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Untrained workers leave companies vulnerable to data breaches

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ITASCA, Ill. (3/23/12)--About 81% of office employees have access to paper documents containing sensitive workplace information, and nearly a quarter of employees leave sensitive paper documents on top of their desks, says a study released Thursday.

Sixty-two percent say their company has a data security policy on which employees are trained. What this means is that some untrained employees may leave their companies vulnerable to a security breach, said Fellowes' Workplace Data Security Report.

Office employees may unwittingly contribute to digital or paper-based security breaches by practicing other risky behaviors, said Fellowes. For example, of those employees surveyed:

  • Twenty-six percent leave their computers unlocked when away from their desk;
  • Fifteen percent throw paper documents containing sensitive information into the trash;
  • Sixty percent maintain a security firewall; andLess than half (44%) ensure their mail is safe by sending it through a secure mailbox.
"Whether electronic or in paper form, confidential information In the workplace is a hot item for theft and the methods employed by criminals to obtain this information are constantly evolving," said John Sileo, national identity theft expert and CEO of The Sileo Group.  "Data protection can be simple as long as the proper procedures are in place and widely practiced," he said. 

Credit unions, which extensive security  policies should make sure all their employees know the policy. They also can pass Sileo's advice along to members with small businesses, as well as make sure they companies they work with train employees about identity theft so that account information at risk at a small business.

His advice:

  • Lock the office when leaving for the day to prevent unauthorized access after hours;
  • Ensure the computer is locked with a secure password with a unique combination of letters and numbers;
  • Ask the information technology department to check that the computer's firewall is secure and up-to-date;
  • Avoid leaving paper documents on the desk or in common printing areas, and store important documents in a locked filing cabinet; and
  • Shred documents that are no longer needed.
Fellowes is an Ithasca, Ill.-based company that sells office equipment, including shredders and record storage solutions. About 1,000 full-time office workers completed the online survey conducted by Toluna Research. Respondents were drawn from a national online panel maintained by Toluna.

CUs Heartland data breach suit dismissed

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HOUSTON, Texas (3/23/12)--A federal judge in Houston has dismissed a lawsuit filed by five credit unions and a bank against key parties in the Heartland Payment Systems' data breach.

The ruling was filed March 14 by U.S. District Judge Lee H. Rosenthal in the U.S. District Court for the Southern District of Texas, Houston division.  The financial institutions involved are Lone Star National Bank, Sea Board FCU in Bucksport, Maine; O Bee CU in Tumwater, Wash.; PBC CU, West Palm Beach, Fla.; and Pennsylvania State Employees CU, Harrisburg.

In an earlier decision the judge had ruled that the financial institutions were not protected as "third-party beneficiaries" in contracts between Heartland and its two acquiring banks, KeyBank and Heartland Bank, but allowed the financial institutions to amend their complaint, which had stemmed from the exposure of their cardholders' information when cyberthieves hacked Heartland's system in 2008. The breach was announced in early 2009.

The amended complaint, against KeyBank, alleged breach of contract, breach of fiduciary duty and negligence. Rosenthal granted the bank's motion to dismiss the case "with prejudice," noting that the financial institutions' negligence and related vicarious liability, and breach of contract claims are the same as previously dismissed.

In dismissing the breach of contract claim, the judge wrote that the contract between Heartland and KeyBank did not state an intent to benefit anyone other than the contracting parties. "The contract is clearly intended to benefit only the contracting parties…The financial institution plaintiffs may indirectly benefit from the contract between KeyBank and Heartland, but that benefit is incidental," Rosenthal said.

On the breach of fiduciary duty claim, the credit union plaintiffs had asserted that they and KeyBank were joint venturers through their common membership in the Visa and MasterCard networks, and should share losses. However, the judge found that "nowhere do they allege that issuers and acquirers generally have agreed to share all losses suffered by the networks as a whole." He said joint ventureship means sharing both profits and losses, which the plaintiffs had not alleged.

More than 560 financial institutions, including at least 178 credit unions, had to reissue credit and debit cards as a result of the breach at Heartland.  Consumers and financial institutions sued Heartland to recoup their losses, and the suits were so many that they were split into two camps: a consumer track and the financial institutions track. Heartland reached several settlements last year with Visa and MasterCard and Discover, which also had sued on behalf of their financial institution clients.

In addition to the decision dismissing the financial institutions track case, the judge ruled Monday on the consumer track case. In it, he approved settlement in the case, with the exception of providing incentive awards to plaintiffs.  The settlement awarded more than $606,192 in attorneys' fees, and awarded costs in the amount of $35,000, according to court documents.

