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Senators call for faster breach notification from merchants

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WASHINGTON (2/5/14)--"American consumers deserve to know when their private information has been compromised and what a business is doing in response to a cyberattack," Sen. Patrick Leahy (D-Vt.) said during a Tuesday Senate Judiciary Committee hearing.

The hearing follows recent data breaches at Target and Neiman Marcus. Target CFO John Mulligan and Neiman Marcus Group Chief Information Officer Michael Kingston were among those that testified during the hearing, "Privacy in the Digital Age: Preventing Data Breaches and Combating Cybercrime."

After an attack, "time is of the essence for law enforcement seeking to catch the perpetrator, and also for consumers who want to protect themselves against further exposure," Leahy added.

Leahy, who chairs the committee, early this year introduced the Personal Data Privacy and Security Act, which would establish consumer data security standards for companies, and require them to notify consumers when a data breach has occurred.

Merchants and financial services industry will need to move together collectively as data security issues are addressed and the payment system is upgraded, Mulligan told legislators. He said his firm is working closely with federal investigators to catch data breach perpetrators.

While Mulligan advocated for the adoption of chip and PIN technology by card providers and merchants alike, another witness, Symantec Corporation Senior Vice President of Security Product and Services Fran Rosch, said chip and PIN is not a panacea but is a step in the right direction.

Sen. Diane Feinstein (D-Calif.) noted that she introduced a data breach notification bill as early as 2003, but said the bill did not make progress. Companies strongly fought the bill, she said. Any data security bill that moves forward in the U.S. Congress must contain data breach notification provisions for customers, Feinstein said.

The Credit Union National Association has called on legislators to ensure that consumers know where their information was breached. CUNA has also urged legislators to follow two other basic principles as they consider data security fixes:
  • All participants in the payments system should be responsible and be held to comparable levels of data security requirements; and
  • Those responsible for the data breach should be responsible for the costs of helping consumers.
These points were raised in letters sent for the record of data security hearings held this week.

For more of CUNA's data security comments to legislators, use the resource link.

CUNA unveils new Hill visit materials to prep GAC attendees

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WASHINGTON (2/5/14)--The 2014 Credit Union National Association Governmental Affairs Conference is just three weeks away, and CUNA legislative staff have assembled a wealth of new materials to make sure credit union supporters are prepped for their Capitol Hill visits.

One new offering for this year's conference attendees is a half-hour legislative briefing webcast that provides a walk-through of the major issues CUNA will ask participants to discuss in their meetings on Capitol Hill.

CUNA has also prepared digital versions of briefing materials that will be handed out at the GAC. Available briefing materials include:
  • A Legislative Briefing Document that compiles one-page documents on key issues like preserving the credit union tax status, merchant data breaches, reducing regulatory burden, housing finance reform and charter enhancements such as capital reform and member business lending. These documents are designed to be leave-behinds in Congressional offices;
  • Ninety-second talking point documents that cover the major message points on each of the above issues;
  • A step-by-step guide on how to bring up these issues during meetings with members of Congress;
  • A list of 2014 credit union legislative priorities;
  • A high level overview of the credit union system that can be left behind in congressional offices; and
  • A list of reminders about how to conduct and what to expect during Congressional office visits.
CUNA also maintains dedicated web pages with information on each legislative priority, including letters or testimony CUNA has submitted on the topics, relevant articles and other material.

To access these resources, use the CUNA congressional visit material page.

HUD secretary promotes $5B housing trust fund plan

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WASHINGTON (2/5/14)--U.S. Housing and Urban Development Secretary Shaun Donovan called for $5 billion to be dedicated to affordable housing production per year, and discussed other housing finance reform goals, in remarks made before the National Association of Hispanic Real Estate Professionals 2014 Housing Policy and Hispanic Lending Conference.

Donovan said Tuesday that the $5 billion in funds should be earmarked for HUD's Housing Trust Fund and the Capital Magnet Fund.

The Housing Trust Fund complements existing federal, state and local efforts to increase and preserve the supply of decent, safe, and sanitary affordable housing for extremely low- and very low-income households, including homeless families, according to HUD. The Capital Magnet Fund is used by the U.S. Treasury's Community Development Financial Institutions Fund to provide grants to CDFIs and qualified nonprofit housing organizations.

