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October 2, 2014

CUNA investigates CU costs of Home Depot breach

WASHINGTON (10/2/14)--In an effort to assess the damages, costs and all potential consequences of the recent Home Depot data breach, the Credit Union National Association is conducting a survey on the impact of the breach on credit unions. CUNA is distributing the survey to credit unions that offer debit and credit cards.

"I assure you we are pulling out all the stops to let policymakers know just how serious the effects on credit unions are of the growing number of data breaches," wrote CUNA President/CEO Jim Nussle in an email to credit unions.

"To help us deliver the message here in Washington," Nussle said, "we need to know more about the effects of this latest data breach on your credit union."

The survey is seeking information on:
  • The total number of debit and credit cards currently issued to members;
  • The number of cards that were affected by the Home Depot data breach;
  • The number of cards reissued or planned to be reissued as a result of the breach; and
  • Estimates of the costs the credit union has incurred as a result of the breach for card reissuance, fraud and all other costs.
Survey results will be reported in aggregate form and used to further CUNA advocacy efforts on the need for greater data security standards for merchants.

CUNA has asked for survey replies by Oct. 24.

The trade association executed a similar survey on the 2013 Target breach and found that credit unions incurred $30.6 million in costs directly related to the breach--not including fraud costs. The average cost per affected card was $5.68, and 4.6 million cards were compromised, the survey found. ReadMore

Nussle takes CUNA helm is No. 1 story of Sept. Top 10

CU System
MADISON, Wis. (10/2/14)--An article on the hiring of Jim Nussle, a former eight-term congressman and director of the White House Office of Management and Budget for President George W. Bush, as the new president/ CEO of the Credit Union National Association was the most-read News Now story in September.
Data security continued to dominate credit union news in September. Four of the Top 10 stories were related to data security and data breaches.
The 10 most-read News Now articles in September:
10. CU payments providers seek Apple Pay inclusion
MADISON, Wis. (9/11/14)--In light of Apple's announcement of its new mobile payment system--Apple Pay--CO-OP Financial Services and Fiserv are working to ensure credit unions are part of that payment environment.
9. Two CUs file suit against Home Depot
LAKEWOOD, N.Y., and NEWCASTLE, Pa. (9/25/14)--Two Northeastern credit unions have filed a pair of lawsuits against Home Depot, alleging that financial institutions nationwide have suffered millions of dollars in damages as a result of the data breach that befell the home improvement retail chain recently.
8. Matz to request revised RBC proposal, new comment period

ALEXANDRIA, Va. (9/29/14)--National Credit Union Administration (NCUA) Chair Debbie Matz announced she intends to request a revised proposed risk-based capital rule be issued with a new comment period. This is a result of "significant structural changes" being considered. CUNA requested a second comment period prior to issuing a final rule.
7. Refuting ABA chief, Hampel points out real difference of CUs

WASHINGTON (9/8/14)--The real reasons behind credit unions' success are their cooperative ownership structure as well as a good amount of public trust, reminded CUNA interim President/CEO Bill Hampel.
6. CUs, members need data security protection, CUNA urges

WASHINGTON (9/5/14)--The implications of a recent data breach at Home Depot--which has the potential to dwarf that of last year's Target Corp. incident--could weigh heavily on credit unions.
5. Home Depot 2nd-largest breach with 56M compromised cards
MADISON, Wis. (9/22/14)--Home improvement retailer Home Depot confirmed last week that the recent five-month data breach compromised 56 million credit and debit cards--second only behind the Heartland Payment Systems breach in 2009. But what does this mean to the average consumer?
4. Jimmy John's: Vendor data breach impacts 216 stores

MERRIFIELD, Va. (9/25/14)--Nationwide sandwich chain Jimmy John's confirmation Wednesday of a payments-vendor breach that compromised customer information at 216 locations in 39 states is yet another example CUNA and credit unions advocate passing laws making merchants more responsible for such intrusions.
3. Fed plans no debit fee cap change

