The Clearing House (TCH) white paper, entitled Ensuring Consistent Consumer Protection for Data Security: Major Banks vs. Alternative Payment Providers, addresses the regulatory gaps relating to the data security practices of the Alternative Payment Provider (APP) industry. Banks are subject to extensive regulatory, supervisory, and enforcement scrutiny by their regulators with respect to privacy and data security, APPs, by contrast, are providing their products and services by continuing to rely on the backbone of existing bank payment systems while capitalizing on innovations in communications platforms, thus generally managing to avoid the reach of the traditional financial regulators. Additionally, APPs only face punishment for lax data security practices if they suffer an actual cybersecurity breach that is discovered by the government, because unlike banks, APPs are not subject to regular examinations and enforcement actions by regulators. The paper contains detailed recommendations to close the regulatory, enforcement and examination gaps that exist today, including using available examination authority and enforcing existing requirements as well as enacting legislation establishing additional data security requirements for APPs.
You Might Also Be Interested In...
AML, Bank Secrecy Act and Sanctions BPI Submits Comment Letter to FinCEN Regarding AML Program Effectiveness
Bank Governance BPI Offers Recommendations to NY Financial Services Regulator on a Re-Proposed Regulation on Disclosure of Confidential Supervisory Information
Cybersecurity BPI Files Comment Letter with U.K. Banking Authorities in Response to Operational Resilience Proposals
Bank Governance Cybersecurity: Emerging Challenges and Solutions for the Boards of Financial Services Companies
More Posts by This Author
FinTech & Innovation FinTech and Big Tech Companies Want the Benefits of Banking Without the Responsibilities. Regulatory Loopholes Could Let Them Succeed.
Bank Activities and Structure BPI Asks OCC to Furnish Data Used to Support Rushed Fair Access Proposal in FOIA Request
COVID-19 Relief BPI and Joint Coalition Urge House and Senate Leadership to Address PPP Forgiveness Process
Bank Capital and Stress Testing The Farmer and the Seed Corn: Why Lowering the CCyB and Imposing Dividend Restrictions Are Opposites