ALEXANDRIA, Va. (3/7/14)--A video recording of the National Credit Union Administration's February open board meeting is now available on the agency's website.
There was a short agenda for the Feb. 21 meeting, just two items: a proposed rule on voluntary liquidations of federal credit unions, and the quarterly report on the National Credit Union Share Insurance Fund.
The NCUA posts its meeting video in an effort to provide transparency and to give those unable to attend board meetings the opportunity to witness the agency's actions. The videos comply with Section 508 of the Rehabilitation Act for the hearing and visually impaired.
Use the resource link to view this and other archived videos of past board meetings. Each video remains on the site for one year.
WASHINGTON and BOSTON (3/7/14)--A National Consumer Law Center (NCLC) study released Thursday warns that while big data promises it can make better products available to the unbanked and underbanked through predictive systems, the information based on those algorithms can be riddled with inaccuracies.
Big data brokers claim to be able to help some of the approximately 64 million consumers in the U.S. who have no credit history or lack sufficient credit history to generate a credit score--a state that in the modern world can cut off access to traditional banking services--by providing informed predictions of their histories.
The NCLC said it got 15 of its employees to request information about themselves from some of the largest data brokers in the country. The report's executive summary said that errors in the information ranged "from the mundane--a wrong e-mail address or incorrect phone number--to seriously flawed."
It went on to say that seven of 15 reports of a data broker that touts an ability to estimate income and education based on its advanced models contained errors in estimated income, nearly doubling the salary of one participant and cutting that of another in half, and 11 of the 15 reports incorrectly stated the volunteer's education level.
"Big data makes big promises. It promises to make better predictive algorithms that in turn can make better products available to the unbanked and underbanked. But can big data live up to this big promise?" the NCLC summary asks.
It suggests that when analyzing this use of big data, consumers and policy makers should be concerned with these questions:
- Are the decisions based upon accurate data?
- Can the algorithms, when fed with good data, actually predict the creditworthiness of low-income consumers?
- Does the use of big data in reports used for credit, employment, insurance, and other purposes comply with consumer protection laws?
- Is there the potential for a discriminatory impact on racial, geographic, or other minority groups?
- Does the use of big data actually improve the choices for consumers?
Ken Worthey, the NCUA's financial literacy and outreach analyst, talks to congressional staffers Thursday during a Capitol Hill event to mark National Consumer Protection Week. (NCUA photo)
The National Credit Union Administration Thursday joined in on a Capitol Hill celebration of National Consumer Protection Week by educating congressional staffers about credit unions and the role of their federal regulator.
March 2-8 is National Consumer Protection Week. It is intended to encourage Americans to be better informed in their consumer decisions. In his proclamation of the week, President Obama wrote, "This week, we remember that our nation's economy is only as strong as its people, and we recommit to fostering a sense of basic fairness in our marketplace." He called on government officials and private industry leaders to help educate Americans on their rights as consumers.
Ken Worthey, the NCUA's financial literacy and outreach analyst, participated in the day's Capitol Hill event.
The NCUA has used the declaration of the week to highlight the many resources it provides consumers--especially on its two consumer-oriented websites, MyCreditUnion.gov and Pocket Cents. These sites include tips to help consumers avoid financial scams and protect their financial well-being.
On its own site, the NCPW this week reminded users that a checking account at a credit union or other financial institution can serve as a less costly alternative to using check cashers or prepaid cards. The site also featured information on top consumer complaints, and highlighted state efforts to get vital money-saving information to consumers.
Use the resource link to visit the Credit Union National Association's consumer website, aSmarterChoice.org.
WASHINGTON (3/7/14)--With the weight of their combined 14,000 financial institution memberships behind them, the Credit Union National Association, Independent Community Bankers of America and the American Bankers Association sent a joint letter of support for a new bill to fight patent system abuses.
The bill (S. 2049) was introduced by Sen. Claire McCaskill (D-Mo.) late last month and is titled the "Transparency in Assertion of Patents Act." It would curb unfair and deceptive practices during assertions of patents against legitimate businesses, including credit unions and banks.
The legislation takes an important step toward addressing the "exponentially growing threat of Patent Assertion Entities (PAEs), commonly referred to as 'patent trolls,'" the joint letter states.
If enacted, it would help to address the burden credit unions and banks face when trying to decipher vague and misleading demand letters. And, the letter asserts, it would do so by taking specific aim at the problem, without affecting the rights of legitimate patent holders to send demand letters or otherwise assert their patent rights.
S. 2049 would clarify the Federal Trade Commission's (FTC) authority to require basic information, such as the owner of the patent and specific technology involved, to be included in letters sent by PAEs.
"This will help the victims of trolls to quickly and inexpensively understand the infringement claim and how best to respond to it," the letter said.
The CUNA joint letter also noted that legitimate patent holders would benefit from McCaskill's bill because it would empower the FTC to specify what constitutes a deceptive demand letter.
"This would provide patent holders with certainty of how to assert a patent without any risk that it could be labeled unfair or deceptive. Civil penalties would be imposed on those that continue to send out 'bad faith' demand letters, with exceptions provided for communications between parties on existing licensing agreements."
Once introduced, S. 2049 was referred to the Senate Commerce, Science, and Transportation Committee.
