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Experts: Expect more breaches during holiday season

CU System
NEW YORK (11/21/14)--It's probably the last thing credit unions--which have been saddled with millions of dollars in costs as a result of recent mega-retailer data breaches--want to hear, but many experts are forecasting a new round of cyberattacks on payment data held by merchants this holiday season. 

"It's just a matter of when they're going to get hacked, not if," Robert Twitchell, president/CEO of the cybersecurity firm Dispersive Technologies, which serves as a consultant to the U.S. Department of Defense in its war against cybercrime, told the International Business Times (Nov. 18).

"It would be a surprise if it doesn't happen again," added John Rose, Boston Consulting Group's global leader. "The cyberattack community is equally aware of the importance of the holiday season, and they've been working on things for a while, so you're going to see an intensity of effort."

Unwelcome news compounded by the fact that merchants continue to operate under payment data security standards that don't match the strict standards financial institutions are required to meet.

Twitchell said that merchants may spend more on safeguarding payment data than in the past, but it still may not be enough to ward off cybercriminals.

"IT organizations have paid attention only to the ABCs of hacking," Twitchell said. "They're adhering to PCI compliance, a government standard of basic security, but the standard hasn't kept up with innovation."
And Twitchell isn't the only one worried about payment security at merchant stores.

Brian Krebs from KrebsOnSecurity.com, a cybercrime blog, said that he expects a new major breach will surface in only the next few weeks.

"The retail industry is just the lowest of the low-hanging fruit when it comes to cybersecurity," he said on "CBS This Morning."

Retailer security performance continues to decline as well, according to the security benchmarking firm BitSight (TechWorld.com Nov. 18), especially for those who have yet to come under attack.  

While a number of retailers that have been hit with breaches have seen improvements in security performance, BitSight found that 58% of the 300 merchants it polled recently had experienced a 90-point decline in performance over the first three quarters of 2014 on a scale that runs from 250 points to 900.

The Credit Union National Association has been on the forefront of the effort to press lawmakers on the issue of unequal payment data security requirements between financial institutions and merchants.

Credit unions nationwide suffered $57 million in costs related to the recent Home Depot data breach, including card reissuances and other fraud-related costs, after getting hit with $30 million in costs from the breach that occurred at Target stores last holiday season.

Meanwhile, the stakes for those that hold sensitive consumer payment data continue to rise. So far this year, 644 breaches have been reported, a 25.3% increase from last year, according to Theft Resource Center (Pymnts.com Nov. 19).

Further, Federal agencies have warned businesses in the United States that hackers are becoming more sophisticated and organized, and even the Chinese government has been sponsoring cyberattacks in search of patented technologies, according to the International Business Times.

The attacks will also continue to evolve, it appears, as Trend Micro predicts that data breaches will migrate to mobile devices carrying personal payment data next year, according to Pymnts.com.

"In 2015, we expect attackers to hack smart device-markers' databases to steal information," Trend Micro reported.

The company also said that a more diverse range of targets will come under fire from cybercriminals, but that personal financial information will continue to be the most hunted data.

It's all about the bird for CU charity at Thanksgiving

CU System
MADISON, Wis. (11/2114)--As the daily temperature drops in most parts of the country, credit unions nationwide have already begun warming hearts with holiday charitable events and celebrations.
 
Click to view larger imageEmployees at $410 million-asset Dover (Del.) FCU collected nonperishable items at all of its branches. (Dover FCU Photo)
Dover (Del.) FCU is participating in the annual Turkey Round Up, a program that helps the Food Bank of Delaware collect and distribute turkeys and nonperishable food to families in need during the holiday season. Dover FCU awarded each of its employees a $20 turkey gift voucher. Employees were given the option to donate their vouchers to the Turkey Round Up program so that turkeys could be purchased for hungry state residents.
 
The $410 million-asset credit union also collected nonperishable items and monetary donations at all of its branch locations. The combined efforts of employees and Dover FCU members raised $1,585.83 and filled six large bins with food for the holidays.
 
Click to view larger imageParticipants in last year's Pacific Marine CU Turkey Trot in Oceanside, Calif., celebrated the event's Thanksgiving Day theme. (Pacific Marine CU Photo)
Pacific Marine CU, Oceanside, Calif., with $707 million in assets, is sponsoring the ninth annual Oceanside Turkey Trot on Thanksgiving Day. The PMCU Oceanside Turkey Trot has raised more than $160,000 for local charities in the last eight years (U-T San Diego Nov. 16).
 
Participants can designate their entry fees toward local schools and nonprofits. The event also supports the Move Your Feet Before You Eat Foundation, a charity that promotes health and physical activity among young people.
 
On Tuesday, Bethpage (N.Y.) FCU, with $5.6 billion in assets, sponsored the sixth annual Bethpage Turkey Drive to benefit Island Harvest food bank.
 
Click to view larger imageLocal firefighters are among those who assisted in the sixth annual Bethpage Turkey Drive, sponsored by Bethpage (N.Y.) FCU. (Bethpage FCU Photo)
Long Islanders donated frozen turkeys, nonperishable food items and cash donations. One generous giver donated 80 turkeys (Newsday Nov. 20). The donations helped supply Thanksgiving holiday meals to the more than 300,000 hungry Long Islanders.
 
