In a letter to congressional leaders, NAFCU President/CEO Dan Berger criticized the Food Marketing Institute's recent request for card issuers to delay the October 2015 deadline for the Europay, MasterCard and Visa EMV liability shift.
Berger argued that retailers should be subject to the same data security standards financial institutions are required to follow by law.
“FMI's delay tactic is remarkable given the extraordinary number of merchant and retailer breaches that have occurred in recent months coupled with the intense interest in preventing breaches from lawmakers and the regulatory agencies,” Berger wrote in the letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Harry Reid (D-Nev.).
A letter with similar language was also sent to House Speaker John Boehner (R-Ohio) and Minority Leader Nancy Pelosi (D-Calif.) on Thursday.
According to the FMI's letter, dated March 23, some FMI members have the EMV equipment installed in their stores while many others are waiting to receive the new EMV-capable payments terminals.
FMI claimed that there is a 16-week delay for delivery.
“Compounding the delay in terminal delivery with the installation process and the certification requirements, some grocers already know the October deadline will be unattainable,” the letter said.
Berger labeled the request an attempt to detract from substantive issues, including strict data protection, in favor of a smoke-and-mirrors campaign on chip and PIN.
“Despite the continued 'chip and PIN' rhetoric from groups like the National Retail Federation and Retail Industry Leaders Association, their large retailer members are contacting the payment networks and demanding an implementation delay. Congress should not be fooled by these groups' unscrupulous tactics and falsehoods,” he wrote.
The payment networks are set to shift the responsibility for any fraud resulting from a payment transaction to the party using the least-secure technology. Berger said credit unions have worked tirelessly to do their part in providing a safe and secure payments system.
“As credit unions and their 100 million members continue to suffer as a direct result of recent merchant and retailer data breaches, FMI is more concerned about the cost of complying with the EMV standards and how quickly they can process transactions than it is about consumers and doing everything they can to protect their customers from future breaches,” he said.
Berger cited a February 2015 survey of NAFCU members, which found the estimated costs related to merchant data breaches in 2014 averaged $226,000 per institution and respondents only expect to recoup less than 0.5% of their losses.
“While NAFCU has long believed that the conversation about EMV is important and that merchants and retailers should do their part in this regard, Congress must act to ensure technology standards are accompanied by strong data safekeeping standards for merchants and retailers akin to what credit unions comply with under the Gramm-Leach-Bliley Act,” Berger wrote.
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