Transcripts For CSPAN2 Key Capitol Hill Hearings 20240622

A what happens then . Who is listening to them . I have an acronym for a name. The island nations, there are quite a few of them. Lobby every year and have gotten upset of people to listen to them at the United Nations anymore. Theyre going to pose not only basic justice problems but also a huge immigration problem. Whos going to take them . Where are they going to go . Do we care . Should we . That too many politicians i dont think theyre going to raise this issue. Its not local. Its not really national and its not something people really want to hear, but among those were out there that this man is by going to raise while he is here. Thats a long laundry list but they are correct. In covering his visit, theres so much to do for reporters and publications. This pope seems becoming the entire waterfront of issues, dovetails of whats going on capitol hill and whats going on on the president ial campaign trail. Like all good politicians, popes are polled, and this pope comes to the United States are welcome to the United States at a time when his poll numbers have actually dropped. Gallup had him dropping in a survey last month from 76 to about 59 , which was where he was the time he was elected pope. Still popular but just taking a little bit of a hit. Ironically that it, most of it comes from conservatives. He dropped from 72 i believe to 45 . One could argue that this decline is probably based on his encyclical and the bit about his message about poverty. So it will be interesting to see how his message place out of my president ial candidates and how plays out among some members of congress. There were some members of congress who were not pleased about the popes role as a facilitator in the discussions with cuba. A good number of our members of our florida delegation members including senator and president ial candidate marco rubio were not thrilled about the popes role in fact, and made that known. That said, he will be warmly greeted by these members of congress. They are looking forward to having it up on capitol hill. As i mentioned earlier, there will be fights to see who sits closest to the al to shake the popepopes hand when it comes dn the aisle. At this intersection of his message and whats going on in washington on the president ial campaign trail cant be underestimated speed is live now to capitol hill for discussion about the security of credit cards. Id like to welcome you to our program and thank you for being here to take part in this discussion today regarding an important consumer issue. Protect my data is a Consumer Education campaign on credit card security. We are joined today by our distinguished white house guest speaker, followed by a panel of leading industry and consumer issue experts to discuss this issue. After a brief opening remarks and our discussion will open this up to answer any questions you all may have. We are here today to explore the steps retailers and Financial Institutions are taking to secure credit and debit Card Transactions. The differences between chip and p. I. N. Technologies compared to chip equipped cards thank you chip cards with the signature requirements and to provide a brief overview of what the white house is doing to protect American Consumers from credit card fraud and Identity Theft. After what seems like an unthinking occurrence of cyberattacks at Government Agencies, Financial Institutions, retailers, Health Care Companies and even in the Entertainment Industry in recent years, hundreds and the American Consumers have had their personal and Financial Data stolen and their confidence shaken. Given these recent data breaches, its no surprise that Data Security is at the forefront of many consumers minds. Congress is trying to work in a bipartisan manner on efforts to improve public and private cybersecurity measures but less attention has been paid the issue of improving Payment Security measures. And while we certainly need more robust cybersecurity measures to protect sensitive Financial Data, we also need frontline measures that will stop criminals who try to use stolen banking and credit card information. The most common credit cards like the ones you have and happily been using date back to the 1970s. They use a magnetic strip on the back of the card which houses our Financial Information along with a signature for authentication. But as we all know, thieves have all but mastered the ability to exploit the weaknesses of existing credit cards. Whats more, they can just stolen Financial Information to exploit the weaknesses of existing credit cards. Whats more, the use that Financial Data to create counterfeit cards to run of fraudulent transactions and still come consumers accounts. To help combat fraud, and many card issuers and Financial Institutions in the United States have begun deploying new microchip equipped cards, also known as emv cards that are encrypted. Some of you already have started to receive these new chip cards. However, most of these cards still rely on a signature as a secondary form of verification. Feature that unfortunately can still be easily forged. Instead, chip enabled cards could offer greater protection for consumers by coupling them with the requirement that consumers enter a personal identification number, a p. I. N. , to profit authorized the transaction instead of a signature. The p. I. N. Requirement at the distinct layer of security to each transaction that has been proven to reduce fraud. Our panel of experts here today will discuss these issues in more detail. The evidence of chip and p. I. N. Benefits and hide and seek to protect were highlighted in president obamas executive order issued last october, and its with great pleasure that i welcome our first guest speaker today, to tell us more about the administrations actions. Doctor Marisa Porges is the Senior Policy Adviser at the National Economic council and is the lead for the president s secure initiative. She has a very impressive background in International Terrorist and also served our country as a flight officer in the u. S. Navy. So please join me in welcoming our first speaker to present today, dr. Porges. [applause] thank you, debra. Thanks everyone for being here today. Im really excited to get a chance to talk to the group and join my fellow panelists for a conversation about Consumer Financial protection and looking at it through the cybersecurity live. Im particularly et cetera to see some faces ive worked with the names ive worked with in the past but also new people coming to the table for this conversation. Because as i will describe and as i think our conversation will demonstrate, this isnt about hope of government approach, not even about all of industry. Is really about the whole event the approach, including folks here who are representing their members of congress including our consumers in the conversation, and the fact to help demonstrate why this is really about including everyone in the conversation is looking back at our data reports rather than report the data breaches. If we think back to the 20072011 timeframe, we often mostly thought of the business sector as being the target. And, in fact, for the period of over 34 of the data breaches reported were targeting businesses, retail entity, the payment processors. If you look just at this year, even until the end of july weve seen the medical Health Care Industry coming under one report of data breaches. Second time in the course into the government and the military. Weve seen this year will likely surpass that last year which in of itself was to set an unfortunate standard for how many data breach instances that American Consumers were facing. So with the answer to understand that its really about everyone playing a part im going to talk about Consumer Financial protection through the lens of the white house and look at it in three main areas. First and foremost what we are doing from the perspective of the federal government to ensure the federal government is better protecting American Consumers. Second, how we are making sure the private sector is positioned for success on this front. And last but not least, to talk briefly from a Strategic Perspective how we think of Consumer Financial protection within a broader landscape of cybersecurity and how we should sort think of things and not just in the next day, the next over the next decade with questions, concerns should we consider . I wont dive right in to looking at it through the government lands, what were doing to enhance american Consumer Financial protection. Out the back to what debra mentioned moments ago, the executive order signed by president obama in october of last year which launched the by secure initiative. By secure has become a keystone in the federal effort to lead the way to protecting American Consumer transactions. And during that announcement and nurses would working to transition federal agencies to ensure that were using enhanced security Payment Technology with all our retail payments. What does this mean . It means the two lead agencies who work with card issuers to issue cards on behalf of the u. S. Government, the General Services administration, gsa, and treasury, have begun actively aggressively issuing cards that have the chip, that havent Emv Technology that are chip and p. I. N. Enable. And im excited to report that we got there respecting yesterday for the month of july and it means that gsa working with the pain in his has issued over 1 million new emv chip and p. I. N. Enabled cards, to federal government workers so they can use them when they travel, making payments. This is an effort to drive and lead the way for a work pashtun we are protecting our transaction. Treasury have started issuing 10,000 new cars at that is part of a phased approach to introduce Emv Technology recipients of federal benefits to have a direct express debit card to we are really looking at all sight of the system on the phone but also even though the past emv how were using other secure enhanced payment features. Things like online payment, paypal, card not present. So you may have seen in february treasury announced that if you pay, paying bills to permit agencies online, things like the court fees, things like payments to your sba loans coming of multiple Payment Options to include paypal and douala. Were looking at allpayer system to how we can secure our payment transaction. Of course her to think of it on the receiving end and you may have, you may have noticed their payment terminals have been upgraded to include enhanced security features, the ability to use chip in and get something we are doing across the agencies and weve seen 19 federal agencies currently upgrading their terminal. Its not just what we put out the pi. Its how were receiving the american customer consumer for any federal payment transaction. And i can talk more about this number of other things in terms of tools were giving feedback and consumer but it gives you a taste for what buy secure isnt the commission how we can better protect American Consumers and financial transactions. I will