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New COPPA Parental Consent Provision Approved

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WASHINGTON (12/27/13)--The Federal Trade Commission (FTC) has decided that use of certain knowledge-based authentication (KBA) methods may count as a verifiable parental consent (VPC) method under the Children's Online Privacy Protection Act (COPPA) rule..
 
Credit unions that operate websites or online services that collect information about children under age 13 fall under COPPA rules and must provide a COPPA notice clearly and conspicuously on their homepage.
 
Under COPPA rules, online sites and services directed at children must obtain permission from a child's parent or guardian before collecting personal information from that child.
 
The rules specify a number of acceptable methods for gaining parental consent, but also allows interested parties to submit new verifiable parental consent methods to the FTC for approval. If approved, the method can be used by the applicant or any other party.
 
Imperium LLC, a fraud-prevention and identity-validation company, submitted an application for approval from the FTC for its ChildGuardOnline parental consent method. In a letter to Imperium, the FTC recently stated that the use of KBA will be included in the rule as a VCP method, provided it is appropriately implemented based on factors including:
  • The use of dynamic, multiple-choice questions, where there are a reasonable number of questions with an adequate number of possible answers such that the probability of correctly guessing the answers is low; and,
  • The use of questions of sufficient difficulty that a child age 12 or under in the parent's household could not reasonably ascertain the answers.

CFPB Announces Two Actions to Restore Consumers

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WASHINGTON (12/27/13)--The Consumer Financial Protection Bureau has announced two new actions intended to restore consumers that the bureau claims have suffered illegal treatment at the hands of financial services providers.
 
Most recently, the CFPB announced an enforcement action with orders requiring three American Express subsidiaries to refund an estimated $85 million to approximately 250,000 customers for illegal card practices.
 
The regulator charges that its action is the result of a multi-part federal investigation which, it claims, found that at "every stage of the consumer experience, from marketing to enrollment to payment to debt collection, American Express violated consumer protection laws."
 
In the other action, the CFPB joined forces with the U.S. Department of Justice to file a joint complaint against National City Bank (NCB) for allegedly "charging higher prices on mortgage loans to African-American and Hispanic borrowers than similarly creditworthy white borrowers between the years 2002 and 2008."
 
The joint action marks the first lawsuit brought in federal court by the CFPB and the DOJ to enforce federal fair lending laws. On Dec. 6, 2012, the CFPB and the DOJ forged a formal agreement meant to bring strong coordination between the two agencies on fair lending enforcement, including the pursuit of joint investigations such as this one.
 
The agencies also filed a proposed order to settle the complaint that requires NCB, through its successor PNC Bank, to pay $35 million in restitution to harmed African-American and Hispanic borrowers.


 
 
 
 
 
 
 

CUs Have Until Jan. 7 to Comment on ACH Proposal

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WASHINGTON (12/27/13)--The Credit Union National Association is encouraging credit unions to weigh in on a proposal issued last month by NACHA--The Electronic Payments Association, which aims to reduce risk and exceptions on Automated Clearing House (ACH) networks.
 
The NACHA plan could improve NACHA's ability to identify and enforce rules against "outlier" originators, those responsible for the highest levels of exceptions. An originator is any individual, corporation or other entity that initiates entries into the Automated Clearing House Network.

The NACHA proposal would:
  • Reduce the existing return rate threshold for unauthorized debits from 1% to 0.5%;
  • Establish a return rate threshold for account data quality returns (i.e., administrative returns) at 3% and an overall debit return rate threshold (for all return reason codes) at 15%;
  • Clarify the definition of a "reinitiated entry";
  • Apply risk management rules to third-party senders; and
  • Expand NACHA's enforcement authority.
CUNA has extended its deadline for comment to Jan. 7 from Dec. 16.  Comment is due to NACHA on Jan. 13.

NCUA Employees Still Rank NCUA High as Employer

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ALEXANDRIA, Va. (12/27/13)--The National Credit Union Administration maintained a high ranking in the 2013 "Best Place to Work" federal government employee survey, but dipped a little from its 2012 high as sixth-best employer of 22 mid-sized agencies.
 
NCUA Chairman Debbie Matz said that while the agency got high marks from employees in "critical areas" like strategic management, effective leadership and teamwork," it took its biggest ding on employee pay.
 
"Satisfaction with employee pay was clearly a major reason for our overall decline in the 2013 ranks. However, we have now adopted a much-needed pay increase for 2014," Matz said. "NCUA's employees are our greatest asset, and I remain committed to listening to employee feedback and making changes that will continue to improve the working environment for everyone."
 
The agency reported it ranked first with Hispanic and African-American employees among mid-sized federal agencies, and third among veterans. The agency also ranked high overall in teamwork and employee training and development.
 
Nearly 376,000 federal workers participated in the U.S. Office of Personnel Management's Federal Employee Viewpoint Survey used by the Partnership for Public Service to compile the Best Places to Work in the Federal Government rankings. This is the eighth edition of the Best Places to Work rankings; the first was produced in 2003.
 

FinCEN Seeks New BSA Advisory Group Members

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WASHINGTON (12/27/13)--The Financial Crimes Enforcement Network (FinCEN) is inviting the public to nominate financial institutions and trade groups for membership on the Bank Secrecy Act Advisory Group (BSAAG). The Credit Union National Association is a BSAAG member.
 
BSAAG membership is open to financial institutions and trade groups and new members will be selected for three-year membership terms.

Nominations must be received by Jan. 27.
 
BSAAG, which ultimately makes BSA policy recommendations to the U.S. Treasury Secretary, is chaired by the FinCEN director. It was created by the 1992 Annunzio-Wylie Anti-Money Laundering Act.
 
Applications may be mailed to Liaison Division, Financial Crimes Enforcement Network, P.O. Box 39, Vienna, VA 22183 or e-mailed to: BSAAG@fincen.gov. Use the resource link below for more information.
 
CUNA's current term ends in early 2015. Houston FCU was selected last year as a BSAAG member and traditionally there is one credit union on the BSAAG.