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Despite arrests dont let guard down on ID thefts

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MADISON, Wis. (8/7/08)--The indictments of 11 people in the largest data breaches in history may be comforting news for consumers, but credit unions must stay on guard to protect their members' data, says CUNA Mutual Group. "The efforts of law enforcement to bring the perpetrators of these data thefts to justice are commendable," said Jeff Post, president/CEO of CUNA Mutual Group, commenting on the Justice Department's announcement Tuesday that 11 people had been indicted on fraud charges related to thefts at nine retailers, including TJX Cos. and BJ's Wholesale Club. "These breaches remain a crime of opportunity," Post added. "Data breaches such as TJX are enabled by retailers who continue to store personal account information against card association rules and with disregard for the safety of these very organizations' customer' credit card information. "If merchants would simply follow the card association rules, this supply of plastic card data would not be available to steal," Post said. Continued vigilance is needed, according to Chuck Cashman, director, credit union protection product management at CUNA Mutual. "This is just the tip of the iceberg. For every arrest of this magnitude, there are multiple other professional and amateur thieves trying to exploit the system," Cashman said. "If anything, more vigilance is needed since high profile cases inspire copy-cat crimes and challenge the fraud community to further 'beat the system.'" He noted that the total figure of losses for all these breaches isn't known "but obviously it is in the multi-millions." The data breaches hurt credit unions, which were among those footing the bill for costs related to reissuing compromised cards, helping members fix problems, and monitoring fraudulent transactions. CUNA Mutual Group had sued BJ's Wholesale Club to recoup credit unions' claims for losses in that breach. On June 12, the company learned the Massachusetts State Court in Boston granted BJ's and its bank, Fifth Third Bank, their motions for summary judgment in the lawsuit. "Essentially, we lost the first round at the trial court level," said Phil Tschudy, media relations manager at CUNA Mutual. "We respectfully disagree with the Trial Court's decision and have since appealed this decision. "CUNA Mutual will continue its efforts on behalf of the credit union system to hold merchants accountable and establish a right to fully recover for the losses caused by the failure of merchants and their acquirers to follow the rules prohibiting the storage and retention of credit and debit card data," Tschudy said. CUNA Mutual views as a "positive development" an appellate court's recent overturning a trial court decision in favor of Pennsylvania State Employees CU in a data breach case. The company "will also continue to support various league efforts to adopt legislation in their states that would make it clear that merchants are responsible for losses resulting from their failure to follow the rules," Tschudy said. TJX Cos., whose massive computer data breach affected an estimated 45 million to 94 million credit and debit card numbers, said banks and credit card agencies must work closely with retailers to protect customer privacy. "The sheer number of retailers attacked by these cyber-criminals demonstrates the much broader challenges in protecting sensitive customer data from this increasing threat," said TJX spokeswoman Sherry Lang (Orlando Sentinel Aug. 6). The international ring allegedly gained millions of dollars from ATMs using the stolen card numbers and laundered the funds in banks in Eastern Europe (News Now Aug. 6).

New trend uses admin software to hijack PCs

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NEW YORK (8/7/08)--Credit unions looking to protect themselves from malicious software should take note of a recent incident involving a Russian gang that used computer network administrative software to hack into thousands of computers. Joe Stewart, director of malware research at SecureWorks, a computer security firm in Atlanta, identified the gang, which used malicious software to control as many as 100,000 computers from a computer center in Wisconsin (The New York Times Aug. 6). To prevent hacking, credit unions should educate their staff against installing unknown software programs, Jim Stickley, chief technology officer, TraceSecurity, told News Now. TraceSecurity is a CUNA Strategic Services provider that provides security compliance management services. Hackers often coerce users to install malware without their knowledge. Stickley used the example of an e-mail greeting card. Hackers often send e-mails under the guise of a greeting card company, asking users to click on a link to see the message. When the recipients click on the link, they receive an error message telling them they don’t have the latest software installed to view the card. The message also invites them to download software so that they can view the card. Most people opt to install the suggested software and don’t realize that it is malicious. Once the malware has been installed, hackers can monitor users’ personal information. “When you install something on a computer, you have to be so careful,” Stickley said. Credit unions can block e-mail attachments with executable files and can lock down desktop computers to prevent them from installing programs. Credit unions also should monitor computer traffic. “If you’re seeing a lot of traffic from one computer, be very concerned,” Stickley said. Monitoring traffic may be easier for larger credit unions that have a large information technology (IT) staff. Smaller credit unions, who may have only one person devoted to IT operations, will have to educate their staff against installing software from an unknown source if they can’t monitor all traffic. TraceSecurity constantly reviews the different threats on the Internet. “There’s so many different things out there,” Stickley said. “It’s awful.” Most of the threats are similar. “It’s always a repeat, just packaged in a new way,” he said.