turn briefly to that we were looking to help the private sector because again its not just a whole of government approach. Its a whole of government, industry, consumer, congressman, everyone approach. This is a challenge that industry and government must tackle together. Suffice it to say our Computer Networks and systems that consumers do with every single day are mostly held by the private sector. On the other hand, government oftentimes has the latest and greatest intelligence and information to help the private sector market threats and respond most effectively and quickly. Its only by marrying those two groups up in making sure the partner and work collaboratively together that weekend ensure consumers are better protected. What does this mean . It happens on a multiple front. Again first and foremost its about positioning the private sector to lead and effectively lead on this issue. Hopefully a number of you saw or heard about hopefully attended systems in california in midfebruary the cybersecurity and Consumer Financial protection summit held in september, rather held in stanford in midfebruary and it was an exciting event, not just because of the good weather and not just because of the 24 plus senior leaders, ceos and other executives from the Tech Industry from consumer advocacy groups, retail, health care, others. But it was about what happened that day and, of course, commitment that those Companies Made coming out of the summit. That day we had over two Dozen Companies make a major commitment to improve their cybersecurity efforts, to be more to give consumers a tool that they could use to protect their identity, he managed to risks better, and it is more enhanced security payment features. So did and what does this look like . This looks like announcement by qvc, walgreens, u. S. Bank, pacific gas and electric, and others to start using cybersecurity, to better protect information that failed on behalf of the American Consumer. It looks like visa announcing a more aggressive timeline for tokenization, mastercard announcing millions to introduce new safety procedures and features. American express introducing enhanced Security Technology in the form of mobile factor authentication. And entities like nation star who are now offering free Credit Scores on a regular basis to the consumer. Again, tools we can all be using the mark of Identity Theft and Quick Response in the incidence of a malicious attack or incident. But what else are we doing . The other menacing thing that came out of the summit is how we are collaborating more ever since. One thing that came out of the dialogue was that oftentimes individuals are actor inspect sector specific engagement is most effective. That looks like efforts like specific agencies addressing the sectors they work with to simulate cyber incidents, talk to the responses and identified key challenge is moving forward so they can better were effectively respond in the future. Specific of one good example for the group is a treasury. Treasury has run multiple tabletop exercises public and private exercises that they can simulate what happens a malicious attack, a cyber incident and determine how best to respond so that we in government can help the private sector most quickly and effectively protect the American Consumer. And again a key part of that as always is information sharing. Now, a as a third lane to stupid to consider consider how this all fits into broader cybersecurity efforts, cybersecurity, Consumer Financial protection board often two sides of the same coin. Weve seen the cybersecurity thread continued to evolve over the past few years. And like was our response continue to evolve. So, too, are Consumer Financial protection responses must continue and what does this look like . This looks like conversations about legislation, conversations about including stakeholders in the conversation, conversations about how consumers and the American Public to consider their identity moving forward in the next decade and what Identity Management looks like. To dive into a few of those a little more, on the legislation front. I would be remiss not to mention it, specifically since 2014 was such a really good year for us when you look at Congress Passing cybersecurity rated legislation, specific legislation that addresses, that improves have a federal government protects its own networks and positions the federal government to engage in cyprus could emissions moving forward. But we are all well aware that there is still new legislation proposed after which will address specific Consumer Protection issues. And im referencing legislation proposed by the white house earlier this year that addresses a few key issues including information sharing and data breach notification. And provides additional safeguards to ensure the American Public has its privacy and Civil Liberties protected. And provides for increased information sharing, government entities, between government and private sector. So we are really hoping that the momentum we had in 2014 will Carry Forward through the fall of 2015 and we can have progress on this front. Because it will set a for increased success moving forward. Last but certainly not least was talk about other stakeholders, i probably will say last twice but i do more and think about. One, we talked about the federal government but is also state and local entities. We were really excited at the National Economic council to participate in a with governor mccallum at an event with the state of virginia announced to be the first state to mandate the state agencies would begin accepting chip and p. I. N. During the retail transactions. Like the buy secure initiative is to actually aggressively issuing emv enabled cards moving for. Again thinking about them all others of our system at a retail transactions at all those layers can be more secure moving forward. We just put out late last week actually a best practices ibook of sorts that the gsa put together to guide state and local entities for how they can more aggressively actively do what other states are doing an issue be in the enabled chip and p. I. N. Protected cards. I encourage all to go online and go to gsas website and see if they suggest other entities followed suit and also address the retail transactions more secure. So to close, and i said i would address one or state, and to do it in my closing comment and i will close by saying, i think we are at a strategic point. I think we are positioned for success moving forward with all the people we have in the room, with a people on the panel, with a good efforts on the private sector and by various Government Agencies and other entities on this asia over the past year. But theres a lot of work that needs to be done. Nothing i mentioned is a Silver Bullet but they are all pieces of the puzzle we need moving forward. The last piece of course is the American Consumer. I would just encourage in our dialogue moving for to consider how we include the consumer in the conversation. Matches but how they should start using a chip on the card but really what identity Threat Management looks like moving forward. Y. Multifactor authentication is key, and what the future of Identity Protection looks like for us all. So i look forward to questions and look forward to talking with the panel on this. Thank you, debra. [applause] thank you so much. Those remarks were right on target, fabulous, and its so exciting to hear about everything the administration has been doing to move us forward for consumers for credit card security. This is great. We have an outstanding panel before you here today, and im really excited about introducing them all to you right now. Im going to introduce them all, and they are not necessary going to speak in the order that you see light up so ill ask them each a tedious sort of nod or raised her hand as i introduce them. And then we will get started. First up will be liz garner who is Vice President of merchant advisory group. And then well hear from bill boger who is senior Vice President and chief legislative counsel for the american bankers association. And then well hear from our wonderful consumer issue team of John Breyault who is with the National Consumers league. He is Vice President of public policy, telecommunications and fraud. And Steve Pociask who is president of the American Consumer institute. And ive had the pleasure of working for many years with both john and steve on the whole post of consumer issues, so its wonderful to have both of them here today to join me. So first off id like to call on liz to talk to us and explained what retailers are doing to better protect consumers. Thanks to prepare and thanks for having us here today. A lot of them their faces in the crowd. Lets start over like to engage the audience. How many people know how many visa credit cards have been compromised in the past two years . No, you people know how many faster cards have been compromised in the past two years . How many people can in a big retailer or big bank whos been compromised in the past two years . I think that says it of the thats why on the panel its our members and our brand who are at stake when it comes to payment card security and its a relationship with a customer. So protecting Customer Data and payment in particular are paramount to the Merchant Community and its something all of our folks take very strictly. Series leader at my organization our direct members of the finance and treasury professionals but im not even talking about the Technology People within the company. And i can take the payment card security is an important issue for our folks. Thats how important is because of the brand damage and the Customer Service issues that a retail merchant or another business like a bank or someone else faces, its in the wake of the data breach. Heres a couple of things were doing, some of the technologies that are at market that we are very focused on. We will talk a lot about emv today but ill get to that last. Two of the other important ones are tokenization and encryption. So from a very basic point what tokenization does is it replaces it with a different value. Takes the data out of scope if installed and makes it virtually unusable to manage access data encryption is going to protect data and transmit a transaction is a complicated flow between multiple different partners. When i go swipe one of my cards at my Neighborhood Grocery store, that goes out for authorization from the merchant acquiring. Agosta the payment card brand and it goes to the issuing bank and then it goes back all the way to the merchant pointofsale. Thats a given talk to some of the new transactions that are out there im transacting with this method ive got mobile carriers. Ive got potential to apple on my phone o or android if a monir to vote or samsung or someone else who will touch the data and protect at all the way through the transaction is critical. Thats something i merchant are very focused on, deploying tokenization and Encryption Solutions together. When i say tokenization i should clarify. Im not talking about and off the shelf