WASHINGTON—The Credit Card Competition Act brings many cybersecurity concerns, CUNA said in a to members of Congress.
In its letter, CUNA Deputy Chief Advocacy Officer Jason Stverak stated that interchange fees cover fraud detection, theft protection and card replacements and other costs for “pennies” on the dollar.
“Every year, consumers spend $6.7 trillion using their credit and debit cards,” Stverak wrote. “Transaction databases are a treasure trove of information and a constant target for cyber thieves and dark web data merchants. And now big box retailers want Congress to lessen their data security burden when it takes significant investment and constant vigilance to protect consumer data.”
The Credit Card Competition Act is currently before Congress after failing to pass the prior Congress. It is strongly supported by the nation’s retailers.
Study Highlighted
He also highlighted CUNA and the American Association of Credit Union League’s recent study on interchange regulations, which suggested:
- With rare exceptions, data shows that merchants show little interest in stemming the tide of “rampant” data breaches that lead to fraud
- Less secure government-mandated payment routing would lead to the loss of expansive liability protection from fraudulent transactions on their cards
‘Threats to Security’
“The proposed changes to the credit card system threaten consumer data security and privacy as well as the availability of much needed credit for consumers. The legislation contains no requirement for merchants to protect consumers’ data, allowing them to pick a routing system based on cost without consideration of security,” Stverak wrote. “Credit unions urge you to oppose S. 1838 /H.R. 3881 or any legislation affecting the security and efficiency of the interchange system.”
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