More CUs report phishing vishing scams

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MADISON, Wis. (8/7/08)--Several more credit unions reported that they have been fraudulently used in phishing and vishing scams that target consumers:
* E-mails were sent to Vermont residents by scammers purporting to be from Vermont State Employees CU (VSECU), a $366 million asset, Montpelier, Vt.-based credit union, informing consumers of attempts to steal their personal information by compromising their credit card accounts. The e-mail tells recipients to call a Vermont phone number and asks them for their 16-digit credit card number to reactivate their card. Exploiting the public’s increasing knowledge of scams, the e-mail even uses a copyright notice from VSECU at the bottom of the e-mail (The Barre Montpelier Times Argus Aug. 5). * Fraudsters posed as officials from Chesterfield (Va.) FCU, a $52 million asset credit union. The scam began with automated phone calls and then progressed to e-mails--all claiming to come from the credit union. Respondents were given a phone number to call and asked for personal information. In some instances, the phone number was toll free; in others, the phone connection went to Iowa and Oregon. The scam targeted members and nonmembers (Richmond Times-Dispatch Aug 6). * In a scam known as spoofing, thousands of members of Langley FCU, a $1.224 billion asset, Hampton, Va.-based credit union, received telephone calls Friday afternoon, with a recording asking them to call an 877 number that appeared to be from the credit union. When members called the number, they were asked for personal information such as a personal identification number for an account. The phone number has been deactivated by the phone company, according to the credit union ( Aug. 3). * Scammers targeted members of Three Rivers FCU, a $455.5 million asset, Fort Wayne, Ind.-based credit union, with a recorded message telling them to call in because security at the credit union had been breached. Once connected, the respondents are told to press “1” and enter their account number, making the information available to identity thieves. The credit union warned members that its security has not been compromised and that they should not respond to the recording (The Journal Gazette Aug. 6). * A fraudulent e-mail that appeared to be from the National Credit Union Administration (NCUA) that was sent to various credit union members provided a link to a mock-up of the NCUA website. Recipients were asked to provide credit card information and other personal data (Targeted News Service July 29).

Northwest FCU implements gas subsidies for employees

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HERNDON, Va. (8/7/08)--Northwest FCU (NWFCU) has taken steps to ease its employees’ pain at the pump by implementing a temporary gas subsidy program. The six-month program is designed to aid non-management staff who commute 10 miles or more from their homes to their branch/office location. As gas prices continue to impact employees’ budgets, the subsidy is a step toward providing employees and their families some relief, said the credit union. Like employees in many metropolitan areas, many NWFCU employees live well outside of counties close to Washington, D.C. Several staffers live as far as West Virginia, southern Virginia and northern Maryland and travel more than 70 miles one-way to the credit union. NWFCU’s gas subsidy program is in effect at least through year-end. Currently, 30% of the credit union’s 300-employee work force has enrolled in the confidential program. “When the gas subsidy was announced, I was touched by the gesture. Even though NWFCU can’t fix gas prices, it is nice to know it is trying to help,” commented one employee through the credit union’s anonymous Intranet e-mail. “It’s a good feeling to know your employer is in touch with the [impact of] high gas prices on us.” NWFCU also has added a carpool directory on its Intranet to help employees locate co-workers in their neighborhood who are interested in ride sharing. “The gas subsidy program is just one way we are trying to help our employees during this turbulent economy,” said Gerrianne “Winky” Burks, NWFCU president/CEO. “Application for the subsidy is kept completely confidential, as our goal is to ensure any employee who needs help, gets help--without reservation.” NWFCU is a $1.5 billion asset, Herndon Va.- based credit union.

