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68% of businesses unprepared to respond to data breach: Experian/Ponemon

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COSTA MESA, Calif. (10/1/14)--Recent high-profile data breaches at stores such as Home Depot and Target have brought the issue of cybersecurity front and center for many businesses. 

While many organizations are stepping up investment into security and response plans, however, a recent study by Experian in collaboration with the Ponemon Institute found that, despite a heightened awareness, executives aren't confident in their abilities to respond to a serious attack.

Nearly 70% of respondents said they feel unprepared to respond to a breach, the study found, while 78% haven't or don't regularly update their plans to evolve with changes in potential threats.

Further, 30% of respondents believe their data breach response plans would be ineffective.

The Ponemon/Experian survey was sent to 14,639 U.S. executives and 567 responded. Of the respondents, financial services executives comprised the largest segment at 19%, followed by healthcare and pharmaceuticals at 13% and public sector executives at 11%.

The Credit Union National Association continues to urge federal lawmakers to require merchants to comply with more stringent data security requirements.

Currently, CUNA's leaders say, merchants are not held to the same high security standards required of financial insitutions, despite the fact that the vast majority of breaches are occurring at merchants' stores. (See related story: CUNA seeks White House action on cybersecurity.)

"While more organizations have data breach preparedness on their radar and have developed a response plan, a majority of companies are not putting the support and resources behind having it truly be effective," said Michael Bruemmer, vice president of Experience Data Breach Resolution.

"A checklist response plan alone doesn't mean you're prepared," Bruemmer added. "There should be an incident response team in place that practices the plan, and ongoing investment from the C-suite to ensure technologies are up-to-date; external breach experts are secured; and selection of an identity protection product for affected customers is determined prior to an incident to ensure a quick and smooth response."

Encouragingly, however, executives do recognize what needs to happen to improve their organization's incident response protocols.

The study found that 70% of executives want more oversight and participation from board members, chairmen and CEOs for data breach preparedness, and 77% suggested that more "fire drills" to practice responses to data breaches would help them be more prepared.

"Compared to last year's study results, survey findings show encouraging signs that organizations are beginning to better prioritize data breach prevention, but more needs to be done," said Larry Ponemon, chairman/founder of the Ponemon Institute.

CUNA Mutual to sell its crop-protection business

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MADISON, Wis. (10/1/14)--CUNA Mutual Group announced Tuesday that it has reached an agreement to sell its crop insurance business, Ag Insurance Group (ProAg), to HCC Insurance Holdings Inc.

The transaction is expected to close in the first quarter of 2015, pending regulatory approval.

"This transaction allows our company to put even more focus on our core business lines serving consumers, credit unions, small plan advisors and other core customer groups," said Robert N. Trunzo, CUNA Mutual Group president/CEO. "It also ensures America's farmers can continue to count on ProAg for crop insurance coverage."

CUNA Mutual Group took over operation of ProAg in 2009, a deal which provided the cooperative insurance company with an opportunity to diversify during the fragile months following the economic downturn in 2008.

As its cornerstone business segments have seen strong growth of late, the transaction would allow CUNA Mutual to return its focus to those areas more central to the organization's long-term strategic plans.

The deal is contingent upon Houston-based HCC paying CUNA Mutual $110 million in cash, an amount that would be adjusted at closing.

Since 1926, ProAg has specialized in crop-protection products that help farmers grapple with losses resulting from natural causes such as drought, excessive moisture, hail, wind frost, insects and disease.

CUNA Mutual came on as ProAg's lead reinsurer and direct writer of crop insurance in 2006. In 2007, the insurance company bought a minority ownership in the crop insurance company, and in 2009 became the full owner.

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CUs' card programs make the grade for schools