WASHINGTON (9/18/14)--The Federal Reserve Board today said it will not propose any changes to its cap on debit card interchange fees. The Fed said the decision is based on results of its survey of costs associated with debit card transactions, a survey it executes every two years.
2. FOMC: QE likely phased out next month

WASHINGTON (9/17/14)--The Federal Open Market Committee said in today's policy statement that quantitative easing (QE), a tool the Fed has used to stimulate the economy since the economic downturn in 2008, likely will be entirely phased out next month.
1. Jim Nussle, former House Budget Committee chair/director of OMB, named president/CEO of CUNA
WASHINGTON (9/9/14)--Jim Nussle, a former eight-term congressman and director of the White House Office of Management and Budget for President George W. Bush, is the new president/ CEO of CUNA, the chairman of the nation's largest trade group for credit unions announced today. ReadMore

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ICU Day sparks month-long celebration of the CU difference

CU System
MADISON, Wis. (10/2/14)--With the official International Credit Union (ICU) Day two weeks away, credit unions and state leagues are gearing up to demonstrate the credit union difference throughout October.
In Georgia, credit unions are promoting a Switch to Save campaign that helps consumers identify savings on loans. A member or potential member can bring in two months of statements from another financial institution to determine if switching their loan to the credit union will save them money, according to the Georgia Credit Union Affiliates (GCUA).
"During International Credit Union Week, credit unions will say thank you to the members that use their services now and 'give it a try' to those that have not yet joined a credit union," said GCUA President/CEO Mike Mercer.
The Northwest Credit Union Association (NWCUA) will prepare its member credit unions for a Pay It Forward campaign. During next week's Amplify convention, NWCUA will hand out random stacks of cash to attendees. The stacks of money--to be given to away on Oct. 16--symbolize the savings credit unions generate for their members every day, according to NWCUA ( Anthem Sept. 29).
While handing out the cash, credit unions can take the opportunity to share the credit union difference. NWCUA advised them to tell recipients that "Credit unions in the Northwest save households an average of $114 per year. Today we're paying it forward into our community. This cash is yours, no strings attached."
Credit Unions for Kids will hold Shop for Miracles, a one-day fundraising program to support local Children's Miracle Network Hospitals. Every time a member of a participating credit union swipes his or her credit union-issued credit or debit card, the credit union will donate 25 cents, or another predetermined amount, to a local Children's Miracle Network Hospital.

Shop for Miracles is sponsored by the Credit Union National Association, the World Council of Credit Unions and Credit Unions for Kids.
CO-OP Financial Services also will tie its Miracle Match program to Shop for Miracles, matching funds dollar-for-dollar up to $10,000 with certain participating credit unions.
Watch News Now for more coverage of ICU Day events. ReadMore

NCUA highlights resources during Cybersecurity Awareness Month

ALEXANDRIA, Va. (10/2/14)--October marks the beginning of the 11th annual Cybersecurity Awareness Month, and the National Credit Union Administration is using the occasion to urge credit unions to be proactive in protecting themselves and their members from data theft.

The NCUA reminds credit unions that the agency posts tips on protecting information on its @MyCUgov Twitter account, Facebook page and will do so in the upcoming October issue of The NCUA Report .

"In the last six months, we learned about two significant vulnerabilities, Heartbleed and Shellshock, which presented serious threats to security. A credit union could be the target of an attack, or someone could try to use a credit union as a conduit to attack other businesses," said NCUA Chair Debbie Matz in a release Wednesday. "With so much of our lives tethered to the flow of personal information across the Internet, protecting that information is a constant responsibility."

NCUA's website has a dedicated page for cybersecurity resources on preventing, detecting and responding to cybersecurity threats, as well as regulations and guidance.

The Federal Bureau of Investigation's Internet Crime Complaint Center earlier this year logged its 3 millionth consumer complaint, and the total estimated dollar loss from those complaints is $3 billion. The Center for Strategic and International Studies in June estimated the annual global cost of cybercrime to be between $375 billion and $575 billion.

