Fed to step-up focus on payment security with study, working groups: Fed's Powell

WASHINGTON (Reuters) – The U.S. Federal Reserve is stepping-up its focus on payment security as the industry reaches a “critical juncture” driven by new technologies, Federal Reserve board governor Jerome Powell said on Wednesday.

Speaking at a conference in New York, Powell said the U.S. central bank would early next year launch a study analyzing payment security vulnerabilities and also planned to create new working groups focused on reducing the industry costs associated with securing payments.

“Rapidly changing technology is providing a historic opportunity to transform our daily lives, including the way we pay. Fintech firms and banks are embracing this change, as they strive to address consumer demands for more timely and convenient payments,” said Powell.

“It is essential, however, that this innovation not come at the cost of a safe and secure payment system that retains the confidence of its end users.”

The Fed does not have complete authority over the U.S. payment system, but it has led industry efforts to make it faster and easier to use. The central bank also leads the 160-member Secure Payments Task Force.

Powell’s comments underline growing concerns among financial market participants and regulators about the risks cyber thieves pose to the financial system following a series of recent incidents.

Last year, SWIFT, the global financial messaging system, disclosed it had suffered hacking attacks on its member banks including the high-profile $ 81 million heist at Bangladesh Bank.

During that incident, hackers broke into the computers of Bangladesh’s central bank and sent fake payment orders, tricking the Federal Reserve Bank of New York into transferring the funds. [here]

Powell said on Wednesday new fintech payment companies posed “significant challenges to traditional banking business models” and that the payment system was reaching a “critical juncture.”

His comments echoed those of Barclays Chief Executive Officer Jes Staley who on Saturday warned payments would be the next battleground for banks amid increasing competition from fintech players and tech giants including Amazon and Facebook.

Reporting by Michelle Price; Editing by Chris Reese

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IRS puts Equifax contract on hold during security review

NEW YORK (Reuters) – The U.S. Internal Revenue Service has temporarily suspended a contract worth more than $ 7 million it recently awarded to Equifax Inc following a security issue with the beleaguered credit reporting agency’s website on Thursday.

Equifax, which disclosed last month that cyber criminals breached its systems between mid-May and late July and made off with sensitive data on 145.5 million people, said on Thursday it shut down one of its website pages after discovering that a third-party vendor was running malicious code on the page.

“The IRS notified us that they have issued a stop-work order under our Transaction Support for Identity Management contract,” an Equifax spokesperson said on Friday.

“We remain confident that we are the best party to perform the services required in this contract,” the spokesperson said. “We are engaging IRS officials to review the facts and clarify available options.”

The IRS is the first organization to say publicly that it is suspending a contract with Equifax since the credit reporting agency’s security problems came to light.

Atlanta-based Equifax said its systems were not compromised by the incident on Thursday, which involved bogus pop-up windows on the web page that could trick visitors into installing software that automatically displays advertising material.

Still, the IRS said it decided to temporarily suspended its short-term contract with Equifax for identity-proofing services.

“During this suspension, the IRS will continue its review of Equifax systems and security,” the agency said in a statement. There was no indication that any of the IRS data shared with Equifax under the contract had been compromised, it added.

The move means that the IRS will temporarily be unable to create new accounts for taxpayers using its Secure Access portal, which supports applications including online accounts and transcripts. Users who already had Secure Access accounts will not be affected, the IRS said.

IRS granted the $ 7.25 million contract to Equifax on Sept. 29, weeks after Equifax disclosed the massive data hack that drew scathing criticism from several lawmakers.

“From its initial announcement, the timing and nature of this IRS-Equifax contract raised some serious red flags … we are pleased to see the IRS suspend its contract with Equifax,” Republican Representatives Greg Walden and Robert Latta said in a joint statement on Friday.

“Our focus now remains on protecting consumers and getting answers for the 145 million Americans impacted by this massive breach,” they said.

Government contracts in areas such as healthcare, law enforcement, social services, and tax and revenue, are major sources of revenue for Equifax.

In 2016, government services made up 5 percent of Equifax’s overall $ 3.1 billion in revenue, accounting for 10 percent of its workforce solutions revenues, 3 percent of its U.S. information solutions revenues, and 7 percent of its international revenues, according to a regulatory financial filing.

Reporting by John McCrank in New York; additional reporting by Dustin Volz in Washington; Editing by Bill Rigby

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?Serious Linux kernel security bug fixed

More security news

Sometimes old fixed bugs come back to bite us. That’s the case with CVE-2017-1000253, a Local Privilege Escalation Linux kernel bug.

This is a problem with how the Linux kernel loaded Executable and Linkable Format (ELF) executables. If an ELF application was built as Position Independent Executable (PIE), the loader could allow part of that application’s data segment to map over the memory area reserved for its stack. This could cause memory corruption. Then, an otherwise unprivileged local user with access to a Set owner User ID (SUID) or otherwise privileged flawed PIE binary, could gain higher-level user privileges.

Linux processes

Qualys, a security company, worked out a way to exploit this hole. By smashing the PIE’s .dynamic section with a stack-based string operation, they found they could force the ld.so dynamic linker to load and execute their own shared library.

This security hole may sound complicated, but it’s relatively easy to exploit. Since it could give an ordinary user super-user privileges it’s potentially very dangerous.

This bug, and its fix, are actually old. It was first uncovered in 2015 by Michael Davidson, a Google software engineer. It was fixed in the 4.0 Linux kernel. To be exact, Davidson repaired the kernel bug with a patch committed on April 14, 2015.

What neither Davidson, nor anyone, realized at the time was that what appeared to be a minor bug could be exploited.

Since the bug was patched over two years ago, you might be wondering, “Why does this matter?”

The problem is that the bug lived on in long-term support (LTS) versions of Linux, which are often used in server Linux distributions. In particular, Qualys found that “All versions of CentOS 7 before 1708 (released on September 13, 2017), all versions of Red Hat Enterprise Linux 7 before 7.4 (released on August 1, 2017), and all versions of CentOS 6 and Red Hat Enterprise Linux 6 are exploitable.” The bug is also present in Debian-based Linux distributions.

If you’re running an up-to-date Linux desktop, you have nothing to worry about. These use modern kernels rather than LTS kernels.

With a Common Vulnerability Scoring System, version 3 (CVSSv3) severity score of 7.8, system admins should patch the bug as soon as possible. Since the major Linux distributors were aware of the security hole before it was announced, all a system administrator needs to do is their usual package management program to patch the kernel or install a patched kernel, and reboot.

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