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Pewaukee, Wis. – Kim Sponem, President & CEO of Summit Credit Union in Madison, testified yesterday before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit.
Her remarks, on behalf of the Credit Union National Association, noted financial institutions foot the bill for merchant data breaches and as member-owned cooperatives, it’s really a cost to credit unions’ 110 million members.
Sponem detailed the anxiety, inconvenience and costs that consumers experience when their personal information has been compromised, as well as the steps credit unions take in the wake of a breach.
Data breaches alone cost Summit Credit Union more than $1 million in 2017, Sponem said.
Breach-related costs include blocking transactions, replacing plastic cards, increasing staff at call centers, monitoring accounts, assisting members and absorbing fraud-related losses. The damage of data breaches is often compounded when breaches remain hidden, Sponem testified.
She outlined the steps her credit union takes to ensure their own data security meets national standards set for financial institutions, but noted that the same requirements don’t apply to merchants. Without accountability or consequences, there is no incentive for merchants holding consumers’ personal information to go to greater lengths to protect it.
Sponem called for strong national standards that provide accountability to all parties holding personal information, require them to communicate breaches in a timely manner and hold negligent companies responsible to bear the costs.
Sponem’s appearance before Congress is one way credit unions work to protect their members’ interests.
“Kim knocked it out of the park yesterday,” said League President & CEO Brett Thompson. “Without strong national data security standards, breaches will become more frequent and American’s wallets will continue to be drained. Wisconsin’s 3 million credit union members should know their credit unions are dedicated to protecting their personal data and financial interests.”