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Capital One Hack Shows Fed Needs to Police Cloud, Democrats Say

Lawmakers say the three companies may be “systemically important financial market utilities.”

Joe Light (Bloomberg) -- Capital One Financial Corp.’s massive data breach shows that financial regulators should consider designating major cloud providers as “systemically important,” a pair of Democratic lawmakers said last week in a letter to Treasury Secretary Steven Mnuchin.

The request, made by Representatives Nydia Velazquez of New York and Katie Porter of California, could lead to Amazon Web Services, Microsoft Azure and Google Cloud getting tough oversight from the Federal Reserve and other watchdogs.

The lawmakers’ said the three companies may be “systemically important financial market utilities” in light of their central role in helping to manage the data of large financial institutions. Last month, Capital One revealed that a former Amazon cloud-services employee illegally accessed data from about 100 million people in the U.S.

“Though the cloud service providers at issue may not process monetary transactions directly, their operational stability underpins an increasing share of banks’ central functions,” the congresswomen, who sit on the House Financial Services Committee, wrote in the letter.

They asked Mnuchin for a response by September 15.

TAGS: Cloud
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