The Credit Union National Association recently wrote to President Barack Obama, asking him to establish a Cybersecurity Council that would develop an approach to cybersecurity issues. CUNA also surveyed credit unions on how the Target data breach affected them and is currently requesting the same information from credit unions on effects of the Home Depot data breach. (See related story: CUNA investigates CU costs of Home Depot breach.)

Defense CU Council salutes top military CUs

CU System
WASHINGTON (10/2/14)--The Defense Credit Union Council betowed its Distinguished Service awards to five credit unions from each department of the U.S. military last month during the council's 51st annual conference.

Credit unions serving the Army, Navy and Air Force were honored for the work they do serving the U.S. military community at home and abroad.

The criteria for the awards generally included delivery of financial services "above and beyond normal requirements;" special services provided at the command's request; financial education and training; action taken to combat predatory lending; community support; and professional attitude and financial leadership.

The Department of the Army honored Service CU, Portsmouth, N.H., with $2.4 billion in assets, for its outstanding commitment to community financial education and combating predatory lending. The credit union, with a branch in Grafenwoehr, Germany, also was recognized for its "tireless" support of on-base programs.

"Their unrivaled ability to support servicemembers worldwide and through multiple remote access channels enhances individual and unit readiness as well as insuring financial soundness of soldiers' families here in Germany," said U.S. Army Garrison Grafenwoehr Commander James Saenz. "Ultimately, their 'service' helps our troops focus on the important mission at hand."

Service CU also was the sole funding source for the 2013 USO Thanks for Thanksgiving Dinner and the USO Holiday dinner. The credit union also provided financial support for programs such as the USO Fridge Fund and Grafenwoehr Military Spouses Day.

The Department of the Navy gave its awards to both Pacific Marine CU, Oceanside, Calif., with $708 million in assets, and Navy FCU, Merrifield, Va., with $58 billion in assets.

Pacific Marine at the Marine Corps Recruit Depot in San Diego was honored for its work helping active-duty servicemembers avoid predatory lenders and for assisting them in establishing or re-establishing credit through free financial literacy programs.

Finally, the Department of the Air Force gave the award to both Travis CU, Vacaville, Calif., with $2.2 billion in assets, and Air Force FCU, San Antonio, with $372 million in assets.

Travis CU, which earned the honors in the more than $1 billion-asset category, was recognized for helping members battle predatory lenders by providing low-interest lines of credit to pay off predatory lender high-interest accounts, and for offering its own small-dollar loan product.

Travis also was pegged for the award for its support of military children through the "My Life: A Kids Journal" and KUDOS (Kids Understanding Deployment) programs, and for its focus on financial literacy. The credit union offers financial literacy classes, debt counseling and budgeting seminars to members at Travis Air Force Base. ReadMore

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Social media presence supports CUs' credibility, says CUNA expert

CU System
MARLBOROUGH, Mass. (10/2/14)--Participating in social media helps organizations establish credibility and authenticity with their audience, Amaia Stecker, senior social media and digital media manager for the Credit Union National Association, told a group of seminar participants hosted by the Massachusetts, New Hampshire and Rhode Island credit union leagues.
Click to view larger image Amaia Stecker, senior social media and digital media manager for the Credit Union National Association, addresses attendees at a seminar on social media hosted by the Massachusetts, Rhode Island and New Hampshire credit union leagues. ( Daily CU Scan Photo)
In addition to managing social media for CUNA, Stecker oversees, the website launched by CUNA and leagues, which, in part, helps consumers find a credit union to join.
"Amaia brings a tremendous understanding of how consumers use this media as well as an understanding of how credit unions can use it to their strategic advantage," said Paul Gentile, president/CEO of the leagues ( Daily CU Scan Oct. 1).
The Tuesday session covered the social media options available and the advantages each offers to credit unions. "Social media is a tool just like television, radio or print," Stecker said. "You have to understand it and then figure out how to make it work for your credit union."
Most of the credit unions represented in the group were active on social media. Facebook was the most commonly employed platform, but most credit unions maintained a presence on Twitter and LinkedIn as well. Stecker counseled the group to make sure that they commit to quality posts and a consistent schedule.
In the open discussion, participants agreed that there is an undeniable need for credit unions to participate in social media. Stecker noted that participating in social media makes organziations appear more in touch with their audience in a 24/7, connected world. ReadMore