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MADISON, Wis. (10/1/14)--Credit unions support schools in many ways, such as providing financial literacy programs or in-school branches, but some use their card rewards programs to provide direct monetary benefits.
Redwood CU, a $2.38 billion-asset credit union in Santa Rosa, Calif., announced Monday that it will make a donation to SchoolsRule Marin for each credit or debit card transaction made by the credit union's Marin County members.
SchoolsRule funds literacy, technology and arts programs in the Marin County public school system. "SchoolsRule has a powerful reach in Marin County; every student benefits from the resources it provides," said Redwood CU President/CEO Brett Martinez. "This program is a great opportunity to further our support of education in partnership with our Marin County members--they can spend money all over the world, and these donations still come home."
Martinez estimates that the credit union's contributions will exceed $25,000 by the end of the first year of the partnership. Through the program, members will play a direct role to help programs that have been jeopardized by state budget cuts.
Each quarter in Odessa, Texas, Southwest 66 CU presents donations that have accumulated from the $85 million-asset credit union's affinity card program. Most recently, it donated $600 to Odessa High School ( Permian Basin Sept. 29). Each time a debit card with the Odessa High School Bronchos logo is swiped, the credit union sets aside money to be donated.
As part of its commitment to the community, the credit union offers these special debit cards that in turn support worthy organizations, according to President/CEO Sean Cahill.
The Spirit Cards from Texas Trust CU, Mansfield, Texas, with $846 million in assets, benefit high schools in six school districts. Members' use of the mascot-emblazoned cards--some designed by students--has resulted in more than $611,000 for local schools, according to the credit union's latest tally.
Up to 10 cents per signature-debit transaction can end up benefiting a school through the Extra Credit program at MIDFLORIDA CU, Lakeland, Fla. Elementary, middle and high schools within the $2 billion-asset credit union's service area are eligible, and the school administration must agree to the program. Funds accrue daily and are paid annually in early December.
As the school year kicked off, MIDFLORIDA encouraged members to promote the program by having a credit union representative explain the Extra Credit program at a school-related meeting or sending informational flyers home with students. "The more people who participate in the Extra Credit program, the more your school will earn," it noted.

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White paper from CUNA Tech Council examines DDoS risk

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MADISON, Wis. (10/1/14)--A new white paper from the CUNA Technology Council, "DDoS Security: Risks, Actions, Threats and Solutions," examines the danger posed to credit unions by distributed denial of service attacks.
While all financial institutions face some risk of exposure to DDoS attacks, every credit union and every vendor relationship is unique. That's why it's important for each credit union to not only carefully examine its individual risks but also understand them, according to Jim Stickley, CEO at Stickley on Security.
"At this point, every credit union should assume they will be a target, at some point in time, of a DDoS attack," Stickley said. "The best step is to have a plan in place. You should be working with your network and security providers to ensure they have a defined plan in place and can handle this type of attack.
"In addition, every credit union should be conducting load testing against their online applications--especially applications that don't require log-in credentials to be accessed," Stickly added. "If a criminal can simply command an automated program to submit a form over and over, and that form is load-intensive, this can be a very simple way for a criminal to have numerous machines attack that single form until the site goes down."
Ron Dinwiddie, chief information officer at $850 million-asset Texas Trust CU in Mansfield, Texas, said implementing two other practices would be major steps in the right direction:

"These types of assessments and audits do cost money, but what's the cost--not only in hard dollars but also reputational--should you get attacked and aren't prepared? In many cases, the reputational 'hit' costs more than the hard dollars," Dinwiddie said.
Though credit unions may not be any more vulnerable to DDoS attacks than other companies, they'll be more vulnerable if they aren't prepared, he added. Credit unions should take steps to have a plan and services in place to deal with attacks when they do occur.
To download the white paper, use the resource links.

  • Conducting regular risk assessments; and
  • Hiring (or using qualified internal staff) a highly trained and respectable auditor to conduct an information technology security audit on a regular basis.

Investment provision bill heads to Mass. gov.

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MARLBOROUGH, Mass. (10/1/14)--A Massachusetts Credit Union League-backed bill updating permissible investments for state-chartered credit unions is headed to Gov. Deval Patrick for his signature.
During informal sessions Monday, both chambers of the Massachusetts General Court advanced House 3594, An Act Relative to the List of Legal Investments prepared by the Commissioner of Banks. The action marks the first substantive update to statutory investment provisions for credit unions in decades, according to the league's newsletter, Daily CU Scan (Sept. 30).
"This bill is another step forward in improving the operating environment for credit unions. We look forward to its final enactment," said league President Paul Gentile.
The bill streamlines the petition process for the Commissioner of Banks to add permissible investments available to state-chartered credit unions. The list, released by the Commissioner of Banks July 1 each year, defines investment funds, stocks, bonds, notes and other interest-bearing obligations eligible for investment by credit unions or other financial institutions.
House 3594 also updates criteria to add permissible investments; organizes the criteria into one location within Chapter 171; and adds certain "prudent person" investment authority, in which a credit union has adequate policies and procedures to minimize any credit, market, liquidity, operational, legal and reputational risks.

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LSCU brand campaign reaches 80M consumers

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BIRMINGHAM, Ala., and TALLAHASSEE, Fla. (10/1/14)--The latest edition of the League of Southeastern Credit Unions' Cooperative Image Campaign, which aims to broaden credit union awareness in Florida and Alabama, reached 80 million consumers this year, the league revealed this week.

