WASHINGTON Jan 22 Community banks from across
the United States and some of the country's biggest retailers
are at each other's throats over whose job it is to protect
consumers from the kind of cyber attacks suffered last month by
Target and Neiman Marcus.
The National Retail Federation delivered a shot on Tuesday,
saying in a letter to U.S. lawmakers that its bank "partners"
had failed to adopt new technology and instead continued to
issue "fraud-prone" magnetic stripe credit and debit cards.
On Wednesday, the Independent Community Bankers of America
representing about 7,000 banks in small towns, big cities and
suburbs, fired back, saying the NRF should focus on its response
to theft of data "rather than hurling false allegations blaming
the banking industry."
ICBA members hold $1.2 trillion in assets, $1 trillion in
deposits, and $750 billion in loans to consumers, small
businesses and the agricultural community. The NRF represents a
range of merchants in more than 45 countries.
"Retailers and their processors - not banks - are
responsible for the systems in their stores that process payment
cards," ICBA President and Chief Executive Officer Camden Fine
said in a statement.
The exchange ratcheted up an already heated dispute over who
should shoulder responsibility for cyber attacks.
Target Corp, the No. 3 U.S. retailer, disclosed in
December that it was victim to one of the biggest credit card
breaches on record. Target said it ran for 19 days during the
lucrative holiday shopping season, with data compromised in the
records of about 70 million customers.
Privately-owned luxury retail chain Neiman Marcus has said
it too was victim of a cyber attack and sources have told
Reuters other retail chains have been hacked
U.S. banks and retailers face an October 2015 deadline
imposed by payment networks Visa Inc and MasterCard
to switch to new cards that use computer chips to store
information rather than magnetic strips.
Each group wants the other side to pay for the upgrades.
Industry experts and some executives, however, hoped the
data breaches would spook the firms enough that they would speed
up efforts to implement the new technology.
"This might be a chance for retailers and banks to for once
work together as opposed to sue each other like we've been doing
the last decade," JPMorgan Chase chief executive Jamie
Dimon said last week when he was asked about the issue during an
earnings conference call.
National Retail Federation President Matthew Shay, in the
letter to lawmakers, took a swipe at banks for "putting
sensitive financial information at risk" for years with the more
traditional cards "while simultaneously touting the security
benefits of next generation 'PIN and Chip' card technology for
customers in Europe and dozens of other markets."
The bank group said on Wednesday that the technology would
not have prevented last month's breaches. ICBA has argued in
previous letters to lawmakers that the party that suffers the
breach bears responsibility.