The chairman of that committee, Sen. John Rockefeller (D-W. Va.), is a co-sponsor of the bill. The CUNA joint letter was sent to the chairman and the ranking member of the committee, Sen. John Thune (R-S.D.).
CUNA and the banking trades told the committee leaders that they look forward to working with members of the committee to find a "bipartisan solution that directly addresses the growing abuse of our patent system and the specious demand letters that are having a negative impact on our industry, our customers, and the American economy."
NEW YORK (3/7/14)--As the Credit Union National Association works for merchant accountability for breaches to their data systems, the results of a new study show a startlingly high 67% of business owners polled are not concerned about credit card security at their businesses.
Newtek Business Services, with a portfolio of more than 100,000 business accounts, announced the findings of its latest Small Business Authority Market Sentiment Survey, a monthly snapshot of the concerns of independent business owners.
"Based on a poll of over 1,400 respondents, one of the key findings from the February survey is that even after the recent hackings at major companies such as Target and Neiman Marcus, 67% of business owners are not concerned about credit card security at their business," Newtek said in a release. Newtek is a CUNA Strategic Services alliance provider.
What's more, Newtek reported, 63% of business owners are unaware of Europay-MasterCard-Visa (EMV) chip card technology. EMV is a global standard for credit and debit payment cards based on chip card technology.
The Credit Union National Association supports the adoption of EMV technology--which goes beyond magnetic stripes and contain an embedded chip for stronger security. However, CUNA strongly emphasizes that no one technology can address the burgeoning problem of merchant data breaches.
As the credit union trade association has underscored in a series of letters to federal lawmakers, inconsistent data security standards need to be addressed before a solution to merchant data breaches can be achieved.
"(A) prime reason that merchant data breaches are a chronic issue is because data security standards are inconsistent among the participants in the payments system," CUNA has pointed out, adding, "Simply put: credit unions and other financial institutions are subject to high data protection standards under the Gramm-Leach-Bliley Act; merchants are not. When merchant data breaches occur, financial institutions--not merchants--bear the costs of replacing credit and debit cards and fraud costs."
In another EMV development, CO-OP Financial Services welcomed a recent agreement for debit EMV security standards between Visa Inc. and First Data STAR Network, a major electronic funds transfer system. (News Now March 6)
The credit union-owned ATM network operator said Feb. 26 that a number of its clients are in the STAR Network, and that it is also seeking to implement similar protective technologies like the one Visa and First Data hope to spread through their agreement.
WASHINGTON (3/6/14)--Credit unions once again shone by a comparison of their service to consumers, this time in a
magazine article that discussed the virtues and challenges of the Obama administration's new MyRA retirement account and how it compares with traditional Roth IRAs.
Credit Union National Association Chief Economist Bill Hampel was extensively quoted in the broad article, describing the lower-cost retirement account services available at credit unions.
article listed key selling points of the MyRA, especially for Millennials and others just starting to save: There's no annual account maintenance fee; an account can be opened with as little as $25; additional contributions can be as small as $5 every payday; and, if an employer agrees, savings can be deducted automatically from a saver's paycheck, as they are with 401(k) contributions.
One big drawback however,
says, is that the MyRA will not be available until much later this year. As everyone knows, the article says, this very minute is the best time to start retirement savings.
That brings the choice back to Roth IRAs, which are not terribly different from the proposed MyRA. However,
warns, the fees and minimums can be significantly higher and, to make it all that much more difficult, it is hard to compare offerings.
That's where credit unions come in, says CUNA's Hampel.
"(M)ost credit unions will allow you to open a Roth IRA with that same $25 minimum MyRA will have," Hampel points out, adding, "The MyRA is, in essence, a formalized version of what most credit unions already offer."
"Moreover," he says, "if you schedule an automatic transfer from your checking account, or if your HR department allows you to set up an automatic transfer from your paycheck before it hits your checking account, you can have amounts as small as $25 or even $5 per pay period regularly transferred into that credit union Roth--again, much like the MyRA."
While it's true that the yield on Roth IRAs can be low, Hampel argues that beginner savers shouldn't get hung up on the small number in the "rate of return" category. "There is a time to be concerned about rates, but it's not when you have a really small balance,'' he says.
WASHINGTON (3/6/14)--At a ceremonial swearing in that took place Wednesday, new Federal Reserve Board Chairman Janet Yellin reiterated her promise to do her very best to work with her Fed colleagues and help restore the health of the economy and promote a strong and stable financial system.
"I am repeating this promise, in this distinguished company and to all others listening because that is what this ceremony is about," she said to the gathering in the Federal Reserve Building on 20th Street and Constitution Avenue NW. "The oath I have affirmed, identical to the one taken by everyone serving the Federal Reserve, is a public promise to carry out my duties guided by no interest other than the public's interest," she said in her written remarks.
Yellen said she will continue the work of repairing damage done by the financial crisis to the economy. "Too many Americans still can't find a job or are forced to work part-time. The goals set by Congress for the Federal Reserve are clear: maximum employment and stable prices.
"It is equally clear that the economy continues to operate considerably short of these objectives. I promise to do all that I can, working with my fellow policymakers, to achieve the very important goals Congress has assigned to the Federal Reserve," she said.
Those in attendance included members of the U.S. Congress, U.S. Treasury Secretary Jack Lew, and others from the Obama administration including fellow financial regulators.