The 2014 campaign incorporated a traditional TV ad, radio spots and billboards that in most cases could be seen in both Florida and Alabama. With a focus on Gen X consumers, the league also promoted credit unions through YouTube, Pandora and social media websites ( eSignal Daily Sept. 29).

The TV ad was viewed more than 5 million times online through pre-rolls--or short ads that run prior to the start of an online video--and YouTube, according to the league. The campaign ran from May through August.

"One of the league's biggest annual initiatives is the Cooperative Image Campaign," said Patrick La Pine, league president/CEO, who announced the results of the effort in his weekly column Monday ( eSignal Daily ). "Member credit unions have told us it's important to them because it promotes the credit union brand across both states and also complements their marketing efforts. That's the cooperative structure of the campaign."

Credit unions participate in the campaign by voluntarily contributing their "fair share" to the effort.

Each year, the league pays for independent research to track the impact of the campaign, which ultimately directs consumers to the league's website where they can learn the benefits of joining a credit union.

The research showed that two-thirds of respondents considered joining a credit union and 36% are now interesting in becoming a member.

Plus, the click-through rate to the website doubled from the rate seen two years ago. The website drew 183,000 overall visits, which is nearly triple 2012's rate.

The league is also already planning next year's Cooperative Image Campaign. The campaign's task force, made up of credit union marketing professionals from both states, indicated it will use the same TV ad once again but would like to add online-specific marketing to enhance the effort.

"If nothing else, it expands our presence on TV and online to reach more consumers with the ability for credit unions to share through their social media channels," La Pine said.

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CUNA revamps Plan It's retirement calculators

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MADISON, Wis. (10/1/14)--The Credit Union National Association has enhanced the calculator on its retirement microsite Plan It.
Plan It serves as a retirement preparation resource for credit union members of any age who want to ensure a comfortable future.
With increased connectivity among the three retirement calculators and supplementary items added to the Retire Ready checklist and short courses, credit unions can now offer their members additional expert retirement advice. The newly revamped Plan It also includes revised language for comprehension and consistency throughout the three calculators.

"Our goal has always been to help pre-retirees focus attention on and keep track of their retirement funds," said Rena Crispin, Plan It managing editor.
Plan It's updated features allow members to see the benefits of planning for retirement with planning tools, including:
  • Personal Profile: Pre-retirees privately enter information such as age and number of years to retirement to help customize the calculators;
  • Financial Longevity: A dynamic, interactive graph illustrates how changes in contribution percentages to taxable and tax-deferred accounts might affect future financial resources. Pre-retirees can save their work and return to adjust the information and variables as their situations change; and
  • Track My Savings: Based on the information they gather and learn using the Financial Longevity calculator and other Plan It resources, pre-retirees can adjust their goals in the Track My Savings calculator.
"Plan It's calculators provide a clear picture to members who want reliable results," said Susan Tiffany, CUNA director of personal finance information for adults. "Ideally, foreseeing the future in this painless way will encourage them to take steps to make sure their retirement is all they hope it will be."

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5 innovative CUs shine at CUNA Tech Council conference

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MADISON, Wis. (10/1/14)--Five credit unions were honored as winners of the 2014 CUNA Technology Council Excellence in Technology Awards at the council's 19th annual conference in Las Vegas last week.
The CUNA Technology Council award recognizes outstanding approaches to technology challenges that have potential for universal application across the credit union movement. The winners for 2014 include:
  • Consumers CU, Round Lake Beach, Ill. with $614 million in assets, was rewarded for its new branch experience, which uses a new centralized branch service model that provides members with an interactive experience through video chat or phone. A branch concierge directs the member to an available service adviser, back office expert or in-branch specialist--at the same branch or a remote location--who can best help the member. This more effectively utilizes staff in less busy branches and helps serve members in the busier branches more quickly;
  • Mountain America CU, West Jordan, Utah, with $3.8 billion in assets, was recognized for an innovative approach to providing connectivity in its branches. A secure Wi-Fi connection to branches provided backup connectivity, which greatly reduced both connectivity downtime and costs. It also added Wi-Fi access that allowed employees to demonstrate mobile apps in their branches, which helped increase member adoption of mobile services;
  • SACU, San Antonio, with $2.7 billion in assets, was recognized for developing full-service kiosks to improve member service convenience. SACU has not only provided another choice in how members can receive services but has helped to retain and develop its existing member base and acquire new members in both existing and new locations. It also has created positive impressions of products and services with both current and potential members;
  • Service CU, Portsmouth, N.H., with $2.4 billion in assets, was honored for its new approach to data backups and disaster recovery preparedness. It eliminated the need for secondary backup tools and services in use, combined physical and virtual systems with the same backup solution, greatly reduced backup and recovery times, and automated work flows with a user-friendly interface and instant system and data recovery; and
  • Worker's CU, Fitchburg, Mass., with $1 billion in assets, was recognized for its Connections On-Line program, which enhanced collaboration of work by employees on projects as well as tracking and reporting project activities. Charts show goal status by color, providing visual information on how well projects are meeting the goals of each department at the credit union. This status visibility within the credit union has motivated employees to improve the status color on activities.
A panel composed of CUNA Technology Council members selected the honorees based on strategy, process, application and results, without regard to credit union asset size.
For more information, use the resource link and select the Excellence Awards link contained in the Events pull-down menu.