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Good news for economy can mean challenges for rate risk: NCUA

ALEXANDRIA, Va. (10/2/14)--A solid second quarter for the U.S. economy has been good news for credit unions, but a change in interest rates could prove challenging, said National Credit Union Administration Chief Economist John Worth in the agency's latest economic update video.

This month's video features Worth discussing recent economic data and Federal Reserve statements about monetary policy and what it would mean for credit unions.

"Our chief concern is that credit unions be aware and prepared for the possibility of rising short-term rates," Worth said. "Credit unions should have a firm idea of how their income statements and balance sheets are affected by a rapid rise in short-term rates."

Worth cited the Federal Open Market Committee (FOMC), which stated that in the likely event the economy continues to improve into 2015, short-term interest rates are likely to rise.

"The federal funds rate that policymakers feel will be appropriate, given the improving economy, is about 1.25% at the end of 2015, nearly 3% at the end of 2016 and more than 3.5% at the end of 2017," he said. "It's important to note that [Federal Reserve] Chair [Janet] Yellen, speaking for the FOMC, continues to emphasize that policy is data-driven. That is, if the economy improves more quickly than expected, rate hikes could come more quickly and be larger."

The NCUA encourages credit unions to explore the agency's interest-rate risk resource Web page to better understand the risk those changes present.

Use the resource links below to access the video and the NCUA's interest-rate risk Web page. ReadMore

SBA continues fee waiver on small-dollar loans, expands relief for vets

WASHINGTON (10/2/14)--Fee relief for Small Business Administration (SBA) 7(a) guaranteed loans will be extended through fiscal year 2015, the agency announced Wednesday.

The relief was implemented last year and was set to expire Sept 30. The SBA also announced fee-relief measures for SBA Veterans Advantage loans will be renewed as well as enhanced. Both the extensions will remain in effect through Sept. 30, 2015.

Under the original fee relief for 7(a) loans that began Oct. 1, 2013, both the upfront guaranty fee and the annual servicing fee were reduced to zero on loans $150,000 and under. For loans larger than $150,000, the annual servicing fees paid by lenders will be 0.519% of the guaranteed portion of the outstanding balance of the loan.

The Credit Union National Association urged the SBA earlier this year to continue the fee relief beyond the original Sept. 30 expiration date ( News Now March 18). CUNA's then-President/CEO Bill Cheney called the waiver "an effective way to increase borrower participation in this important SBA loan program."

SBA Administrator Maria Contreras-Sweet said the agency does not want its fees to be an impediment to getting capital out to communities, "where it can make a game-changing difference, especially to our underserved communities who use these small-dollar loans more frequently."

As of Sept. 12, the SBA had guaranteed 28,806 loans of $150,000 or more, totaling $1.74 billion, up from 23,337 loans and $1.34 billion in fiscal year 2013. This is an increase of 23.4% and 30%, respectively. Fee reductions on these loans resulted in almost $19 million in savings to small business borrowers in fiscal year 2013, according to the SBA.

For SBA Veterans Advantage loans, the conditions implemented Jan. 1, 2014--zero upfront guaranty fee to veterans on all SBA Express loans of $150,000 up to $350,000--will also remain unchanged for fiscal year 2015.

The agency also announced that, starting Wednesday, the upfront guaranty fee will be reduced by 50% for non-SBA Express loans from $150,000 up to $5 million. There is no reduction on the annual servicing fee for loans over $150,000.

According to the agency, 70% of all SBA loans made to veterans are $350,000 or less. As of Sept. 20, the SBA has guaranteed 153 loans for $38,861,900 under Veterans Advantage. Fee relief for these loans resulted in roughly $571,000 in savings. ReadMore

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