Cyber Security

Data Security Act “carves out” financial institutions from responsibility in current system

national retail federationThe National Retail Federation issued a statement on the Data Security Act recently introduced by Sens. Tom Carper (D-Del.) and Roy Blunt (R-Mo.), saying the legislation exempts financial institutions from responsibility in maintaining the “currently-flawed system.”

“While the Data Security bill aims to protect consumer data, the bill carves out banks, card companies and others financial institutions, the very parties who have been primarily responsible for sustaining the currently-flawed system,” NRF Senior Vice President for Government Relations David French said.

The legislation, which has received backing from major financial services trade groups like the National Association of Federal Credit Unions, would subject all U.S. entities that collect or store sensitive consumer data to data security standards.

The NRF said protecting consumers is the retail industry’s “top priority,” adding that retailers will partner with stakeholders to update magnetic-stripe point-of-sale systems with more secure PIN and chip-based technology.

“PIN-and-chip cards are widely used across the globe, and it’s time for the bankcard industry in the United States to adopt that technology to better protect our consumers,” French said. “We must transition away from 1960s technology and adopt a 21st century system that will help reduce and prevent fraud and protect customers from the threat posed by sophisticated cybercriminals, hackers and data thieves.”

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