Testifying at a special joint informational hearing of the Assembly Judiciary and Banking and Finance Committees on personal data this afternoon, California Credit Union League President and CEO Diana R. Dykstra urged legislators to take action to reduce consumer credit data breaches.
Noting the recent Target credit card data breach has cost the nation's credit unions more than $30 million before fraud costs were taken into account, Dykstra reported that a total of 4.6 million cards were reissued by credit unions at an average cost of $5.68 per affected card. The state's credit unions have been swarmed by consumer calls about their personal data, requiring the non-profit, member-owned organizations to absorb millions in additional costs.
Dykstra urged the panel to incentivize retailers and third parties they contract with to better protect consumer data with tougher laws. She referred to stricter laws in other states that shift the liability and levy penalties onto retailers responsible for data breaches.
"Where California has stopped, some other states have kept going to address the inequities and lack of responsibility that currently exist in the system," she noted. "Retailers have no real security standards, no financial responsibility when a breach occurs and no mandate to notify the public and hinder the financial institutions’ ability to inform the consumer where the breach occurred. Unfortunately, both state and federal laws, as they exist today, allow merchants to abandon that responsibility, leaving consumers exposed."
Dykstra said there are 46 states with disparate laws enacted to reduce data breaches. Nevada, Washington, and Minnesota are among the states that have stricter laws than California.
Co-chaired by Assemblymen Roger Dickinson (D-Sacramento) and Robert Wieckowski (D- Fremont), the special joint committee information hearing focused on ways to prevent future personal data breaches. In addition to Dykstra, representatives from the banking industry, consumer groups, retailers, and credit card industries also testified.
About the California Credit Union League: With headquarters in Ontario, CA, the California Credit Union League is the trade association representing the interests of more than 400 credit unions in California and Nevada, and their 10 million members. For more information, go to www.ccul.org.