payment card version of tokenization to talk about actually our own Tokenization Technology but several of my members have been utilizing for years that a more unpleasant, all the products we have not just credit and debit cards. It goes beyond that to our retail gift card. Its much more expensive. Same thing with some of the solution whereby for more merchant acquires. Solution to the Security Technologies we are focused on applying for the next couple of years. Emv is the one at who is focused on because weve got this october 1 liability should they. What is emv . Its Smartcard Technology that essentially as a computer chip on a card that helps prevent against counterfeit fraud on this card, meaning it makes more difficult for me as a fee to retrieve his first of the old cards we have families to utilize today. The important thing here is that this prevents card not present, or card present, card counterfeit fraud. Thats what i get at with the point of emv an attorney. With the last country and industrial is world to go the. Weve got this date october 1st, 2015 is a simple thought, a lot of nuances of what happens and who bears liability once this shift doesnt affect the distance but it the parties was done the least to enable emv would be the most responsible for fraud and a card present an arbiter i think we look at some of the global deployment numbers its interesting. Worldwide emv card issuance, the adoption it on issue aside is up 4050 were on the merchant side merchant terminal is asian, so ive set up and means to accept the the come close to 80, 90 . We are likely to the same trends we have merchants installing the capacity to accept these cards that they think is going to reduce their front profile and the risk to their brand. I think a Pew Research Poll came out this week to sit on one in 10 cards right to have a chip on it that isnt an American Consumers wallet. Werwe are pretty close to octo1 i think people are asking what does this mean for businesses . What does this mean for consumers when we have this october 1 big . I think it means a few things. I think some businesses up and be ready to accept emv, and for those of this type of card in their wallet, they will be able to use it. There are some other businesses who may not. I want to go into a few reasons why. Its not for lack of trying, i i talk with one of my large members yesterday who is an equipment provider hasnt certified that they can accept these cards yet. He cant roll out in the acceptance and is stored until the equipment provider certifies his part and field test it. One reason youre lagging behind this this is a global specification. Like i said before, europay, mastercard and visa and there are a few other global card brands who covered specifications about card acceptance. One of the things we saw was a technology delay whereby in the u. S. We have domestic debit Card Networks so the previous the other side of atm machine, those groups who would not have access to transactions on these cards, if we didnt deploy a solution that was very specific to the product. And so that i think we have to take a look at what is the return on investment for deploying emv. Like i said before there is a huge benefit to merchants if they better protect their brand from Data Security. Were thrilled that the white houses initiative to move towards chip and pin cards. A million cards marisa said, that is fantastic to already be there. That is really ahead of game to get card out in the market. Post office and others dealt with to get their terminals ready as well. Zoo i think it is great that the governments making such great headway there. I can tell you i have a friend who works at the state department who has chip and pin credit cards so excited to get it in the mail, travels to Eastern Europe all the time. Has trouble using government cards for the past years and now she has one that works and is secure. One. Challenges with emv in the u. S. Were not adopting fully the chip and punish tiff the government supported, and not fully operable with what is best practice out there internationally. There is a few reasons were not going to pin. One my view, network driven initiative from the state. We have road maps from major card brands and there is very more concentrated networks, market share in the signature environment versus pin. It is market share issue there. On issuer side, as a business im very sensitive to the argument that putting a password on one of these cards, putting a pin on this, might make it a little bit more, might include a little bit more friction as i pull the card out as a consumer. As a business i am going to be very worried that would make me put this card at bottom of the wallet and take out one of my other credit cards. On the flip side i question how big is that risk . A very important point here, that is business driven decision, that is not a security driven decision. Security experts will tell you two factor authentication is really way to go to increase security for cardholders, for consumers and thin i also question somebody who had my swimmed out front of the card, not ever passwordprotected i will never password protect it again. Apple sets my phone up that i have to enter a password to access this by not, on issuing side putting pins or passwords on these products were doing a disservice to the American Consumer. I mentioned before, the last industrialized country to really move towards chip and pin, to emv cards. I think one of the benefits of that, we have more Technology Capabilities here in the u. S. That even than others had who rolled this out sooner. One of which is the ability to sent pins online. That is great feature commercially available several of my members deployed. If there are pins on these cards that will help reduce internet ecommerce fraud. That is a huge concern for us right now. Ecommerce, internet transactions are some of the Fastest Growing transactions in the United States. And they are transactions typically do have a lot of fraud and on the merchant side were bearing somewhere between 70 and 100 of all that fraud. For us protecting those internet ecommerce transactions, even these mobile transactions is paramount. So we would like to see pins on these to take it even further. Last thing i will say about pins you have a chart on your seats there from the data pulse issuer study that came out last week. Look at the fraud loss line. That alone shows you why we prefer pin in the Merchant Community. It is not about cost. It is about security. Security of consumers. It is seven to eight times more secure if you have a pinprotected transaction. Those numbers on the line speak volumes. If anybody says it is merchant who want to pay less interchange, look at regulated issuers. The interchange line at very top, a penny higher on pin. I would push back significantly that there is any other rationale behind merchants wanting pins other than it is a more secure type of transaction. To conclude i think, you know, we need to be pin protecting, password protecting products so that we have two layers of authentication. So that we can better protect businesses and consumers from fraud losses in the United States. I will point to one International Example that is more recent. Australia launched a pinwise campaign run by all the major global card brands, to essentially move to pins on credit cards which is what we should be doing here. They did it in very thoughtful way. They did it based off the risk on the transaction too. So there is a very big difference between my stopping at mcdonalds or wendys at noon on friday than it is at midnight on a friday. If im buying 50 worth of food, i might not need to ask for a pin on that or 35, whatever the threshold will be for that noon transaction but the midnight or 1 00 a. M. I may want to ask for that card holder authentication to be certain that the person is who they say they are. If there is not a pin on that product i cant do that. Ultimately that leads to more fraud in the system. That is bad for consumers and for business. So from our point of view we really need to take emv, which is the next Big Technology coming to the u. S. And one step further and pin protect it. Thank you, liz. Thank you so much. Well move to bill boger, who will talk about the Financial Services industry from the american bankers association. Talk about your perspective. How youre protecting consumers. Thank you, bill. Are you on there . Thank you for inviting me, debbie. This is impressive turnout. I dont know if this is august recess or congratulations being in the audience. Thanks for being there. I have to tell you your opening remarks were terrific. Marisa, yours were magnificent. You all set the stage for this talk and i have to it will you, informationsharing is a huge thing for us. We appreciate all the work that the white house has done on it. The house passed informationsharing bills you guys have been heavily involved in. Were trying to get it through the senate and you guys have been very constructive and we do believe informationsharing is another side of the coin were talking about here but perhaps the most important part is sharing threat information. Liz, all your comments laying out the background for emv, your arguments were terrific. I have to tell you, talking about the analogy to latenight transaction, if any transaction after 10 00 involves me it is inherently a suspicious transaction because im in bed by 10 00. So i would really appreciate getting a call from my Credit Card Company to tell me about that. In fact, i had a recent experience where didnt involve a pin card at all. Just involved a regular card of a major brand thats headquartered in virginia if youre listening. I had a nice little lunch. Took my son out who is intern at the american bankers association. Had just a quiet lunch at a local restaurant. Not a very big ticket item. And, in excess of just, enjoyment of having a conversation with my son, if you know teenagers doesnt happen very often, just having a talk with him i left an excessive tip which was over 20 . Well the next thing that happened was, my institution sent me an email asking me whether in fact that was me doing the transaction, looking at the fact it was in excess of 20 . So, i guess my point overall, i could go into my prepared remarks and we can have at it, i think that talk about pin is part of a multifactor protective, you know environment that we all share that we want to protect consumers but it is not beallendall. There is other Technology Using in our phones, biometrics that authenticate a transaction in place and evolving are quite frankly better than static technology such as pins. When you get a call from your institution, almost immediately, after a transaction takes place, asking if it is a fraudulent transaction or not, that is pretty darn good work. We want to encourage that. We dont want to sit back and just say okay, if we put in place a fourdigit number that will solve all the problems. We know it doesnt. We know it doesnt deal with online transactions. We all have to Work Together to try to solve these problems. We want to work with the administration. We want to work with you guys. We want to work with consumers. We want to make emv a success. We want to continue to evolve our technology to deal with evolving threats but yall have to realize that our market, our credit market is one of the most complicated and extensive markets in the world. A couple of factoids. 