Patelcorp launches HSA investment service

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SEAL BEACH, Calif. (3/23/12)--Patelcorp, a division of $3.61 billion asset Patelco CU in Pleasanton, Calif., will offer its InvestDaily mutual fund investing program to members who have Health Savings Accounts (HSAs).

Patelcorp will work with SaveDaily Inc., a provider of low-cost mutual fund investing platforms used by financial institutions. The addition to InvestDaily, which is built on the SaveDaily platform, adds to the organization's offerings of affordable self-directed mutual fund investing (PR Newswire March 21).

"Our members are looking for better ways to save and grow their money," said Patelco Vice President Mark Hoaglin. "With the high cost of healthcare today, members who have HSAs understand how important it is to make their money work for them, and this is a great way to earn a higher return versus the rates offered on traditional HSA savings accounts."

HSAs were created by a federal law aimed at helping Medicare recipients pay for their prescription drug coverage. Any adult with a high-deductible health insurance plan is eligible to create an HSA and can make tax-deductible contributions to the savings plan throughout their plan year, according to the U.S. Department of the Treasury. This is a fast-growing segment of the financial services industry, with estimated balances in excess of $12 billion being held in health savings accounts in the U.S., said SaveDaily.

"Health Savings Accounts are a perfect fit for our mutual fund investing platform," said Gregory Vacca, SaveDaily president. "Just like an individual retirement account or 401(k), which we also offer, the HSA provides another tax-favored vehicle that daily savers can use to earmark money for future needs. Ideally, these funds will grow at a better rate than traditional checking, savings, and certificates of deposit, which provide only minimal returns."

Credit unions, banks and other financial service providers adopting the platform can offer mutual fund investing to their members/customers at low-cost under their own brand. For one low flat monthly charge, investors in mutual funds can have unlimited positions and unlimited transactions without transaction fees.

HarborOne board votes to pursue bank charter

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BROCKTON, Mass. (3/23/12)--The board of directors at Brockton, Mass.-based HarborOne CU Wednesday unanimously voted to pursue converting the credit union's charter to a mutual cooperative bank.

The next step is to gain the approval of state and federal regulators , then  set a date to have have its 155,000 members vote on the conversion proposal (Banker & Tradesman March 22). 

As required under  law, HarborOne will prepare an information packet explaining the conversion and send it to the National Credit Union Administration and then to the credit union's membership. Information must be sent to members three times: 90 days, 60 days, and 30 days before the date of the membership vote.

When the $1.9 billion asset HarborOne  announced in February it was considering the move, it said that converting to a bank would provide it with more flexibility to expand its customer base; increase lending authority, especially in business lending; and provide access to additional capital such as through sale of stock, which isn't available to credit unions.

The Credit Union National Association and the Massachusetts Credit Union League have stated that they believe a credit union charter is the best option for members of a credit union and that any decision on converting should ultimately be in the members' interest (News Now Feb. 17).

Georgia CUs membership up 3.3 in 2011

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ATLANTA (3/23/12)--Georgia residents are moving their money to credit unions at a rising pace, with membership growing statewide by 3.3% in 2011, one percentage point higher than the 2.3% growth credit unions experienced in 2010.

State consumers are taking advantage of lower fees and better interest rates on services from new- and used-car loans, to savings and checking accounts, according to the semi-annual Member Benefits Index study released Thursday by the Georgia Credit Union Affiliates (GCUA). Total assets at credit unions statewide increased 6.5% during the year (PR Newswire March 22).

The report also indicated that Georgia credit unions last year provided nearly $114.2 million in direct financial benefits to the state's 1.8 million-plus members. Those benefits--better interest rates and fewer and lower fees--average $62 per member or $118 per member household, said GCUA.

The savings have attracted new credit union members in record numbers. More than 24,700 Georgians joined credit unions in the fourth quarter.

"Although the economy has begun to show steady improvement, Georgians remain cautious and continue to seek financially prudent alternatives that help them afford life," said Mike Mercer, GCUA president/CEO and newly elected Credit Union National Association board chair.

On average, fees at credit unions are $5 less than banks for checking accounts, $15 less than banks for credit card late fees and $29 less than banks for mortgage and closing costs.

Also, interest rates for many loans are lower at credit unions than other financial institutions. For example, financing a new $25,000 automobile for 60 months through a Georgia credit union will save members an average of $175 per year in interest expenses, compared to costs at a bank, GCUA said.

The report, compiled by Datatrac, a rate survey firm, uses information from the state's 149 credit unions, and also banking institutions.

Pa. Foundation monitoring flood recovery process

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HARRISBURG, Pa. (3/23/12)--Joe Wambach, executive director of the Pennsylvania Credit Union Foundation, discussed recovery efforts from the Susquehanna River Basin flooding that occurred last fall in Athens, Pa., when he visited John Savelli, CEO of Guthrie FCU in Sayre, and Michael Viselli, CEO of Ingersoll-Rand FCU in Athens.

