald. CUNA's survey indicated the target data breach cost Florida credit unions more than $1.5 million.
"If the Home Depot breach is larger, you can see that credit unions will have considerable expense on a breach that they did not cause," he wrote. "The merchant does not incur any of these costs and, ultimately, the costs are passed along to consumers."
La Pine, who was also featured in The Gainesville Sun last week, cited a lack of data security standards for merchants as a primary reason for so many breaches.
"Financial institutions, including credit unions, are subject to high data protection standards by law while merchants are not subject to federal data protection standards; there is no merchant financial accountability," he wrote.
CUNA's survey results from all states led to an estimate that the total cost to credit unions is an estimated $30.6 million, including reissuing 4.6 million credit and debit cards, as a result of the Target breach.
Use the resource link below for News Now coverage of CUNA's response to the data breaches.