WASHINGTON—In advance of Tuesday’s House Small Business Committee hearing on EMV, NAFCU, CUNA and four other financial trade groups have sent a joint letter to the Committee outlining the chip card landscape and emphasizing the importance of data security.
In the letter, the groups write about their appreciation for the committee’s Oct. 7 hearing on the EMV deadline and highlight some additional information to assist the committee as it prepares for next week’s hearing: “The EMV Deadline and What it Means for Small Businesses: Part II.”
The groups point out that “The transition to EMV began in 2011, and card networks, banks and credit unions, merchant bank processors, and the merchants themselves have been involved in implementing the transition since that time.”
The groups also highlight that consumers will benefit greatly from the EMV transition. “Chip cards greatly reduce the fraud risks stemming from such breaches (like at Target and Home Depot) by generating a one-time code for each transaction, eliminating the possibility that those chip cards can be counterfeited and used at another store.”
“Merchants are fully empowered to protect themselves from any increased liability as part of this transition,” the groups wrote. “Once merchants install chip card readers and turn them on, liability returns to the financial institution.”
In the letter, the groups point out the “PIN argument,” alleging it’s “a smokescreen used by retail trade groups to deflect attention from the high-profile retail data breaches at big box stores over the past few years and their underlying causes.”
Instead of fighting the retailers, the groups urged turning attention to meaningful data security legislation, like H.R. 2205, the “Data Security Act of 2015,” introduced by Reps. Randy Neugebauer (R-TX) and John Carney (D-DE).
“Finally, an attempt is being made to interject one of the most controversial parts of the Dodd-Frank Act – the price controls of the Durbin Amendment - into the chip card discussion,” the groups stated. “The fact is that banks and credit unions annually spend billions on innovation in payment security in order to stay ahead of the thieves.”
In closing, the groups said, “Ultimately, the only way to protect our data is to stay ahead of the ever-changing criminal element through joint efforts.”
In addition to NAFCU and CUNA, the letter was signed by the American Bankers Association, Consumer Bankers Association, Financial Services Roundtable, and the Independent Community Bankers of America.