The Equifax breach continues to reverberate among consumers, credit unions and Congress; the illegal access of information on 143 million consumers and payment card data of 200,000 plus consumers is significant, and has both financial and political implications. It is a topic garnering intense Congressional attention, with House Financial Services Committee Chairman U.S. Rep. Jeb Hensarling (R-TX) in the press last week calling for a national standard for consumer breach notification. And in Congress last week alone, there were four separate hearings regarding the Equifax data breach in which credit unions, Leagues and CUNA were heavily engaged; this work will continue.
Strengthening data security standards among merchants has been a consistent talking point among credit unions that travel to Washington, D.C., for Hike the Hill – one of the key issues Georgia credit union leaders pursued with Congress when they were on the Hill in September. However, it is worth noting that Equifax is not held to the lower merchant standard, but rather, the same standard as credit unions and other financial institutions. As such, CUNA has been pushing Congress to ensure that consumers affected by the Equifax data breach are notified and protected. However, in the process to create a solution, it will be important for the industry to be engaged closely to ensure that Congress does not create regulatory nightmares in their search for a solution, but does create meaningful data security reform for consumers.
Consumers themselves are on alert, scouring their accounts (and for some individuals, numb to the breaches, until fraud hits). In addition to the activity in Congress, a lawsuit driven by CUNA discussed in the October 3rd webinar against Equifax was filed on October 4th as credit unions (and other financial institutions) will feel the impact of long-term costs resulting from the breach. These costs include the expense of canceling and reissuing compromised cards, reimbursing members for fraudulent charges, the need to increase fraud monitoring, taking action to mitigate identity theft, sustaining reputational harm and notifying consumers of potential fraudulent activity. And like the political ramifications and efforts of credit unions in Congress, these costs will continue on the horizon for the foreseeable future as consumers and credit unions grapple with the aftermath of the breach.