1. 1 billion credit and debit cards are in circulation right now, 1. 1 billion. The government you noted made Good Progress with chip and pins. That is a million cards versus 1. 1 billion cards. The government is a huge operation but it is not like the private sector. The value of card purchases was nearly 5. 4 trillion in 2014. The number of Card Transactions was over 100 billion in 2014. Folks, this is a big aircraft carrier. It takes time to get this stuff put in place. They start with the emv transition, probably three years ago. As liz mentioned, there is an Inflection Point were dealing with which is the shift in liability. Ive heard various reports about the how many chips have been put in place by the merchants. I will tell you from our perspective, from the banks, by the end of this year, there will be 600 million, maybe even more of these cards that have been issued. I think if were looking as long as we work with partners in the Merchant Community and folks in the sector we may be able to cover most of the cards out there by end of 2017. It will take a lot of work, a lot of cooperation. I feel if we continue to have these kind of conversations we can work towards that goal. So, i dont think i really need to go into a lot of details of the migration. I will tell you there has been a lot of work behind the scenes. A lot of Cooperation Among networks trying to put in place a uniform date for when this shift in liability occurs but it is not a deadline. Its a position point where that shift occurs. Doesnt mean everybody has to go out to put it in. Doesnt mean every bank has got to issue that kind of a card, but does encourage them and incent them to do it. That is the key here. We want to incent people to do the right thing. We want to incent people to protect data. We want to Work Together. We dont want to mandate a single piece of, frankly Outdated Technology to make that occur, somehow walk away thinking the problem has been involved. It hasnt been involved. We need to Work Together, continue to Work Together to solve the problem. Thanks, debbie. Thank you very much, bill. So were going to move now from the industry perspective to the consumer perspective. And, john brio, National Consumer league, tell us some of your thoughts about the consumer advocates perspective. Sure, can everybody hear me okay . Great. So just a quick baseline for you, mcl is oldest consumer advocacy organization. Weve been around since 1899, almost as long as mag stripe has been around. The thing were seeing here as we shift away from the old mag Stripe Technology to emv, i dont think there is any question in our point of view it is more technology. Is chip and emv as secure with chip and pin . No. At least not in our view. That is because of the way you authenticate a card holder. But that said its a very significant improvement in card security versus traditional mag stripe only. Essentially chip and pin from our point of view tends to be a way to protect consumers against lost card fraud this is when you actually lose your physical card, somebody takes the card into a retailer to try to use it. In a chip and pin world that would be practically impossible although there certainly are, we just saw it this morning, brian krebs who writes extensively about fraud, talking about new skimming technology coming out of mexico that may make chip cards more vulnerable than we previously suspected. Were keeping an eye on that. That said were moving to emv. There is any question that is happening. As we just heard there are millions of these cards being provided to consumers. And so this is, something that consumers will get used to having in their wallet. That said it will not be the Silver Bullet against fraud. Weve seen in other countries such as u. K. , that when they made the shift from mag stripe to chip based cards, much of the fraud that was associated previously with card duplication or card counter fitting instead to online card fraud. That is an area consumers will have to maintain vigilance about. Unfortunately well continue to have to recommend to consumers they pay close tanks to the credit card statements, flag any any suspicious charges. So that is certainly one area that we expect to see based on international experience. You know, on the, on the legislative side im glad you raised this earlier in your remarks because, this is an area we think despite the Technology Advances that we are seeing in the industry there remains very strong need for baseline security legislation from the u. S. Congress. Ncl has support ad bill introduced by senator leahy in the senate side, i believe there is a house version will soon, if hasnt already been will be introduced for that bill. We think that is a bill not only provides baseline security protections, that would require all businesses to adhere to certain level of Data Security protection but provides a data breach notification standard raises all boats as opposed to looking to least common denominator approach that would reduce consumer protechses passed in many states that would breach consumer notifications protections. Were sporting a new bill in illinois that strengthens their existing Data Security legislation. Certainly we look to states like illinois and massachusetts as templates for good Data Security protections that could be considered as a national template. You know, one thing were also concerned about with regard to getting back to the pin issue, is this long tail of Small Businesses. So i think if you read the press you will see that many of the largest retailers are going to be implementing chipenabled terminals, if they havent already implemented, you see them getting into the checkout lines. Well see more places where they are already in, turning on that, that functionality, the chip functionality. However, as was mentioned earlier, this is going to take a while. Consumers shouldnt expect by october 1, suddenly their cards will be secure when they go to their local retailer but they should look for retailers who have chip turned on. And so that is going to take a little bit of Consumer Education, to make consumers understand why chip is a different way to pay. The advanced security benefits that it brings but theyre also going to continue to use mag stripe. For example, we have october 1 liability shift for many retailers, atm machines and fast stations, for example, they, their terminals will not be subject to liability shift until the end of 2017. That, in addition to that you will have many, many Small Businesses who simply are going to make the decision that their liability for fraud is not enough to outweigh the not insubstantial cost of acquiring a new payment terminal. So consumers will continue to see small momandpops, Smaller Stores continue to take mag stripe into the foreseeable future from our point of view. So, you know, while just in closing i think we are glad to see emv rolling out. We do think it is more secure. It is not the Silver Bullet. Were very grad to see the president s buy secure initiative. I think the federal government can lead by example in adopting more secure Payment Technology but that doesnt exclude the need for federal legislation to lift all boats. Were happy to be here, debbie. Thanks for invitings ncl to speak on this very important issue. If you dont mind this one quick plug, if youre interested in Data Security issues we Just Launched today a new publication call our data insecurity digest that will provide important analysis and links to Important Media articles about data breach and consumer Data Security issues. You can find all the information about that, how to subscribe at our website, nclnet. Org. Thanks. Thank you, john. Steve, your thoughts. Thank you, debbie, thanks for inviting me. Im president of the american consume institute. Were a 501 c Educational Research institute. Its a pleasure to be here. Weve heard quite a good baseline for the discussion and i want to emphasize a few points and add in a few new ones here so i will be pretty brief. There is a lot of statistics out there used how bad things have been last year and year before that. Some of the statistics like 1 3 of americans had their information compromised and data breaches. There was another one twine 40 and 45 of companies had data breaches in the last year. I mean, the importance of this issue cant be, you know, overlooked. I mean were talking about the need for better security along all steps of this, for better protection against data breaches. Reducing fraud. And here with the signature still in play, were talking about reducing forgery, if we can move towards a pin system. I think it is so important that we think about Building Confidence between consumers and merchants and the Credit Card Companies and i think were just a little bit out of sync here when were taking an incremental step towards adding the pin but still leaving the signature in place when after all, we could have in that when you asking merchants to change out point of sale terminals just made the change. Were talking about a technology, chip and pin, a technology that has been in use for over 10 years, you know, all the major economyies in europe, parts of south america and other places use the technology. They have used the technology. There are studies that show reduction in the fraud that resulted from that, but still were relying on signature. Were relying on this 1970s technology. It is kind of like, why are we doing that . If were just going to make incremental step, why dont we put in what works today . Yes, we have, we vision shoes still with online. Were going to make sure we have a multifactor authentication. There are other issues but right now were taking the step to having merchants put something in place thats already out of date. To me that is the why. Why are we doing this . And you know, im a little bit of at a loss but some explanation im hearing is that the major merchants in the u. S. , which will soon be put at risk come october, so theyre potentially facing higher costs. We have consumers potentially at risk because of these data breaches with their personal information being identified. But to me the Credit Card Companies themselves are not taking as much of the risk. What we see here is, the fact is that the signature system allows them to take a higher transaction fee than the pin system does. So if you look over in europe where theyre able to do this, there is more competition for these systems. The end result is a lower transaction fee. If you look at the difference between the signature fee transaction fever sus the pin fee, that should represent to you a measure of market power. That is what it represents. So, i mean, lets look back at what happened with some of the major breaches. I mean had pins been in place