China tent-based CU Quake had financial consequences

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CHENGDU, China (8/7/08)--A credit union--now operating from a tent in the earthquake stricken Sichuan Province of China--says the May 12 earthquake has had surprising financial consequences, both for the credit union and the people there. Xu Yongjun, an employee of the credit union, which was not identified by name, reported that its savings has gone up by $1.5 million since the May 12 earthquake struck the region and left nearly 90,000 people dead or missing (National Public Radio Aug. 6). Xu Yongjun told NPR that savings rose because people no longer have houses in which to hide their money. He expressed confidence that China's economy would bounce back to the way it was before May 12, but estimated it would take five years "if things are good," and 10 years, if they are bad. The earthquake, which registered 8.0 on the Richter scale, caused economic losses of $150 billion, NPR said. Many people are living in tent cities until they move into new prefabricated buildings. But many have a can-do attitude and already have started microbusinesses from the tents. Examples include a tent supermarket, drink shops, hot pot restaurants, lawyers' offices and accessories stores. Since May 12, the region has felt 12,600 aftershocks, seven of them above 6.0 on the Richter scale ( Aug. 6). The latest one, registering 6.0, was Tuesday.

Hispanic immersion program deadline extended

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MADISON, Wis. (8/7/08)--The World Council of Credit Unions (WOCCU) extended the deadline for enrollment in its 2008 Hispanic Marketing Immersion Program to Aug. 15. Applicants must submit completed registration forms for the few remaining spaces to WOCCU no later than 12 p.m.
From left, Guadalupe CU Loan Officer Daniel Rael and President/CEO Winona Nava compare Spanish class notes with Hannah Carriger, teller manager for Army Navy FCU, at the 2007 Hispanic Marketing Immersion Program. The trio honed language skills and learned about Hispanic culture in Guanajuato, Mexico. (Photo provided by the World Council of Credit Unions)
In the Hispanic Marketing Immersion Program, credit union staff and executives become immersed in Mexico's culture while working in Mexican credit unions and exploring their marketing strategies. The program's goal is to give participants insight into ways to reach Hispanic consumers back home. The dates for the program are Sept. 20-27 for a one-week experience, and Sept. 20-Oct. 3 for a two-week experience. This year's program, which takes place in Morelia in central Mexico, is a 360-degree experience, incorporating language instruction, total cultural immersion and an internship at a Mexican credit union, or caja. Participants begin each day with four hours of Spanish language instruction at a certified language school, and are classified according to their individual skill level--from beginner to native Spanish speaker. The participants can apply what they learn from language classes in a real-world setting while living with a Mexican host family. They also will serve a practical internship with either Caja Morelia-Valladolid or Caja Alianza. The program’s session are priced at $1,600 and $2,600. The cost includes attending the second annual U.S.-Mexico Marketing Workshop. Workshop attendees will view marketing presentations from the four largest Mexican cajas. The workshop will be held on Sept. 26 between the program's first and second weeks. For more information, use the link.

Massachusetts CU offers home-heating loans

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ACUSHNET, Mass. (8/7/08)--Acushnet FCU is offering its members a new home-heating loan program to offset the cost of heating bills this winter. Members can borrow up to $3,000. The loans are repaid over 11 months at a 4% interest rate (SouthCoast Today Aug. 6). The credit union already has started to receive applications for the program. Fall River Municipal Employees CU, Fall River, Mass., offered a similar program last year. The credit union is deciding whether or not to offer it again this year, Lisa Reid, consumer lending manager, told SouthCoast Today. Oil heating bills are expected to exceed $3,000 next year, according to a Donahue Institute report, the newspaper said. As of July 31, home heating oil cost $4.30 a gallon in Massachusetts.