Pelican State CU loads carts, lugs bags for local shoppers

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BATON ROUGE, La. (10/1/14)--Pelican State CU showed its support for both a local business and its community recently when it gave away $4,000 in free groceries to shoppers at a family-owned grocery store.
Click to view larger image Lindsey Richard, vice president of project management, Pelican State CU, carries a shopper's groceries to her car in reusable tote bags provided by the credit union. (Pelican State CU Photo)
Starting at 9 a.m. Sept. 19, the first 200 shoppers to visit Carter's Supermarket in Denham Springs, La., received $20 in free groceries, courtesy of the $234 million-asset, Baton Rouge, La.-based credit union.
Pelican team members saw firsthand how far $20 goes in some households. Shoppers were overwhelmed with gratitude. Some even hugged team members as they left the supermarket.
"This means a lot to me; we need the food," said shopper Wanda Lee. Lee and many others who were in line before 9 a.m. said that waiting was worth it because $20 goes a long way if you're a savvy shopper.
Pelican partnered with Carter's, a locally owned and operated grocery store located a few miles from the credit union's Denham Springs branch.
In addition to the grocery giveaway, the credit union has given away more than $8,000 in money booths at festivals and grand openings, $4,000 in free gas and more than 700 snow cones.

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CU System briefs (10/01/2014)

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  • LIVONIA, Mich. (10/1/14)-- Monday is the deadline for credit unions nationwide to register their activities for the Oct. 14 CU Lunch Local event. Credit unions in 11 states have signed up to support and promote local businesses by making purchases or buying lunch for people at local restaurants, for example. "This is a great way to support credit unions during the week of International Credit Union Day," said organizer Jessica Richardson-Isenegger. Credit unions that want to participate should contact Richardson-Isenegger via email at then promote their activities through social media with the hashtag #CULunchLocal. Launched by the Michigan Credit Union League two years ago, CU Lunch Local aims to put thousands of dollars back into the pockets of Main Street businesses with its nationwide cash-mob program that also promotes the credit union difference ...
  • MERIDEN, Conn. (10/1/14)-- Chris Whalen is the new communication and public relations manager for the Credit Union League of Connecticut , the league announced. Whalen previously worked for $415 million-asset Connex CU, North Haven, where he was the recipient of CO-OP Financial Services' THINK Prize 14. "His commitment and expertise is an asset to the league and Connecticut's credit unions," said league President/CEO Jill Nowacki ...
  • MARLBOROUGH, Mass. (10/1/14)-- Northeast CU, Portsmouth, N.H., honored its former president/CEO Peter Kavalauskas last week by naming its community room in his honor and donating $5,000 to Make-A-Wish New Hampshire ( Daily CU Scan Sept. 26). "In addition to recognizing Peter for his dedication and leadership to Northeast CU, we are reminded of Peter's incredibly huge heart for Make-A Wish New Hampshire," said Timothy J. Collia, the credit union's new president/CEO. "Each year, Peter would spend some time with the children who were granted a wish through the assistance of Northeast CU. They would come in and show Peter pictures of their granted wish and share their stories." Kavalauskas died Feb. 8 as a result of a snowmobiling accident, just days after he announced his retirement from the $918 million-asset credit union ( News Now Feb. 11) ...
  • GRAND RAPIDS, Mich. (10/1/14)-- Members of Grand Rapids (Mich.) Family CU, with $40 million in assets, approved a proposed merger Sept. 24 with Michigan First CU, Lathrup Village, with $695 million in assets. Beginning Jan. 1, the merged credit union will operate under the Michigan First name. "Michigan First stood out to us as the right partner because of its commitment to members and the community, including its industry-leading technology and innovative financial education programs, such as Young and Free Michigan," said Donna VanderVries, Grand Rapids Family CU board chair ( Grand Rapids Press Sept. 29) ...

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