Lawmakers probe large data breaches at US bank insurance agency

The FDIC saw about 160,000 personal bank records leave the agency on removable media in recent months

The personal banking information of about 160,000 U.S. residents walked out the door of the federal government's bank insurance agency on removable media of employees departing in recent months.

During the last seven months, seven departing employees at the Federal Deposit Insurance Corporation (FDIC) have left with personal banking information on thumb drives and other removable media, agency officials told a congressional subcommittee Thursday.

The FDIC, which provides deposit insurance to U.S. bank accounts, considered the data breaches as "inadvertent" copying of personal banking information that happened when departing employees were copying personal information to removable media, Lawrence Gross Jr., the FDIC's CIO, told the House of Representatives Science, Space, and Technology Committee's oversight subcommittee.

But in one case, the ex-employee denied downloading material and resisted turning it back over to the agency, lawmakers noted. One of the data breaches is the subject of a criminal investigation, said Fred Gibson, the FDIC's acting inspector general.

Lawmakers accused the FDIC of not taking the breaches seriously.

"Mr. Gross, you and I are viewing this incident from a completely different perspective," said Representative Bill Posey, a Florida Republican. "[You] call it a data breach. Where I'm from, we call it a theft if you take something that's not yours."

The FDIC didn't immediately report the incidents as major breaches to Congress until prompted by its inspector general's office, despite new guidance from the Office of Management and Budget to report serious breaches within seven days. 

Lawmakers questioned what they called a lack of transparency at the FDIC and a security policy that allows departing employees to download information from their hard drives.

"Regrettably, the American people have good reason to question whether their private banking information is secured by the FDIC," said Representative Barry Loudermilk, a Georgia Republican. "The agency is failing to safeguard private banking information."

The agency has a "long history" of cybersecurity problems, he added. Before the recent removable media incidents, a foreign government in 2011 hacked into the computers of senior officials at the agency and was undetected for more than a year.

Gross, hired as the FDIC's CIO just last November, said he didn't originally classify the removal media incidents as major breaches because they appeared to involve accidental copying of files during "nonadversarial" departures of employees. The former employees involved have signed affidavits saying they didn't share the data with others, he said.

Still, one of Gross' top priorities as CIO is to revamp the agency's policy about removable media and to add security safeguards to block downloads of personal data, he said.

Most employees now cannot download FDIC data to removable media, and the agency is adding digital rights management software to its network, he said.

"At the FDIC, we are keenly aware that protecting sensitive information is critical to our mission of maintaining stability and public confidence in the nation's financial system and we are continually enhancing our information security program," Gross added.

Join the CSO newsletter!

Error: Please check your email address.

More about BillFederal Deposit InsuranceFredHouse of RepresentativesOffice of Management and BudgetTechnology

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by Grant Gross

Latest Videos

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

  • 150x50

    IDG Live Webinar:The right collaboration strategy will help your business take flight

    Speakers - Mike Harris, Engineering Services Manager, Jetstar - Christopher Johnson, IT Director APAC, 20th Century Fox - Brent Maxwell, Director of Information Systems, THE ICONIC - IDG MC/Moderator Anthony Caruana

    Play Video

More videos

Blog Posts

Market Place