Target Breach Kicks Off Round of Probes, Bills and Quarrels
Published March 17, 2014 11:59 AM
1 Min Read
A Target on Its Back
When the Target Corp. data breach was reported in December, soon followed by retailers Neiman Marcus and Michaels, public officials pounced and the financial industry took a hard look in the mirror. Federal and state officials immediately launched investigations and held hearings. Meanwhile, the industry questioned how well its electronic systems were protected, and banks and retailers squabbled. Here's a look at how government and business leaders responded to the latest scourge of computer data breaches.
Image: Bloomberg News
NY's Top Lawyer Tees Off
Less than a month after the Target breach was first reported, New York's attorney general, Eric Schneiderman, issued harsh words for the retailer, saying his state's consumers "expect and deserve better" and that he would participate in a national investigation.
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Congress Weighs In
A few days later, the bipartisan Data Security Act was re-introduced in Congress, co-sponsored by Sens. Tom Carper, D-Del., and Roy Blunt, R-Mo. It would require retailers and government agencies to protect customer data and alert consumers more quickly if their information was compromised.
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Banks, Merchants Point Fingers
While elected officials staked out their positions, banks and retailers drew their own lines in the sand. First, the National Retail Federation published a Jan. 21 letter that blamed the banks for hacking outbreak. The next day, Independent Community Bankers of America CEO Camden Fine fired back, saying "retailers and their processors-not banks-are responsible."
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Time for the Stripe to Go?
While banks and retailers tried to assign blame, other industry players started asking why the U.S. payments system did not adopt technologies thought to provide better protection against hackers, namely dumping the magnetic stripe on cards in favor of chip-and-PIN systems.
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Banks to Retailers: Step it Up
The head of the trade group for the 100 largest banks and other financial companies, Tim Pawlenty, called for Congress to force retailers to adopt tougher new security requirements. His comments suggested that retailers haven't done enough and that "retailer breaches will increase financial institution costs to monitor fraud."
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Congressional Hearing
At a Congressional hearing held in February, bankers and lawmakers discussed whether to adopt Europe's chip technology to combat data breaches. At the same hearing, an executive at the $13 billion-asset FirstBank in Lakewood, Colo., said Congress shouldn't get involved.
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California Moves First
California lawmakers get in on the action, as they begin considering ways to give more protections to consumers' card usage. The movement could lead to legislative changes in other states, as California is often a first mover in consumer protections.
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Schadenfreude in Europe
While American leaders wrung their hands over the data breaches, European officials sat back and chuckled. That's largely because Europe has already adopted EMV-chip cards, which are more secure than magnetic stripe cards.
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