Credit Union 1, Rantoul, Ill., with $768 million in assets, is hosting a food drive this month. Members and employees are welcome to donate money or nonperishable food items. Food donations will go to a local food pantry that each branch has selected in the communities served by the credit union. Monetary donations will go to Feeding America.
 
In addition to hunger relief, credit unions focused on other "people helping people" efforts:
  • Members and staff of Ideal CU, Woodbury, Minn., with $567 million in assets, once again helped to fill collection barrels to ensure kids in the Twin Cities metro area receive new or gently used coats this winter;
     
  • A total of 224 coats and 123 winter accessories were collected at Ideal CU branch locations throughout the year, culminating with the October Salvation Army Coats for Kids Drive. In addition, the Ideal Community Foundation donated $2,500 from Casual for a Cause and other contributions, which the Salvation Army will use to buy 156 more coats for needy children;
     
  • On Dec. 6, Evolve FCU, El Paso, Texas, with $300 million in assets, will present the 2014 Celebration of Lights, El Paso's traditional holiday lighting ceremony. Since it first began in 1935, the Celebration of Lights has been one of the most celebrated traditions in the Sun City;
     
  • Mid Oregon CU, Bend, Ore., with $185 million in assets, is supporting local charities through the Holiday Dough Fund. Cash donations will help provide food, clothing and shelter for individuals and families within the local community as well as toys for kids; and
     
  • Georgia United CU, Duluth, Ga., with $981 million in assets, is holding its 25th annual Wish Tree program to collect new toys and clothing for deserving children through local charitable organizations or the state Division of Family and Children Services.
 

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Credit scores, card use on rise: Experian annual credit study

CU System
COSTA MESA, Calif. (11/21/14)--2014 has been a year for borrowing and for boosting credit scores, according to Experian's recently released State of Credit report.
 
Click to view larger imageExperian Graphic
The credit bureau's fifth annual report shows card lending and credit scores experiencing signs of growth since last year.
 
New bank-card accounts are up 21.1%, with one in 17 consumers opening at least one new account in 2014 compared with one in 21 in 2013.
 
"This has been a notable year for borrowing, with more new credit being extended and consumers feeling more comfortable and confident about accepting those credit offers," said Michele Raneri, Experian vice president of analytics. "Even with some categories like mortgages taking longer to bounce back, an early glimpse at our third-quarter data indicates that an upward trend may be on the horizon."
 
Experian reported a 39% decline in mortgage originations year-over-year with one in 79 households taking out a new mortgage compared with one in 48 in 2013. The bureau's projections indicate originations will increase 6.8% in the third quarter from the second quarter.
 
The national average VantageScore ticked up two points to 666 from 664. Of the more than 100 metropolitan statistical areas Experian surveyed, Minnesota had four of the top 10 highest average credit scores with 699 or above.

League-supported fin. lit. bill among 1st filed for Fla. session

CU System
TALLAHASSEE, Fla. (11/21/14)--With support from the League of Southeastern Credit Unions, a bill requiring high school students to take a financial literacy course has once again been filed in the Florida Senate.
 
The legislation, which was filed by Sen. Dorothy Hukill (R-Port Orange), would reduce elective credits to seven-and-one-half from eight, beginning with students entering the ninth grade in the 2015-2016 school year. Instead, each student will be required to take one-half credit in personal financial literacy and money management.
 


"The league worked closely with the bill's sponsors on this legislation," Patrick La Pine, LSCU president/CEO, told News Now. "Credit unions have a long history of providing financial literacy to local schools. This legislation helps to take that a step further by making it a requirement. When the legislation passes, credit unions have an opportunity to help bridge the financial literacy gap for students."
 
Instruction and discussion will focus on types of accounts, how to balance a checkbook, loan applications, insurance policies, taxes and investments.
 
The LSCU said its governmental affairs team will continue to work closely with the bill sponsors and a coalition of advocacy partners for the legislation. The league will be guided by recommendations from a financial literacy task force made up of credit union representatives from across Florida.
 
The goals for the league-appointed task force are legislative advocacy, grassroots efforts and serving as resource for teachers and students. The task force will work to pass the legislation and serve as a resource during the implementation process. 
 
By assisting in financial literacy efforts, credit unions can provide real-life examples of financial challenges that consumers face each day, said Heather Fitzenhagen (R-Fort Myers), one of the bill's co-sponsors.
 
Also, Hukill filed SR 106, a resolution recognizing April 2015 as Financial Literacy Month in Florida. LSCU is cited in the resolution for its efforts to teach financial literacy to as many people as possible through programs such as the National Endowment for Financial Education's High School Financial Planning Program, Biz Kid$, Money Mission, reality fairs, seminars and workshops.

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MCUA orientation welcomes newly elected state lawmakers

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JEFFERSON CITY, Mo. (11/21/14)--The Missouri Credit Union Association (MCUA) has created an opportunity for state credit union leaders to meet freshly elected legislators face-to-face before they officially take office next year.