on the current Magnetic Stripe systems we have, they would have hindered the ability of these thieves to have monetized these stolen cards. And that in effect would have end up making those cards less valuable. Now were talking about breaches such as happened in target. It is simple economics. So what youre trying to do here, if you think about a thief running their own business, what you want to do is you want to raise your marginal cost. The way you do that, you shift that curve to the left. You make it less valuable. You raise their costs. End result of that, like economics you get less fraud. It is as simple as that but were not moving towards that and i think what we have here today is market failure because when you look at difference between what the, transaction fee for the signature versus what would happen if the chip and pin, if you look at that that in itself represents, as i said before market power and that market failure, just speaks towards the need for a remedy to address this. Yet thieves will be smarter in the future. Well never going to catch up with this well always need somebody new in place. Right now we have something better. Were not taking that step. Were still sticking around with a 1970s technology, the signature. That is just a shame because it is going to require the merchant to go out to get another terminal down the road. And couple years later, another terminal. Most of these firms, i mean 80 of them have one employee or less. Theyre essentially, many of these are proprietors. What were doing adding costs, instead of trying to impose costs on thieves, were adding costs on merchants and consumers. And that i think is something that needs to change and i will stop right there, thank you. Thank you, steve. Thank you to all the panelists. We teed up a couple of great issues here. There is one that i want to get back to that three of our panelists raised. The issue of online transactions. So i heard both jon and steve bring it up. And, liz, before you mentioned that chip and pin could be used for online transactions. So, liz, i was wondering if you could just expand on that a bit. You even mentioned mobile transactions as well, so could you talk a little bit about that. Sure. Well, i think it comes back to the point of we are such late adopters of emv. There is so much more we can do as far as technology in the states and why arent we taking incremental steps . There are commercially Viable Solutions online to accept pins over internet. That is one important Consumer Protection we could put in. As jon pointed out, we saw up tick in the u. K. Without emv. Some large merchants are able to solve for that. Because their business is inherent solving for that, if they have over 90 ecommerce transactions. Theyre putting their own r d to come up with their own transaction fraud monitoring system. Small businesses could be really disadvantaged here if we dont have the wherewithal to find their own means to protect data better. There is off the shelf solution they could buy to pin protect internet transactions today. It comes back to what steve was saying about issuing emv without pins. It doesnt make sense in the u. S. I want to point out one thing, merchant terminals, chip and pin is interNational Standard, all have that chip slot but they have pin pads for us. Most merchants deploying terminals, could accept chip and pin tomorrow if they were able to program for it and if there were pins on the card. So the additional investment on our end would be programing issue more so than a hardware issue which is not difficult to do. You have to get in the technology queue. There are resource costs that go with it, time, employee costs that go with changing that software programing but it is very doable. The challenge that were facing here is, you know, were saying there, fraud will be going to be reduced by so much with emv. Are we creating a false sense of Consumer Confidence is one of the bigger issues. So there is another consumer argument that ive heard and i want to throw to the panelists. And that is that consumers would have a tough time remembering a fourdigit pin. I was wondering, we all have, we all have our money atm cards with four digit pin numbers. Im wondering if anyone wants to talk about that . Yeah, steve. Yeah. Just one thing. There was a study a few years ago that said that consumers on average you know, you know, remember eight pin numbers. So it is hard for me to understand why that would be an obstacle to be able to function. People do it today. I go in through a garage door, put my number in every time. Otherwise i dont get in my house. This is a twofactor, you know, step that i think is, its crucial. I dont think consumers are stupid enough that they cant remember that number. So i dont see that as a roadblock. I will weigh in real quickly too. I want to come back to couple things that bill said. I think it important to Work Together. Particularly consumers are bearing some fraud losses in the system but it is predominantly borne by merchants and issuers. Fed data shows combined we do 90 plus percent of all the fraud losses out there. I think information sharing has been key. We made Great Strides working with the Financial Services industry, retail has to further that informationsharing capacity and federal governments doing great things as well as marisa noted. I think that is one of them. You can easily lift a fingerprint and its more difficult than grabbing the number off of the card on the code. We need to see how biometrics are going to pan out. I can let that also something attached to my fingerprints. There is some security there but its not finite. I want to sound reasonable here and ask, if issuers think theres a Better Technology to authenticate the cardholder and youre ready to deploy that atms, we would love to work with you on figuring out the technology on the point of sale as well. Theres a lot here. A lot of questions and stuff that went on for the other panelists. Ive got a step back for a minute. We agree with you on the need for Data Protection legislation. I dont know all the specifics but i dont have strong Data Protection standard. When the financial industry are very much supportive of that sort of thing. That is why weve quite frankly been strong supporters of the nuke of our carny bill and the carp were blonde ale in the senate which has strong Data Protection standard and tens to raise people up to relatively the same level of protection of data. If we got together on legislation would all be better off and i can pledge to your industry is willing to work with you on that and hopefully the merchant and tumors on legislation across the finish line that deals with that. The other thing is its really interesting and back to the card. They are trying to really get out most of the fraud is going on today is about which is counterfeit cards. The pain would deal with a certain segment and declining area of fraud. What we are facing and we talked about the major retailer breaches have nothing to do with head. It was because they didnt protect systems or the back door. It had nothing to do with a pin transaction. It was their system for protecting data and how they store data that was the problem. To analogize the pain would have somehow prevented those or alleviated the impact is simply a misunderstanding of the situation. I understand something data was compromised and when somebody has your opinion, theyve got the keys to the kingdom. When i say static technology, thats what they mean. If somebody opens your mind and pfizer patent, you are in a world of trouble. We are trying to do with the majority of fraud. You mention the online stuff is great. Love to see those products come forward, but its all part of an overall gain. I am not here to promote any specific technology at Silver Bullet. I am here to say to you that weve all got to Work Together upon the multifactor, all kinds of evolving technologies. Encryption, tokenization. We are looking at a tree. We are not looking at the forest. We are looking at a pin as a single tree. The forest is all the other things going on out there. Thats what we need to Work Together on. Ive worked with you on other issues and id like us to work more closely on this issue. Everybody heard it here first. Tokenization encryption is a threepronged stool. John wants to jump in here. I appreciate you talking about the other bills that have been proposed. I think when we talk about Data Security while this panelists focused on current security, we also have two wonders and steves point earlier about the economics of fraud. Fraudsters tend to look for lowhanging fruit and byte emc will raise their marginal cost. No doubt about that. We are d. C. Front stairs starting to look at other types of information that they can sell medical information, for example, one with those credentials go for far more on the online dark markets than the credit card information because fraudsters understand the credit card credentials are protected by layer upon layer of banking retailer protection than actually turning those card credentials into merchandise they can resell is becoming harder. Things like medical information, information necessary to commit tax i. D. Fraud is all information forefront stairs. My point in mentioning that is i dont want to debate over em the insect card security and we need to hold up Data Security legislation that addresses in an important way all of the vulnerabilities that businesses and the government to the u. S. House. A good first step is a comprehensive law from congress that says you need to have reasonable Data Security. That is the baseline we can all agree on. We need to have strong enforcement of the federal trade commission which is done an amazing job with more tools. Unfortunately we tend to get hung up and has prevented very necessary reforms. Harper, blunt if of our bill. Strong enforcement will take care of that. A National Standard lets have a meaningful National Standard rather than reduced Consumer Protections to a lowest common denominator. We want high standard. Exactly. We are in agreement on. S. Consumer advocates of the Banking Industry coming together. I just cant resist a Consumer Education will play a huge role in all of days. The administration and the federal trade commission have done a great job on this but more resources put into this if folks havent visited info. Gov, it is a great resource for consumers to do that ms and 90 consumer advocate i have to caution you about flashing your credit card credentials on things like that. Covering the numbers. Can i provide a quick personal note on flashing your credit card number. Again, i guess i will jump in anyway. My wife took our car to the local car repair shop and my famous to be undisclosed virginia headquarter card was used in the transaction and it was a trusted merchant. Really love these guys. They do a great job, inspector cars every year and pass us which is even more. One glitch. My card unbeknownst to me comes somebody at the register wasnt even on the card reader. Somebody took a picture of my card, put it online and within four