updated 02/21/14 03:39 PM
State Lawmakers Hear CU Perspective
Two state legislature informational hearings in California on the importance of card data security were in focus over the past two weeks, giving credit union leaders an opportunity to represent their industry and voice an important perspective as lawmakers review the issue.
L-R: Donna Bland, CEO of Golden 1 CU; Diana Dykstra, President and CEO of the California and Nevada Credit Union Leagues; and Lily Lo, CEO of Northeast Community FCU
California Senate Committees
Golden 1 CU CEO Donna Bland will testify Feb. 25 in a joint informational hearing before the California Senate Judiciary Committee and Banking and Finance Committee, entitled “Beyond The Breach: Protecting Consumers’ Personal Information in the Retail Environment.”
The Sacramento hearing will feature 18 experts from the industry, including representatives from major card networks, retailers, community banks, and several others involved in the payments network and processing system.
Bland will discuss credit unions’ response to large data breaches taking place in recent months, and how credit unions acted to protect their members.
California Assembly Committees
Testifying in a joint informational hearing on Feb. 18 before the California Assembly’s Judiciary Committee and Banking and Finance Committee, California and Nevada Credit Union Leagues President and CEO Diana Dykstra urged legislators to take action to reduce consumer card data breaches.
Noting how the recent Target stores card data breach 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 personal data, causing 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.
There are 46 states with disparate laws enacted to reduce data breaches, she noted. Nevada, Washington, and Minnesota are among the states that have stricter laws than California.
Co-chaired by Assemblyman 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.
‘Bank on California’
At another notable session on Feb. 6, the California Assembly Banking and Finance committee convened in San Francisco for a hearing on the Bank on California program. Assembly members requested to hear in particular from members of the successful “Bank on San Francisco” program.
Lily Lo, CEO of Northeast Community FCU, was able to share her credit union’s experience as an active participant in the program in helping San Francisco residents find low-cost financial services.
“Bank on San Francisco” has become a model organization that partners those in the financial services industry with government leaders to help people without access to mainstream financial institutions get accounts at banks and credit unions.
The program focuses on the unbanked, and has grown throughout California and the United States. With committed partners—many of which are credit unions—the Bank on California program has opened 214,000 accounts for the unbanked.
Dickinson, who chairs the banking and finance committee, introduced a bill in 2013 to formally give Bank on California a home within the Department of Business Oversight.
Lo used the opportunity to discuss her credit union’s focus on unbanked and under-banked Californians. Since its inception in 1981, Northeast Community FCU has been serving members in the neighborhoods of Chinatown, Tenderloin, and SOMA in San Francisco.
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