Credit reporting firms should register with New York: Cuomo

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(Reuters) — New York’s governor announced plans on Monday to require all credit reporting agencies to register with the state, while federal authorities reportedly opened a criminal probe into Equifax Inc. executives’ stock sales before the company disclosed a massive data breach.

The U.S. Justice Department is looking into whether Equifax Chief Financial Officer John Gamble; Joseph Loughran, president of U.S. information solutions; and Rodolfo Ploder, president of workforce solutions, broke insider trading rules in selling stock after the breach was discovered in July and before it was disclosed in early September, Bloomberg reported on Monday.

Shares of Equifax, which have fallen about a third since the hack was announced, slowed their slide on Monday but were down 0.3% at $92.69 in midday trading.

Equifax has said the executives were unaware of the hack when they sold the stock for $1.8 million.

In New York, Gov. Andrew Cuomo said he planned to require all credit reporting agencies to register with the state and comply with its cyber security rules.

The proposed regulation, ordered after Equifax’s breach exposed sensitive data of up to 143 million people, would take effect in February, a statement from Gov. Cuomo said. If the companies do not register, they risk being barred from doing business with financial companies regulated by the state.

Gov. Cuomo said credit reporting agencies, including TransUnion and Experian P.L.C., each year would have to report their officers or directors who are responsible for compliance with laws and regulations involving financial services, banking and insurance.

The state would also be able to bar a credit reporting agency from doing business there if it is found to engage in “unfair, deceptive or predatory practices,” the statement said.

Proposed regulations are typically subject to a period when the public may comment on them before they become final.

The Justice Department and the three credit reporting companies did not immediately respond to requests for comment.

“The Equifax breach was a wake-up call,” Gov. Cuomo said in the statement, “and with this action, New York is raising the bar for consumer protections that we hope will be replicated across the nation.”

A New York State cyber security regulation, the first of its kind in the United States, took effect on March 1. It requires financial firms to take measures to protect networks and customer data from hackers and disclose cyber events to state regulators.

An unknown number of people have struggled to use the Equifax website to get promised free credit monitoring or freezes.

Adam Levitin, who teaches at Georgetown University’s law school, tried several times to freeze his account, an action that would bar thieves from illegally applying for credit in his name. The Equifax site would appear to take several screens’ worth of data but would not finish the process.

“I tried again at 1 in the morning, and it went through,” he said. “Equifax has two problems. The first is the data breach, and the second is the customer service problem.”