Overall, Donovan said "housing can be an area of common ground," and called on "all parties to finally make reform a reality."

He highlighted three pillars that the Obama administration has identified as vital to any housing finance reforms. They are:
  • Maintaining consumer access to 30-year fixed rate mortgages, and giving smaller lenders the same access to the capital markets as the big banks;
  • Private capital should be at the center of the system; and
  • Creating an explicit, defined role for the government.
"Let's keep up the pressure to put housing finance reform at the top of the legislative agenda," he said.

The Credit Union National Association continues to advocate for credit unions as housing reform moves forward. CUNA has repeatedly said that credit unions appreciate the need to reform the current housing finance system, but any reforms must not hinder the ability of credit unions to meet their members' housing finance needs in a member-friendly cooperative way. CUNA has also said that the transition from the current system to any new housing finance system must be reasonable and orderly, and the transition deadline needs to be flexible.

Other CUNA suggestions for a future mortgage market include:
  • There must be a neutral third party in the secondary market, with its sole role as a conduit to the secondary market;
  • The secondary market must be open to lenders of all sizes on an equitable basis; and
  • The new housing finance system should emphasize consumer education and counseling as a means to ensure that borrowers receive appropriate mortgage loans.

NCUA sets Feb. 19 field of membership webinar

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ALEXANDRIA, Va. (2/5/14)--Looking to expand your federal credit union's charter, or change charters? The National Credit Union Administration will discuss field of membership strategies for federal credit unions during a Feb. 19 webinar.

The webinar, which is set to begin at 2 p.m. (ET), will inform participants on:
  • When charter expansions make sense strategically;
  • The advantages of each type of federal charter;
  • Policy requirements for various expansion options; and
  • Where to find additional information.
The webinar will be hosted by NCUA Office of Small Credit Union Initiatives Economic Development Specialist Dominic Carullo and NCUA Office of Consumer Protection Consumer Access Analysts Ruth Siragusa and Jason Schultz.

Participants may submit questions in advance at The subject line of the email should read, "Field of Membership Webinar." Participants with technical questions about accessing the webinar may email

To register, use the resource link.

Senate-approved Farm Bill contains CU changes

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WASHINGTON (2/5/14)--The Federal Agriculture Reform and Risk Management Act of 2013 (H.R. 2642), which repeals term limits in the U.S. Department of Agriculture Farm Service Agency (FSA) Guaranteed Loan Programs and crop insurance, was passed by the U.S. Senate on Tuesday by a 68 to 32 vote.

President Barack Obama is expected to sign the bill into law.

The Farm Bill changes above will impact some credit union practices, the Credit Union National Association has noted. (See Feb. 4 News Now story: CUNA watches UDSA loan developments in Farm Bill.)

Credit unions participate in U.S. Department of Agriculture guaranteed farm loans, and the Farm Bill contains language that would repeal borrower term limits in the program. Under the program, some types of loans are repaid within 7 years, and the terms of others cannot exceed 40 years.

Without the repeal, thousands of farmers and ranchers would be forced out of the program, potentially making it more difficult for them to secure credit in the future.

The bill also creates a new crop insurance program that guarantees that the revenue of participating farmers and ranchers will not fall below 86% from the previous year. This type of insurance is not affordable or easily available on the open market, so the government insurance is important to credit unions, as it protects the underlying assets that collateralize some loans made to agricultural businesses.

Registration still open for Feb. 14 NCUA-CFPB town hall webinar

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ALEXANDRIA, Va. (2/5/14)--Registration is still open for a Feb. 12 town hall webinar that will give credit unions direct access to National Credit Union Administration Chairman Debbie Matz and Consumer Financial Protection Bureau Director Richard Cordray.

The free webinar "will be a great opportunity for credit unions to talk with their regulators and get answers to important questions," Matz said.

The 3 p.m. (ET) webinar will feature a broad discussion of federal financial consumer protection regulations, including the CFPB's new mortgage regulations.

Use the resource link below for registration information. During the webinar, participants will be able to type in questions about any topic relating to the credit union industry or the work of CFPB.

Participants may also submit questions to the agency in advance of the session at The subject line of the email should read "NCUA-CFPB Town Hall."