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Data Breach Impact

April 7, 2014

Dear Friend,

In December, Target customers fell victim to a widespread data breach that compromised the personal and financial information of up to 110 million individuals in the United States. It’s also estimated that 500,000 Texans had their debit/credit card information compromised as part of that breach. 

This type of sophisticated attack has far reaching consequences for everyone affected. The customers are put in serious jeopardy of having their lives impacted by fraudulent charges and are forced to go through the process of working with their bank to handle any compromised credit/debit cards and receive replacement cards. 

Yet, what has mostly gone unnoticed is the immense burden to banks and financial institutions that have to cover the costs of notifying customers and replace the compromised cards. When a data breach does occur, like the incident with Target, the banks rather than the retailer serve as the first line of defense to protect their customers from any fraudulent activity. 

However, this comes with an extraordinary cost for the financial institutions, especially smaller community banks. For example, community banks have reissued more than four million credit and debit cards to consumers at a total reissuance cost of more than $40 million. The community banks have to absorb this cost upfront in order to immediately protect the financial security of their customers. In turn, this makes managing a retailer’s data breach financially unsustainable for community banks over the long-term. 

That is why it’s vital for all parties involved, including Congress, to review what can be done to strengthen the protection of personal information and prevent these massive data breaches from occurring. And, it’s equally important to ensure that those impacted, both customers and banking institutions, are not put in dire financial straits either because of such breaches.  


Kay Granger
Member of Congress