Now that the Target data breach suit has class-action status, many in the credit union industry are eagerly looking forward to the proceedings and the new regulations they could advance.
Clark Yelverton, president/CEO of CSE Federal Credit Union, was especially pleased with the Sept. 15 decision by a Minnesota District Court judge. His credit union is one of five financial institutions — and the only credit union — that asked for an injunction in April after Target offered $19 million to settle breach claims with MasterCard issuers.
"As one of the many credit unions that suffered substantial losses as a result of Target's failure to adequately protect its sensitive payment data, we were frustrated, particularly as the data breach took place during the busiest shopping season of the year," Yelverton said after the decision. "We were forced to spend thousands of dollars to reissue hundreds of cards and to reimburse members for fraudulent transactions. Additionally, we had to address member confusion and complaints, and change or cancel accounts. Even though financial institutions are held to extremely high standards of securing member information, we were ultimately the ones that had to incur the costs of one of the largest data breaches in U.S. history."
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Credit unions incurred at least $30 million in card reissuance costs related to the Target breach, according to CUNA President/CEO Jim Nussle.
The Wisconsin Credit Union League said after the decision that Wisconsin credit unions incurred more than $600,000 in costs related to the Target breach.
In an email to credit union leaders after the decision, Michigan Credit Union League & Affiliates CEO David Adams also expressed support for the ruling and laid out the road ahead.
"When Congress returns in January, MCUL will aggressively communicate this position to the Michigan congressional delegation. MCUL will also support congressional action that would hold all retailers financially liable for such future data breaches," the league said.
Indeed, aside from proceeding with the suit, the next task appears to be lobbying for legislation aimed at regulating retailers.
Clark Yelverton said he probably isn't taking his eye off the lawsuit ball anytime soon, however. If the case goes to trial, he'll likely have a big court date around this time next year.
"What will make this all worthwhile will be knowing that we finally sent a message that card issuers should not have to bear the burden of paying the substantial costs for these breaches, and that it is time for Congress to establish rules and measures to hold retailers accountable," he said.
Read more about the credit union industry's next moves in the class action Target lawsuit in the Oct. 7, 2015 print issue of CU Times.
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