Management school grads donate 27k for scholarships

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MADISON, Wis. (8/7/08)--This year’s 72 graduates of CUNA Management School in Madison, Wis., presented $27,000 toward scholarships during their July 24 graduation ceremony. Twenty students graduated with honors and five graduated with high honors. One student, Connie Lodde, Independent FCU, Anderson, Ind., graduated with highest honors. The scholarship money presented by the class was raised during the three-year professional development program through fundraising events held each summer in the school’s two-week session, and through individual donations from credit unions and the graduates themselves. The fundraisers included merchandise sales, silent auctions, game nights, raffles, golf outings, and more. The scholarship fund comprises donations from the graduating class, U.S. Central, CUNA Mutual Group, and the Credit Union National Association, and is earmarked to help smaller credit unions and individuals without available financial resources to become future CUNA Management School attendees. CUNA Management School in Madison is the longest-running continuing education program in the credit union movement. It consists of a two-week session each summer for three years. About 4,500 men and women have graduated from the program since its inception in 1954. Graduating with high honors were:
* Michael Augustine, United Consumers CU, Independence, Mo.; * Dave Cottone, Ohio HealthCare FCU, Dublin, Ohio; * Kurtis Neeper, Superior FCU, Lima, Ohio; * Anneliese Steen, New Mexico Educators FCU, Albuquerque, N.M.; and * Patrick Wohlfrom, Sharefax CU Inc., Batavia, Ohio.
Graduating with honors were:
* Susan Chadwick, America First FCU, Ogden, Utah; * Scott Chretien, York County FCU, Sanford, Maine; * Diana Davidson, Rock Valley FCU, Loves Park, Ill.; * Carla Day, Hawthorne CU, Naperville, Ill.; * Ronald Eide, Enterprise CU, Elm Grove, Wis.; * Laura Hassan, Market USA FCU, Laurel, Md.; * Lisa Holtman, Jackson Co Co-Op CU, Seymour, Ind.; * Eric Judy, Sangamon Schools CU, Springfield, Ill.; * Pamela Katin-Vetter, Railway CU, Mandan, N.D.; * Kenneth Kiefer, Abbott Laboratories Employees CU, Gurnee, Ill.; * Laurie Ann Moody, Belvoir FCU, Woodbridge, Va.; * Carrie O'Halloran, HarborOne CU, Brockton, Mass.; * Bruce Main, Alliant CU, Cedar Rapids, Iowa; * Michael Pierino, OPCS FCU, Orchard Park, N.Y.; * Laura Roberts, Chivaho FCU, Chillicothe, Ohio; * Shari Seney, UFirst FCU, Plattsburgh, N.Y.; * Janet Shaffer, Afena FCU, Marion, Ind.; * Kenneth Smith, TruGrocer FCU, Boise, Ind.; * Kara VanWert, Veridian CU, Waterloo, Iowa; * Cassandra Velasquez, Monroe Area FCU, Monroe, Mich.; * Joshua Vissering, Superior Iron Range Community FCU, Negaunee, Mich.; and * Richard Wall, Carolina Foothills FCU, Greenville, S.C.
For a complete list of graduates, use the link.

Fin-ed mandate nears CUs reach out to Ohio schools

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DUBLIN, Ohio (8/7/08)--The Ohio Credit Union League and Ohio credit unions are working with public high schools in the state to help the schools meet an upcoming financial education mandate. The league sent more than 800 letters to guidance counselors reminding them that all public high schools will be required to include financial education in their curricula by 2010. “Together, credit unions and educators can propel young people to a promising financial future,” wrote Laura Busque, league outreach manager, in a letter to the counselors. The letters also introduced the counselors to the league’s free Web portal,, which offers free financial education lesson plans and curricula for students of all age groups. The lessons are provided by the National Endowment for Financial Education, Junior Achievement and Thrive by Five. “Credit unions are arming our educators with proven lesson plans so they can share this knowledge with students now, more than one year before the mandate deadline,” said Paul Mercer, league president. More than 350 credit unions received toolkits earlier this year so they could partner with area schools. Only 5% of Ohio adults were taught personal finance when they were young, and 23% said they encouraged financial literacy in their families, a 2007 league study indicated. “Good personal financial habits are developed at a young age,” Mercer said. “Financial literacy among our youth is a necessity.”