October 17, 2014
Remarks by the President on Protecting American Consumers
Consumer Financial Protection Bureau
12:00 P.M. EDT
THE PRESIDENT: Hello, everybody! (Applause.) Hello. Good job, everybody. Everybody, please have a seat. Well, it is good to be back at CFPB.
AUDIENCE MEMBER: Woo!
THE PRESIDENT: Yes, this is an enthusiastic and rowdy crowd, this group. (Laughter.) That’s what happens when you do good things — you feel good. And this group is doing great work.
I want to thank your director, Rich Cordray, for hosting me here today, and I want to thank all of you for doing a great job in looking out for the financial security of all Americans.
Now, obviously, right now the news is dominated by Ebola, and we’ve got an all-hands-on-deck approach across government to make sure that we are keeping the American people safe. But even as we meet that particular challenge, it’s also important that we don’t lose sight of the other challenges that we face as a nation, especially the challenge of making sure that our economy works for every single American. And that includes the challenge that brings me here today: protecting Americans from financial fraud and identity theft.
As President, I believe that America is stronger when our middle class can count on things like affordable health insurance, and Medicare and Social Security, where there are rules to protect our kids from dirty air or dirty water; rules to protect consumers from being taken advantage of. And I know you agree, those of you at CFPB, because that’s your mission.
And that’s why part of the financial reform that we passed in the wake of the worse financial crisis since the Great Depression was the creation of this agency, to make sure that we are looking at every aspect of the financial system and ensuring that the American people have the basic protections that they should be able to count on. You have one mission: You’re a watchdog for consumers to make sure that the American people have somebody who’s got their backs.
October 17, 2014
FACT SHEET: Safeguarding Consumers’ Financial Security
Today, the President is signing a new Executive Order directing the government to lead by example in securing transactions and sensitive data. The new BuySecure Initiative will provide consumers with more tools to secure their financial future by assisting victims of identity theft, improving the Government’s payment security as a customer and a provider, and accelerating the transition to stronger security technologies and the development of next-generation payment security tools.
During remarks at the Consumer Financial Protection Bureau (CFPB), the President will highlight steps by his Administration and the private sector to improve security. With over 100 million Americans falling victim to data breaches over the last year, and millions suffering from credit card fraud and identity crimes, there is a need to act — and to move our economy toward stronger, more secure technologies that better secure transactions and safeguard sensitive data.
While there is no silver bullet to guarantee data security, the President is signing an Executive Order to implement enhanced security measures, including securing credit, debit, and other payment cards with microchips in lieu of basic magnetic strips, and PINs, such as those standard on consumer ATM cards. He is calling on all stakeholders to join the Administration and a number of major corporations in driving the economy toward more secure standards to safeguard consumer finances and reduce their chances of becoming victims of identity theft — America’s fastest-growing crime.
Finally today, the President will announce the White House Summit on Cybersecurity and Consumer Protection later this year to promote partnership and innovation. The Summit will bring together major stakeholders on consumer financial protection issues to discuss how all members of our financial system can work together to further protect American consumers and their financial data, now and in the future.
The President will also renew his call to Congress to enact overdue cybersecurity legislation that will help protect Americans — particularly by clarifying companies’ obligations when sensitive data is breached.
Leading by Example: Securing Payments Across the Economy
Federal Efforts to Transition to More Secure Payment Systems: Today, the Federal Government is making an enterprise-wide transition to more secure credit, debit, and other payment cards, as well as the retail payment terminals at government locations like the passport office, VA canteens, and national parks. These new systems will, at a minimum, meet the global security standard of more secure microchips to store card numbers instead of unencrypted magnetic strips, and secure PIN functionality, like the kind featured on most ATM cards. The goal is not just to ensure the security of doing retail business with the government, but also, through this increased demand, to help drive the market towards swifter adoption of stronger security standards. Institutions like the United States Postal Service have already made this transition across tens of thousands of retail facilities across the country.
* Making Chip and PIN Cards the Standard for the Federal Government: These “chip and PIN” cards, which have cut down on payment fraud considerably in other countries, will become the standard for Federal Government programs like SmartPay® and Direct Express®. We are working with these programs to ensure that we begin a replacement program on January 1, 2015, and will, within the calendar year, issue over one million new, more secure government payment cards.
* Updating to Chip and PIN Card Terminals in Federal Agencies Processing Consumer Sales: Every Federal agency processing consumer sales will actively replace any prior-generation card retail payment card terminals to those with new chip and PIN security features under a plan issued by Department of the Treasury, which establishes requirements that federal agencies must follow when receiving credit and debit card payments when using Treasury’s collection system.
Traveling Abroad? Consider a Chip-and-PIN Credit Card
Foreign countries have different cultures, different customs, different languages – and, to top it all off, some countries have different styles of credit cards.
Rather than using the familiar cards, which feature a magnetic strip at the top of the card, several countries have transitioned to “chip-and-PIN” credit cards, better for consumer safety. While some foreign vendors will continue to accept your traditional magnetic strip cards, some may not.
So, what’s the difference?
Chip-and-PIN cards are embedded with a computer chip that contains the information that would normally be contained in the strip along the top of the card. In addition to this chip system, users are required to enter in a PIN code, much like as would be required for a debit card.
The cards offer greater consumer protection, as it is harder to clone the payment information when a chip is being used, thus reducing identity theft. In France, chip-and-PIN cards have been responsible for a 50 percent reduction in payment fraud, according to the Federal Trade Commission.
The cards are increasingly being made available for U.S. residents, and before traveling, officials suggest you check with your credit card company to see whether chip-and-PIN cards are available. If not, they suggest that you carry a little extra cash, in case foreign vendors refuse to accept your current credit card.