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News Now: April 27, 2015

CUNA to serve as clearinghouse for TNC legislation info

WASHINGTON (4/27/15)--As legislation regarding transportation network companies (TNCs) such as Uber, Lyft and Sidecar is being considered in at least 35 states, CUNA is serving as a clearinghouse for expertise, guidance and information regarding TNCs.

CUNA and state leagues are working to ensure the bills contain requirements that drivers have comprehensive and collision insurance for TNC drivers.

Drivers who work for TNCs generally use personal vehicles to perform their duties, which can result in lapses in coverages that can leave drivers uninsured. In addition, the functions of the job can entail increased risky activities by drivers, including transporting strangers, making more stops and dealing with distractions that come with having additional people in a car.

Credit unions, as institutions that make car loans, can be vulnerable as lienholders on the vehicles.

There are three periods of exposure for TNC drivers: when the app is activated, but not matched to a passenger; when a match is made and the driver is en route to pick up the passenger; and when the passenger is being transported.

CUNA and state credit union leagues support legislatoin that would:
  • Require drivers using personal vehicles with liens on them to provide proof to lienholders and TNCs of comprehensive and collision insurance that provides coverage during all phases;
  • Have coverage of at least $50,000 per person for death/bodily injury, $100,000 per incident for death/bodily injury and $25,000 for property damage when the driver is logged into the TNC network and available, but not engaged in a prearranged ride;
  • Have coverage of $1 million when the driver is engaged in a prearranged ride;
  • Require a TNC's insurance to cover claims if a driver's insurance lapses and does not meet the required coverage; and
  • Require TNCs to disclose to drivers that the driver's personal insurance policy may not provide coverage when the driver is logged into the TNC's network and available to receive requests, or is engaged in a prearranged ride.
Haley DaVee, vice president of governmental affairs at the Kansas Credit Union Association, told News Now that, from the perspective of the credit union industry and the financial services industry, it's very important to get states to pass legislatoin with the above provisions "to show that there is a need for it, to protect consumers who are driving vehicles that are not properly insured,"

Uber and the insurance industry collaborated on a model bill for states recently, but their model does not contain a requirement for comprehensive and collision insurance.

Recently a TNC bill was enacted in Utah with the assistance of the Utah Credit Union Association, which contains all the items CUNA and the leagues are searching for. In Kansas, the league says a satisfactory bill was vetoed by the governor.

States such as Arkansas, Arizona, Idaho, Kentucky, North Dakota and Virginia have recently enacted TNC legislation that does not require comprehensive and collision coverage.

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Nussle highlights CU data breach costs, reg. relief on Bloomberg radio

WASHINGTON (4/27/15)--CUNA President/CEO Jim Nussle took to the airwaves Friday to highlight the massive costs facing credit unions due to the increasing number of merchant data breaches.  Nussle also explained the consumer benefits of regulatory relief measures for credit unions and how easing regulatory burden would help credit unions serve their members even better.

Nussle was interviewed by Vonnie Quinn on "Bloomberg Advantage."
The CUNA leader explained to Quinn and her national audience that merchants are the weak link when it comes to data security.
He highlighted CUNA's efforts, both in Congress and in the courts, to push for stronger merchant standards that protect consumers as well as credit unions and other financial institutions.
"We're saying that somebody has got to put the merchants into a more responsible position, they should be responsible for the data if people are coming and using their credit cards, that needs to be protected," he said. "The same way every credit union and bank must protect the information of its customers, merchants need to do the same."
Nussle added that few breaches occur at credit unions and other financial institutions because of the standards laid out in the Gramm-Leach-Bliley Act, but merchants have no such standards.
"This is a situation where the bad guys are getting to the data through merchants, they're not getting into the data through credit unions and banks," he said. "The only way for us to protect it is to make sure merchants have the same standards we have."
Quinn asked about the general outlook for credit unions, and while Nussle said demand for loans is going up, easing of regulatory burdens is essential for credit unions to meet that demand.
"We'd obviously like to see a reduction in the regulatory burden that just adds costs and paperwork and sometimes doesn't allow us to make a student loan or do a mortgage because of the costs," Nussle said. "But we're working with other small financial institutions to work with Congress to try and lessen some of those regulatory issues so we can get more capital out into the marketplace to create jobs."

More than 1,650 RBC2 comments filed by Friday: Deadline is today

ALEXANDRIA, Va. (4/27/15)--As of late Friday afternoon, credit unions, state credit union leagues, CUNA and other stakeholders had sent 1,654 comment letters on the National Credit Union Administration revised risk-based capital proposal (RBC2). The comment period ends at 11:59 p.m. (ET) today.