hours, my information was being used to try to buy a tv in boca raton, florida. My card Company Called me almost immediately. They stop the transaction. They knew that i lived in virginia and i wasnt in boca raton and they stop the transaction. Thats how sophisticated people are. He takes the stuff right off the card. That is the stuff we are dealing with and that is really dangerous stuff and we need to Work Together to work on that stuff and stop it. That is why technologies you talk about needs to be put in place. I admit there is some increment holiday to some of this stuff but weve got to be incremental to get there together at the end and its never been a change, never can stop and weve got to keep working together. Thank you for the interaction and discussion. Just before we move in a moment to author questions before we do know if i think it is great would have agreements for cooperative working together among many panelists here. I want to sum things up in what ive heard is most of our panelists have agreed that its a better layer of protection for credit card security while it is not going to guarantee that there will be no fraud moving forward pork simmers. Its a better layer. I did not say that. Is anybody less than clear. I spent most of our panel is. Its a better layer of protection for consumers with the exception of bill. With that said, we will move now to questions from all of you for our panelists. [inaudible] im going to push back on the signature issue because it seems to me youre comparing apples to oranges because pincer checks and authenticated when you put a pin in a device at point of sale. The signature is added in my lifetime 99. 9 of the time a signature is not checked. At a point of sale with the human being. They dont check your signature. How can you even compare if they check the signature, would it really be that much more authentication because now you are the human being standing in front of them rather than someone who might as the pain. Thats my question. Why dont they check your license number while you stand there . [inaudible] i would agree, signatures are a worthless form and are very easy the counterfeited. There is a reason we collect them and that is because we get chargeback transactions for issuers on a cardholder calling the bank and say we think this is a fraudulent transaction and we have to show record which we cant do at a fuel pump which is how we bear a lot of fraud. We maintain records of the signature for that process. Again, signatures are easy to counterfeit. It is not a good forum says something only the cardholder knows is much, much better. Also there are card network rules in the past that i is the merchant should not decline the sale tickets are no match. If i do i can be penalized for that for my ability to accept their card or in. That is another rationale that we have historically had challenges. To add onto that, speaking as a consumer advocate, i dont think the signature has been authenticated at all. As was mentioned, it is simply my signature agreeing to pay my bank back for what ipod from a retailer. I dont think the signature is an adequate authentication method. I will add onto that for many issuers, there is a very significant percentage of purchases they never require a signature at all. If youve ever purchased a hamburger from the donalds with your credit card, they dont require you to sign if it is below a certain dollar amount. There is a huge percentage of purchases just because of cardmember roles they dont require authentication whatsoever. The thing we should be asking ourselves is that they paint a somewhat better than the signature, why doesnt the industry have any incentive to innovate. It seemed like it would use simple thing to incorporate and of course we always hear the way the feeds are getting smarter from yeartoyear, once we figure this out though, put another way will have to be careful and coming up with it. The issue there is why dont we get the best thing now in place that went down the road we have to change it again to keep up with what is going on. Instead what im hearing is is legislated eventually get there which demands dragging our feet and pushing the cost to someone else. Let me say for our members, we basically provide the reliability for consumers. We bear the cost of unauthorized transactions and liz mentioned the fact they require a signature in order to protect them selves. Our members are actually paying for all of this and hold consumers harmless. When we get involved in data breaches to read the normal runofthemill fraudulent transactions, we are highly motivated to protect and make consumers whole. We dont spare any expense and effort to protect rumors because honestly its our lifeblood and also in our interests. To me we work on variety of different areas and its sort of like that is the solution. Its just not the solution. Liability shifts in the dover. Which will provide incentive for people to upgrade security standards. Incrementally as you said we believe that will address most of the fraud out there right now. I direct you back to the chart are regulated at nonregulated. The fraud losses much less an unregulated. We are talking one to 23 i think it is im not. Question right here from jason. Is very much. Congratulations on a great forum today. Great speakers and great information. Im from the Electronic Transaction association. I just wanted to play credit card industry historian for a moment and for the benefit of the audience, just mention something helpful to understanding why chip in and are talked about in the same sentence. Steve alluded to this endeavor were also the world ,com,com ma especially in europe and the chip was introduced 20 years ago as he correctly noted this is a 20yearold technology it came with a pin. I think an obvious question is why chip and pin implemented in europe. Anyone who sat in a cafe in rome and had a credit card product to them does it is just how it done overseas and not that way in the u. S. The reason is a telecom reason which steve and john and debbie and i will appreciate telecom geeks. When emp was deployed 21 years ago in europe, it was the first implementation of electronic authentication of credit Card Transactions where as in the u. S. The implementation of authorization of credit Card Transactions credit Card Transactions was with a Magnetic Stripe. The technology is that tapes we are familiar with. Europe doesnt have a Telecom Infrastructure we have in the u. S. Said the authorization of transactions doesnt take this online. It takes place on the device. Here in the u. S. When you start your card, that transmission goes to the network for authorization is done online. Theres a realtime authorization that takes place. In europe they dont have the answers are up sure we have here so have here said they couldnt authorize the city needed to develop a technology to allow the transaction to be authorized on the device, on the handheld merchant located terminal. The pain is authorized by the credit terminal in europe which says yes or no on behalf of the issuer because they cant get the realtime message. Chip and pin her deployed elsewhere because thats the only way to authorize transactions. In the u. S. We did it without because its authorized online. Again, not an answer to the question of whether it is great or kind of grade. Panelists have gone into that in great detail. History is important because it explains why we can deploy and still authorize transactions online. Thats a great point. I would like to make one clarification on that. Are you going to hinder microphone that before i do . [inaudible] i was absolutely the case in france when it rolled out in the early 90s and there was almost early emb chip and pins. In the u. K. Wrote it out, dated the transaction we do in the u. S. It wasnt entirely the communication with the terminal. More of an onlinebased transaction. There is historical reference for the technology we talk about here because it had been built up and i dare challenge you, but you are right historically that is why it was rolled out that way. Other people whove adopted prior to that twoday transaction online but we do here in the United States. Theres an International Presence for that as well. Thisll be the final note on this. That also meant merchants in the u. K. And france route europe deployed terminals that had pin pads because they were having not as part of the transaction. In the u. S. One of the complications is there are millions of merchants they didnt need them when the terminals were deployed. Thats obviously very different. We are accustomed to giving our card and make a while back. We dont have a device presented the way they do in europe. Thanks, jason. Right here question. If you could identify yourself. Policy director for congresswoman sheila jackson. I do question about smartphone enabled credit transactions. They provide the same protection are the transactions protect it by existing law and dubious transactions apply . Excellent question. Which one of our panelists would like to take that on . I apologize. I am in this year and i didnt hear the first part of your question. Could you repeat it . Way for the mic again. I want to know smartphone enabled credit transactions are covered under rules by the 50 limit if there is some compromises to the system. The second part of the question are these transactions protected by current law and if so which law. And the last part, due transactions meet the october 1st deadline . Bz answer is yeah. If they are under current law whatever current law applies to the online world applies to these and its a variety of laws. We can talk offline but theres a whole bunch of laws. And so it is basically different methods of doing it but all the laws would apply to transactions. The liability shift is a private sector negotiation and people have different views on them. That is really at Network World do you work out in the private sector. That is not a mandated federal hall. I would just weigh in. It depends on what laws regulate transaction under which the smartphone transaction is taking place. One thing that i will point out his merchants are encouraged to accept transactions as part of the emp liability shift. Basically the roadmap has vast merchant to deploy specifications except any cards loaded onto the phone. I would just add whether consumers are using a mobile Contactless Payment Solutions are the card of, if you detect fraud in the same advice applies. They are so protect the for credit and debit transaction that you notice im not. I would say even if you just loaded up half a dozen credit cards on mac, that does not mean you shouldnt be checking your credit card statement and disputing potentially fraudulent charges that may pop into the system. Right here in front. Hi, dave kerr from politico. Given the fact that pin only protects against loss and stolen card fraud, where is the study comparing the cost of pin implementation through the entire retailer processing is done against the fraud that would offset and in the lack of that study how can you be so certain of their