The Missouri league's freshman orientation lunch with state legislators will take place Dec. 3 in Jefferson City. Roughly 35 state lawmakers--those who won election in 2014, staff members and sophomore legislators beginning their second terms in January--will attend the event.

"This is an excellent way to meet with newly elected lawmakers and establish or build on relationships before the session begins," said Amy McLard, league senior vice president of advocacy (Missouri Difference Nov. 18). "We hope that credit union representatives statewide will take part, especially those that have new lawmakers representing their region."

The Credit Union National Association has developed materials to guide leagues for meetings with new members of the 114th Congress as well.

Materials include an outline that details talking points such as a general introduction to credit unions, efforts to preserve credit union tax status, reducing regulatory burdens imposed upon credit unions and information on merchant data breaches.

For more information about the Missouri league's event, or to RSVP, contact Director of State Legislative Affairs David Kent at dkent@mcua.org. RSVPs must be received by Dec. 1.

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New Filene tool helps CUs optimize member experience

CU System
MADISON, Wis. (11/21/14)--A new white paper from the Filene Research Institute describes how credit unions can optimize their delivery channels to enhance member satisfaction.
 
The paper also introduces a software tool to assist with that process.
 
This research outlines examples of organizations--both inside and outside of retail financial services delivery--that have been successful at optimizing the customer experience.
 
The report outlines how to leverage Filene's member experience design tool (http://custexp.filene.org/) through five steps:
 
  • Step 1: Identify specific delivery channels and attributes valued by your target members;
  • Step 2: Order attributes from most to least important from the perspective of the credit union's target members;
  • Step 3: Provide an honest assessment of the credit union's most important competitor's performance on those same attributes;
  • Step 4: Choose an institution to run a comparative analysis against based on the attributes selected by the credit union as most and least important; and
  • Step 5: The tool will generate a descriptive analysis on the advantage, if any, between the credit union and the chosen competitor.
Once credit unions have defined and ranked the most important attributes of the member experience, they can map out their capacity to deliver on those attributes. Ultimately, this practice will help identify systematic opportunities to optimize the member experience across various channels, the paper said.

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Available spots dwindling quickly for Jan. DE training

CU System
MADISON, Wis. (11/21/14)--Only a handful of spots remain for next year's Credit Union Development Education training program that will take place Jan. 14-21 in Dallas.

The spring class, set for April 29-May 6 in Madison, Wis., is also about half full, according to the National Credit Union Foundation (NCUF), which sponsors the trainings.  

"Registration for each training is limited to just 42 attendees and we only have about 10 spots left for credit union professionals who would like to attend the January training," said Lois Kitsch, NCUF national program director. "You don't want to miss either of the 2015 programs, as DE Training is one of the most transformative and unique credit unions training events offered."

The training lasts six days and teaches credit union professionals about social responsibility and domestic and international development through interactive education and professional networking.

Registration for the trainings can be accessed on the NCUF's website under the "Register for DE Training" button on the homepage.

The registration fee includes seven nights of single-room lodging in addition to all training materials and meals.

The program is open to anyone from new credit union employees to veteran credit union executives looking for a refresh in the industry. Those interested in learning more about the training can view a video the NCUF has put together a video on the program (News Now Nov. 5).

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3 nominations received for CUNA board election

CU System
MADISON, Wis. (11/21/14)--The Credit Union National Association has so far received three nominations for open director positions on the trade association's board.
 
Two nominations have been submitted for District 5, Class A.  This seat represents credit unions having less than 28,000 natural-person members in Arizona, Colorado, Kansas, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming.
 
Nominees are Winona Nava, president/CEO, Guadalupe CU, Santa Fe, N.M., with $135 million in assets; and Donna Neal, president/CEO, My Community FCU, Midland, Texas, with $299 million in assets.
 
Peter Dzuris, president/CEO, Northland Area FCU, Oscoda, Mich., with $279 million in assets, has been nominated for District 4, Class B, which represents credit unions having at least 28,000 but not more than 100,999 natural-person members in Illinois, Iowa, Michigan, Minnesota, Missouri and Wisconsin.
 
The deadline for nominations is Dec. 15, and official ballots will be sent Dec. 29.
 
Other open seats are:
 
District 1--Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Puerto Rico and Virgin Islands:
  • Class B: Credit unions having at least 28,000 but not more than 100,999 natural-person members.
District 2--Delaware, District of Columbia, Indiana, Kentucky, Maryland, Ohio, Virginia and West Virginia:
  • Class C: Credit unions having at least 101,000 natural-person members.
District 3--Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee:
  • Class A: Credit unions having less than 28,000 natural-person members; and
  • Class D: League presidents.
District 4--Illinois, Iowa, Michigan, Minnesota, Missouri and Wisconsin:
  • Class D: League presidents.
District 6--Alaska, California, Hawaii, Idaho, Nevada, Oregon, Washington, American Samoa, Guam, Johnston Atoll, Midway Atoll, Northern Mariana Islands, Palmyra Atoll and Wake Atoll:
  • Class C: Credit unions having at least 101,000 natural-person members.

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