WASHINGTON — The Independent Community Bankers of America (ICBA) reports the nation’s community banks have already reissued more than four million credit and debit cards at a total reissuance cost of more than $40 million following recent data breaches at major retailers (numbers are based on a sampling of community banks).
Due to their quick action in reissuing affected cards, ICBA says community banks’ initial fraud costs were relatively low, with less than 1 percent of community bank customers reporting fraud on their accounts following the breaches at Target and Neiman Marcus.
“Community banks absorb the costs of data breaches upfront because their primary concern is to protect their customers,” Bill Loving, ICBA chairman and president and CEO of Pendleton Community Bank, Franklin, W.Va., said. “However, in the long-term the lion’s share of costs associated with data breaches should ultimately be borne by the party that experiences the breach. This is critical to aligning incentives to maximize data security by all parties that store consumer data — making the payments system stronger over time, which is a win for everyone, especially consumers.”