advocacy . Well, you know, i think in my opening remarks i mentioned that chip enabled cards are a step forward for consumers. They are a step forward in it does address much of the fraud that occurs in counterfeiting today. What about you specifically. Do you have that data, lives or steve . I would look at the Federal Reserve study on debit. This is mostly large issuers covered by regulation and particular and it shows basis points of fraud are significantly lower than basis points of fraud overall. Something like 11 to three total. One of the challenges and why we need to Work Together more if that is poor and predominantly issuers and depend on the type of fraud. It is more borne by the issuer side. The signature debit card fraud, which is shared is about 64 d. Give or take issuer merchant and present fraud is anywhere between 70 and 100 for us. Overall fraud share is that out 64 d. Total. When you have to look in drill down into that number, the fraud loss total are so much lower. Looking back at the charts they are, it is very telling as far as how little fraud loss there are pin data. I dont think ive gone far enough for you. I dont think you have. How can you still where is it to say it is actually worth the money that it will cost the economy . Because it takes money to implement terminals, processing, backend systems. None of these things are free. Most merchants have programmed. I started out working for the grocery industry were 40 of transactions are pin transactions already in the cost of upgrading software to reduce fraud losses as much as you can on the transaction is absolutely there. A lower risk transaction area may be slower adopters. Quick Service Restaurants have not been high adopters because theres a basis point of fraud and not environment and its very low if fraud moves into the category, they will have to look at other ways to authenticate cardholders. Today, several merchants have been lucky not other technologies. People sat in the audience that pins are part of solving the problem but tokenization and encryption are two important technologies protecting ecosystem overall. When i look at payment deployment and acceptance strategy you look at factors that how can i make the best sense possible and how can i accept the most secure transaction in my environment. Right now the environment of a tag. Im sorry. We actually do have data we would like to share with you talking about the costbenefit analysis on this whole thing. Youve got to remember the stolen cards to as the declining part of the problem. I will jump in here for a second. Ive been trying to stay out of the battle on this one for a number of reasons. We have part of the Initiative Made a specific preference for paying enabled card. It goes back to what one of the panelists just sad that at the moment but will most secure the individual transaction. That said, we are also looking for an transactions and working with industry and researchers to see what is the next generation of enhanced security features and what should we be doing now recognizing we are behind the game. Everyone else has adopted ahead of us. We need to do more and tokenization, encryption and other forms but could have biometric of iris scans other things out there. We are excited when mastercard announced they were going to do biometrics. Medusa said they were going to tokenization and amex said multifactor authentication. I know chip and pin is the focus everyone but october 1 on the horizon. Take a step back and think that is october 1. We dont want to catch up with where the europeans are at 20 years ago. We want to make sure we continue to be american innovators that take that in the next step and it goes to something i mentioned in my opening remarks about how we include the consumer and understanding Identity Theft and management. Its about how we conceive of Identity Protection. But the biometrics, multifactor. I just want to again get the group to take a moment to step back. I think it means i got the last word that i dont know. Wonderful last word to end on. It is all about the consumer. Thank you so much for being here today. Thank you to our panelists. [applause] [inaudible conversations] [inaudible conversations] who are isis . Why are they so violent . All those questions are important but what is more important in some ways because we can do something about it is what is the u. S. Policy . Why is it working . Can we go to war against terrorism . Are we doing more wrong or is it wrong to say there should be a war against terrorism at all. Those are the questions that are the most important and will be the most useful. The National Urban league held its annual conference recently where attendees are from education secretary arne duncan, chair of the fcc Mignon Clyburn and a panel of Young Professionals to talk about education, jobs and justice in fort lauderdale, florida. This is that i welcome you to the opening plenary at the 2015 National Urban league conference. It is my honor to preside over this session but it seemed to be of great importance to identify the core of the next generation of leaders. We always have to be prepared to pass the torch, but who in our ranks as the ability, fortitude, intelligence and commitment to move the platform and agendais most important to our communities to the next level. Is that a conversation worth having . Do you agree . We will start this discussion at todays opening plenary, but it wont end today. Leaders in the fight for just as, education and jobs, economic equality, Political Parody or not a dime a dozen. It takes a certain strength too late. It takes integrity and the ability to keep fighting requires one to eat kobe and shaq. Despite fears that requires you to have guts and determination, to not give up. When its stacked against you it takes courage and compassion and it takes a love of people and that love is like the love that god has for all of us. It is not a role for the weak of heart and the speakers and panelists in attendance today but which address some aspect of the subject starting with their first speaker today, robert w. Runcie. Superintendent of the Broward County schools and superintendent of the nations sixth Largest School district. Robert runcie is committed to educating todays students to succeed in tomorrows world. Ladies and gentlemen, urban makers, please welcome, robert runcie. [applause] good morning, everyone. How are you doing . Thank you, president marc morial. Im honored to serve on the urban lake of Broward County and i want to take a second to give a special shout out to our local leader and president jermaine smith. She demonstrates the kind of tenacity and determination we will need to save our cities, save our country. We have all heard of the traveling and seemingly attract the ball statistics about the achievement gaps in our nations Education System were black and brown children, poor children, ways to vent than others on standardized assessment, Graduation Rates and college and career readiness. The gap becomes intensified by the school to prison pipelines were black males are disproportionately represented in the more than 3 million student suspensions that occur each year in this country. That is one for almost every teacher and classroom in america. Make no mistake the achievement gap is linked to the opportunity gap. We see increasing numbers of students showing up the classrooms each year, each day, struggling to overcome challenges of poverty, violence and homelessness. The future of our nation will be determined by how we treat our most vulnerable people. Now is the time for this generation to do what it takes to break the cycle of poverty for the next generation. I am here to tell you Broward County publics goals come in the sixth Largest School district in the country with over 265,000 students have the determination and tenacity to become the National Leader in closing the achievement gap and we would get this done. [applause] we will get this done by doing several things. Keeping our kids in our classrooms and not sending them to court rooms. [applause] weve implemented intervention programs to support kids having behavioral behavioral challenges than mussina 63 reduction in suspensions of Broward County the last couple years. Secondly, we will be redoubling efforts on Early Learning and literacy to ensure students are successfully making a transition from learning to read to reading to learn an advanced level by third grade. Third, we will build and continue to work on developing great relationships with Community Partners such as the urban lake and many other agencies we must work with collaboratively to ensure the success of all children. Finally, we must provide children with hope. We may show them every day that we love them and believe in none. Educating our kids is not a spectator sport. Lets all get in the game. May god bless you all with the strength and courage and wisdom to give our kids a fighting chance to achieve the american dream. Thank you. [applause] thank you, superintendent rent fee. All efforts begin and end with education. I would like to now bring to the stage federal Communications Commissioner Mignon Clyburn to give remarks. Mignon clyburn serves on the federal Communications Commission. The federal Communications Commission has a very important role. They oversee many emerging Tech Knowledge account the needs from the television stations, radio stations, telephone companies, Internet Companies and commissioner clyburn has been steadfast in pushing equity issues in my those industries. We are very proud she is with us today. Ladies and gentlemen, what an honor to recognize and present to federal Communications Commissioner Mignon Clyburn. [applause] good morning, urban lakers. What an honor it is for me to take part in the series annual convention. Save our cities. Education, jobs and justice. What a fitting the meso old late encapsulates event for the past year. If you would please allow me to speak about the progress weve made over the last 12 months because you rarely we focus on the good. We need to do better about that. As a nation with the improvement when it comes to education, the High School Dropout rate falling. We witness game on the job front, National Unemployment rate is decreasing family make incremental note are the steps when it comes to justice. We are witnessing a nation wide bipartisan conversation on criminal Justice Reform in seeing more scrutiny investigations and charges levied on those who may have fallen short of the oath they were swirled to abide by. Most often the proof is bolstered by a video. But it was not so long ago even this degree of per would not have made a bit of difference. As dr. King reminded us, Human Progress is either automatic or inevitable. Every step towards the goal of justice require sacrifice, suffering and struggle and the exertion and passionate concern of dedicated individuals, you are the individuals from president marc morial to the leadership of affiliates and volunteers to the urban lake yelping Young Professionals and the National Local staff and supporters, we are so grateful for your commitment to ensuring africanamericans and underserved populations have access to the training and support needed to receive a quality injustice. With out a doubt for progress and optimism we have are too often clouded by heartache and struggle. Supporters and sympathizers of black wives matter our heart ache but engaged and determined to bring about change. 