From left, Joe Wambach of the Pennsylvania Credit Union Foundation meets with Kathy Kilhefner, flood victim and employee of Guthrie FCU, Sayre; John Savelli, CEO of Guthrie FCU; and John Seaver, Guthrie director of lending, to assess the progress of flood relief efforts. (Photo provided by the Pennsylvania Credit Union Association)
Wambach spoke with Kathy Kilhefner, a Guthrie FCU employee, who not only had to sell her destroyed home, but also lost her husband from a heart attack shortly after the flood, said the Pennsylvania Credit Union Association (PCUA) (Life is a Highway March 22).

Wambach also spoke with Chuck Paul, a member of Ingersoll-Rand FCU, and said he was encouraged by the progress that Paul and many others had made.

"Clearly the warm weather between December 2011 and March 2012 has had a positive effect on the ability of credit union employees and members to rebuild in Athens," Wambach said.

Kilhefner expressed thanks for a $1,500 contribution from the foundation, which has helped her find an apartment and begin the long road to recovery. Paul has nearly completed work on his home and praised the foundation for providing him with $1,500, which gave him a head start before funds became available from his insurance company.

"These situations are undoubtedly being played out among many of the other 239 victims who received grants from the Pennsylvania Credit Union Foundation," said Jim McCormack, PCUA president/CEO. "This is all the more reason why it is so important that credit unions and friends continue to support those who are victims of both natural and financial disasters through the foundation."

In total, $195,000 was distributed to flood victims through the foundation in September and October.

CUANY launches Facebook page for its convention

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ALBANY, N.Y. (3/23/12)--The Credit Union Association of New York has launched a new Facebook page dedicated to its annual convention.

The page will feature exclusive 2012 convention updates, stories, past convention photos, contests and giveaways.

The association has also launched a Twitter account, offering followers agenda highlights, updates, special contest announcements and more. The association will be tweeting exclusively about convention from through June.

"By taking advantage of social media channels, we can give our credit unions even more opportunities to experience the convention and stay connected," said William J. Mellin, the association's president/CEO.

"Inspiration Awaits" is the theme for this year's Annual Convention and Meeting, which will run from June 7 to 10.

CU System briefs (03/22/2012)

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  • CHATSWORTH, Calif. (3/23/12)--Autoland Inc., a credit union car buying service, has created a Charitable Grant Program to assist local communities by funding charities supported by its partner credit unions. The Chatsworth, Calif.-based company said credit unions wishing to have a charity considered for a grant should apply, with details on the charity's mission and goals, the specific program or projects the grant would support, and how the project would benefit the local community. Each quarter throughout 2012, Autoland will select a different charity to receive a $1,500-$2,000 grant. Charities may also apply and list the credit unions that support their organization.  The deadline for the first grant is March 30. Funds will be awarded in mid-April. To be eligible, the charity must be a non-profit 501 (c)(3) charity located in California, Oregon, Washington or Nevada …
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    EAST WINDSOR, N.J. (3/23/12)--McGraw-Hill FCU hosted the VOICE Foundation's fifth annual Casino Night on March 9 in Princeton, N.J.  More than 150 attendees participated in a Texas Hold 'Em Poker Tournament , black jack, craps and roulette to help raise $33,470 for local charities, including National Junior Tennis and Learning of Trenton  and the Children's Miracle Network Hospitals. The VOICE Foundation, the credit union's charitable arm, stands for volunteerism, outreach, involvement, community and education. In the photo, McGraw-Hill FCU President/CEO Shawn Gilfedder (third from right) joins credit union employees during a trophy presentation at the event.   (Photo provided by McGraw-Hill FCU) …
  • SAN ANTONIO (3/23/12)--San Antonio Spurs forward/center Tiago Splitter  (second
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    row, center) brought La Mariposa by Francisco Jimenez to life at the San Antonio Botanical Gardens, reading in Spanish to fourth-grade students from the Bonham Academy in San Antonio. The class won the grand prize in the High Five Readers Challenge, presented each year by $2.9 billion asset SACU and Magic 105.3.  SACU, the "Official Credit Union of the San Antonio Spurs," has been involved with High Five Readers Challenge for 10 years.  The challenge is extended to all elementary schools in Bexar County to help students in first through fifth grade exercise their minds and imaginations by spending more free time reading. This year 169 classes participated, involving 1,566 students from 13 school districts, six charter schools and 18 private schools. The challenge is part of the National Basketball Association's Read to Achieve Program. (Photo provided by SACU) …