CUNA continues to believe the proposal is a solution in search of a problem, but should the NCUA proceed with the rule, CUNA believes a number of changes are necessary.
This includes:
  • Dropping the new proposed capital adequacy provisions, which are beyond net worth and risk-based capital ratio requirements;
  • Reduction of a number of the risk weights;
  • Identifying "complex" credit unions on more than asset size, and the definition should only apply to credit unions of at least $500 million in assets;
  • Expansion of the conditions under which goodwill could be included in the risk-based capital ratio;
  • Minimizing the burden of expanding the call report for purposes of RBC2; and
  • Allowing credit unions to use supplemental capital in meeting risk-based capital requirements;
  • Delaying implementation of RBC2 until 2021, to coincide with expected refunds from the Corporate Stabilization Fund.

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Class is in session for Fin. Lit. Day on Capitol Hill

CU System
WASHINGTON (4/27/15)--National Financial Literacy Month was in full swing at the nation's capital Friday, as the Capitol morphed into a giant classroom for Financial Literacy Day on Capitol Hill, organized by the Jump$tart Coalition, Junior Achievement USA and the Council for Economic Education.

CUNA and National Credit Union Foundation representatives took part in the day's activities, which included a showcase of BizKid$ by the foundation, and presentations by CUNA's and on the work credit unions do in financial literacy.

Hover over each photo in the slideshow to read the associated captions.

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DDoS attacks shorter, intense, more expensive: VeriSign

CU System
WASHINGTON (4/27/15)--Distributed denial of service (DDoS) attacks can, at best, be an annoyance for a business or organization trying to run a website. At worst, they can expose weaknesses that cybercriminals can exploit.

DDoS attacks began as a method for cyber thugs to halt website activity or inflict damage by flinging heavy volumes of traffic at an organization's website, but a new report from VeriSign shows that these attacks are becoming even more difficult to handle, and subsequently more costly.

In the fourth quarter last year, the size of the attacks--measured by gigabits per second--rose by 14% on an annual basis.

Further, VeriSign found that the number of attacks jumped by 17%, with 15% of the attacks targeted at financial institutions.

"The increasing availability of DDoS-for-hire services--also known as 'booters'--presents a huge risk for security professionals, as they enable virtually anyone to hire skilled cybercriminals to launch a targeted DDoS attack for as little as $2 per hour," VeriSign said in the report.

Rik Turner, senior analyst at the research and consulting firm Ovum, told American Banker recently that DDoS attacks also have become more sophisticated.

"We're seeing lots of small attacks with intervals that allow the attackers to determine how efficiently the victims' mitigation infrastructure is, and how quickly it is kicking in," Turner said.

These attacks also can cripple network availability and productivity, and cost organizations greatly in both online revenue and in reputation and customer trust, according to VeriSign's report.

Given what's at stake, VeriSign says that awareness of the capabilities of these criminals is one key to combating the DDoS threat.

Purposeful culture fosters 'best' companies: CUNA HR/TD Council

CU System
HOLLYWOOD, Calif. (4/27/15)--Creating a "best" organization requires a culture of purpose with heart and soul, said Jackie Freiberg at the opening keynote address of the CUNA HR/TD Council Conference in Hollywood, Calif., last week.

Author Jackie Freiberg defines "best" organizations at the CUNA HR/TD Council Conference in Hollywood, Calif., last week. (CUNA Photo)
Freiberg, co-author of "GUTS" and "Do Something Now," said, "Culture is a strategic force, a gift you give your people, so your credit union can rise from 'sameness' and become different," she said. "Best" cultures--ones where the best people do their best work for their credit unions and their members--have heart and soul. 

Culture is the "will of the people and the will of your CEO," Freiberg said. Senior leadership has to be committed and involved in a credit union's culture--and credit union employees have to own it, every day. 

She encouraged attendees to ask questions about mindlessly accepting the status quo and if that environment negatively affects the culture.

"Leadership is everyone's job," Freiberg added. "It's not a title, it isn't a position. It's a choice. We're all POIs--People Of Impact."

See Credit Union Magazine for more coverage of the CUNA HR/TD Council Conference.

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CUNA Councils unveils new website, resources

CU System
MADISON, Wis.  (4/27/15)--CUNA Councils today launched its enhanced and upgraded website with more user-friendly features, streamlined content and a more accessible format.
"Our main focus was to seamlessly connect all six councils on one site while still maintaining their separate identities and objectives," said David Rohn, CUNA Councils vice president. "The new website was created with the membership user in mind, and we worked with member feedback to learn what was most important to them and how we could make the site more convenient and user-friendly."
The new website offers users an environment to interact with other council members and a streamlined method to find the resources they need to be successful in their credit union roles. To help users adjust to the site's new functionality, CUNA Councils will offer site tours to current members.
In addition to its updated design and integrated structure, the new website features:
  • Upgraded navigation tools;
  • Intuitive search function with filtering ability;
  • Enhanced file library which allows for cross-council document sharing;
  • Ability to search within all councils white papers; and
  • Single sign-on with user's login.
To access specific councils using the new site, CUNA Council members are required to login to their account. Their account will be the same as their account.
Users who do not know their username and password, have questions or would like a tutorial of the site should contact Jenny Jackson , 608-231-4102. Registration is available for online training sessions.

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