11. 3 of africanamericans currently unemployed are hearts victor continue to struggle to support their family and search for opportunity. The nearly 500 counties in our nation classified as persistent poverty areas, communities disproportionately and desperately poor for 30 years or more. They are heartsick but many remain hopeful. They are longing and deserving of our support. Like you, i hear them and refuse to let the heartache wear me down or stifle resolve. Each of us is here today because we realize we are the architects and builders of change and hope. It may sometimes seem we are the only draft or send designers of the footprints and blueprint but we keep pushing. We keep moving to keep our heads down. For me, it is about providing opportunity through communication. We have witnessed real have witnessed real games on broadband and technology are used to tackle the most chronic societal problems. Our economy is growing and lives are more convenient whether difficult homework assignment, buying a plane ticket or seeking medical help, increasingly this is all less difficult when we are connected to the internet. Entrepreneurs are accessing new platforms and solving new problems. Rock band is breaking down barriers for minorities and the people with disabilities than the poor. When you are shopping online, you may never know the seller or purchaser what he or she looks like. Ive heard stories about people of color who are making much more money on line than they ever did when they were pounding the pavement knocking on those stories and facing rejection they concluded may have been due to longstanding prejudices and biases. Even if an equalizer of opportunity, even without broadband drinks, too many simply cannot afford to be good. Schools and libraries have inadequate broadband speeds. Community schools are not offering advanced placement or advance stem courses and this is putting our most bright, intelligent students at a competitive disadvantage. Companies that pay the best wages will never hire those who are not proficient and without each of us challenging High Tech Companies to recruit from hbcus statesupported schools without being a bridge for those who do not have the corporate context, our young people will never have the chance being employed by hightech companies there any other companies leaving our most talented unable to fully develop and market those excellent Business Ideas waiting to be unleashed. Our communities are being left behind and stuck on the wrong side of the opportunity divide, leaving them less likely to gain access to Venture Capital not works and this is why compassionate about connect the dots between the promise of broadband and the actual risk all to everybody flies. And determined and will commit to work with you to modernize their countries only though when comes telecommunications Adoption Program by making existing support for lifeline for support for broad income and not just Voice Service as it is today. We have heard relevant relevance, not cost is the reason we do not have connection at home. You know firsthand when you ask a private Senior Citizen on fixed income whether she wants to sign up for broad and, her dignity will not allow her to admit to you that she cannot afford the service. What she will tell you is that not relevant or she does not need to. But we know that is not the truth. The Pew Research Center reported africanamericans have adopted broadband faster than any other group in the past 15 years. They also reported the majority of those without broadband, Household Income lower than 30,000 a year. That is why we are committed to ensuring cost is no longer a barrier that this will only happen to partnerships with industry, government and all of you. Last week the Commission Voted to approve a merger between directv and at t. What you may not have heard his office worked with the company to design a program that will offer individuals and families eligible for snap the ability to purchase 10 megabits of broadband for 10 a month without any connection fees or hidden charges. For those who dont know what that means, access speed. You could affordably download instructional videos, give him a scare through telemedicine and start and maintain on their businesses. This could be the key for so many in our communities and villages so affordably. We recognize even if we create Larger Communications through mergers we have an obligation to account or Small Businesses and promote radio programming. I promise you ill never abandon those goals have called for proceedings to identify more opportunities and i will not quit until the fcc finally come that answers the calls of thousands of petitioners pleading for well over a decade for ruby from exorbitant telephone calling rates charged by companies that serve jails and prisons. We made a critical step two years ago. That did not solve the problems for the majority of the 2. 7 million children struggling to maintain contact with an incarcerated parent. Families, friends and legal aid lawyers by spelling out 400 to 500 a month to keep in touch with loved ones. They can afford it. Those clients are not the enable to serve those individuals. What company can afford 400 to 500 a month to protect and stand up for client . Theyre unable to stay connected and a thick consequence of not being able to stay in touch, they go home as strangers and im convinced that i know you know plays a role in 75 of those really said that behind bars within five years. I may not be able to stop every inmate from reoffending, but i can will do my part when it comes to those criminal Justice Reform. I can make a difference. You can make a difference so that costs will not be the main barrier for family and friends when it comes to maintaining contact with those incarcerated. The reason why this has gone on for so long is because too many of us have remained silent. We remain silent no more. But time is to stop ignoring the problem and free to push the fcc to finish what it started. The time is now to demand the 40 plus states to refuse to address the issue of unfair can make calling rates stop ignoring what an mtc calls attacks on pain for too many. We are also hope they have. Each of us has capacity and inability to push when needed, to prod when necessary to protect when warranted and deliver always. Let us use the hours they have to share with each other to sharpen our tools come and be enlightened by new concepts and strategies and get energized so we have stamina and needed to carry the torch of hope and change. I thank you, urban leaguers. I am working with you. I am yours, urban leaguers. Thank you very much. [applause] ladies and gentlemen, please welcome back to the National Urban that the secretary of education, arne duncan. First of all, good morning. Thanks for having me here. First of all, lets welcome secretary duncan back to the urban league, leaders and gentlemen. He has been with us many, many times. I want to start because youve really been in a trench working hard for six years as the presidenpresiden t secretary of education. I want to start by giving a long view as he looked back on the six years, what has been the most important part of the last six years when it comes to improving outcomes, education, things started. To be clear we have a long way to go. I would start Early Childhood education from the best investment we can make. Historically her department didnt do much there. What do more than a billion dollars behind steve want to increase access and quality. We are thrilled with that and we have a long way to go. On the k12 side with high school Graduation Rates at alltime high for the nation. 81 dropped rates significantly pared africanamerican dropout rates down 45 . Denigrates cut in half. That equates to 1. 1 million additional students to color going on to college. We are thrilled with that. One of the things were able to do, feather works for me and runs our students better late. We were able to put 40 billion behind cal grants without going back to paris for nichols. But the money into students and went from 6 million recipients to nine. We made progress at every level. We have a long, long way to go. [inaudible] we all know as a historic Civil Rights Organization that 50 years ago president johnson at the elementary and secondary education act in a book so its evolved over the years. In and the debate is about what it ought to look like as Congress Considers reauthorization of renewing the law. Data. What should we be looking at and of course weve been in a trench. Mostly aligned, but i think people would like to hear bird is because some of it is played inside the beltway. First off the no child left behind law has been broken for a long time. Congress has been broken and pretty dysfunctional as well. What weve done is stepped in and provided waivers. Dysfunctional . We provided waivers to get to the onerous parts to maintain accountability. More so in the senate than the house and the house is a goodfaith effort. You have republicans and democrats the first Time Starting to Work Together to get the right point. I wonder thank you so much in the urban league and other Civil Rights Organizations. This is not an education law. Its a civil rights law. We have to make sure what their kids get educated or not is not a statebystate decision. I always say this isnt the right thing to do for the black community. This is the right thing to do for our country. But the First Time Ever nations schools majority minority of either we help every child is successful and have Strong Families and communities and a strong nation or the whole nation will struggle and having you another stand up and say we need to be held accountable and make sure young people are graduating and measuring progress each year. The voice of the Civil Rights Community is extraordinarily. Other voices they walk away from accountability. What states do what they wanted districts do they want and we know what happens sometimes when we give folks a pass. A word often do [inaudible] testing. His works, my investment. We will pass it back and forth. About what accountability really means and what accountability should we have. One of the things people tend to forget is the elementary and secondary education act involves a big commitment to elementary and secondary education. How should we think about the word accountability . What does that mean in real terms . Uni and everyone near put up billions of dollars of each year. Were asking for another billion dollars but we need to make sure from a fiscal standpoint that investments resulting to closing insidious achievement gaps and they climb and dropout rates go down. It is not just about the financial part. It is giving kids a chance in life