From the Top

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Securing Data Security

By John H. Buhrmaster

It wasn’t too long ago when consumers would stand at the checkout, open up their wallets, take out their credit cards, hand it to the cashier and think nothing of it. Why? Because why would you? You simply swipe the card, sign and go on your merry way with a few bags in tow. It was that simple.

Well, it was that simple until news headlines started surfacing. The story was out—just in time for the holidays. On Dec. 19, 2013, Target Corp. announced that approximately 40 million credit and debit card accounts may have been impacted between Nov. 27 and Dec. 15. And, just after the start of the new year on Jan. 10, the Target investigation had determined that the stolen information included names, mailing addresses, phone numbers or email addresses for up to 70 million individuals. And then the very next day press stories noted that Neiman Marcus was also involved in a data breach similar to Target. Would the news ever end?

Then came the blame game. On Jan. 21, the National Retail Federation wrote a letter to Congress placing blame for the data breaches on the banks. ICBA was the first to speak out—hitting back with all its might. In a press statement, ICBA’s President and CEO Camden Fine said that the NRF should focus its attention on responding to the harm that security breaches at several retailers have done to consumers and their financial institutions, and that it was the retailers and their processors—not banks—that are responsible for the systems in their stores that process payment cards. (For more, read the feature “Closing the Breach”)

I and other community bankers were glad to see ICBA waste no time in hitting back. This data breach was a huge issue for us and our customers. ICBA estimated in February that community banks had already reissued more than four million credit and debit cards at a total reissuance cost of more than $40 million following recent data breaches at major retailers. That’s not pocket change. That’s money that should have gone back into our communities in the form of loans—not into reissuing cards. 

As a community banker who is passionate about the payments space, I have made this issue a priority and will continue to do so during my tenure as chairman. More needs to be done to protect consumers and the community banks that serve them when a data breach occurs.

While the banking and retail industries have come together in a partnership to help solve these critical cybersecurity issues, please know that ICBA is there every step of the way. We are at the table. Our goal is your goal—we want community banks and their customers to be protected in all of this. And we want consumers to once again be able to stand at the checkout line, open their wallets, take out their cards, and swipe, sign and be on their way without giving it another thought.