Congress ponders the options for addressing data theft, as the card-processing company bemoans a loss of contracts following a substantial data breach.
Despite a steady stream of reported data thefts this yearmost recently by CardSystems Solutions Inc.members of Congress are unable to agree on how to combat the growing threat to consumer privacy.
The roster of divergent potential solutions grew again Thursday.
"We need to do everything possible to ensure that our personal information remains privileged and protected when we make any financial transaction," said Rep. Sue Kelley, R-N.Y., chairwoman of the financial services committees Subcommittee on Oversight and Investigation, which held a hearing Thursday to examine the CardSystems incident.
But some members remain reluctant to impose any new regulations at all, contending that the marketplace will compel security improvements.
"Government intervention may hurt," said Rep. Patrick McHenry, R-N.C. "If the marketplace is going to deal with this, lets monitor it, lets watch it."
The marketplace responded swiftly last week to the CardSystems disclosure; both American Express and Visa Inc. canceled their contracts with the Atlanta-based credit card processing company.
As of Thursday, MasterCard International Inc., which had about 68,000 accounts compromised in the breach, has given CardSystems until Aug. 31 to comply with its data security requirements, according to Joshua Peirez, senior vice president and associate general counsel at MasterCard.
John Perry, CardSystems president and CEO, told members of Congress that his company faces "imminent extinction" if the credit card companies do not reconsider their decisions to cancel the contracts.
"CardSystems is being driven out of business," Perry said at a hearing before the House Committee on Financial Services, adding that hundreds of merchants will be left in the lurch if the company closes.
Read the full story on CIOInsight.com: CardSystems to Congress: We Face Imminent Extinction