Legislative Panel Approves CU-Backed Cards Bill

ST. PAUL, Minn. – The House Labor and Consumer Protection Committee approved a bill yesterday that will enact MasterCard’s and Visa’s credit card security rules as law and require parties responsible for a data breach to pay the costs for affected credit unions and other parties. The credit union-backed bill, seen as a model for a national law, must now be voted by at least two additional House committees. The bill would enact into law the Payment Card Industry data security standards which require, among other things, that merchants destroy credit card information after they have completed transactions. The vote came after two credit union CEOs, Bill Raker of US FCU and Lynn Kothe of North Memorial FCU, testified that the storing of customer data, in violation of the PCI rules, is the major cause of data breaches. The bill would also require retailers, cards processors and other found liable for data breaches to pay costs for reissuance of cards and customer/member notification. Raker told lawmakers the recent breach at TJ Maxx compromised 4,500 member accounts and cost his credit union $22,700 to reissue cards and another $47,000 in fraud-related losses.