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Social Media Helps CUs Inform Members about Breach

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MADISON, Wis. (12/30/13)--Social media had a significant role in the way some credit unions communicated with their members after Target announced that its customers' data had been breached. Those same media also played a role in members' response to credit unions' actions taken to protect their personal information after the breach.
 
In Harrisburg, Pa., for example, the $4.2 billion asset PSECU took a proactive approach when the news broke on Dec. 18 that 40 million debit and credit cards had been compromised in the breach.  It acted quickly to determine how many members were affected and discovered it had more than 28,000 debit and credit cards potentially compromised, according to the Pennsylvania Credit Union Association (Life is a Highway Dec. 27).
 
PSECU decided to reissue cards, but with the Christmas holidays, it would be difficult to get the message out to its members. "The solution was to go to electronic delivery channels in order to get the message out," said PCUA. PSECU sent an e-mail to nearly 21,000 members and posted a message on its Facebook page.
 
"The response of the membership was quick and positive," the credit union told PCUA. "To date, the Facebook post received 191 'likes,' 52 shares and 60 comments.  It also had a total reach of over 5,300 views, one of the highest since PSECU joined social media," the credit union said.
 
Many credit unions placed alerts on their websites. Richmond, Va.-based Virginia CU, for example, sent notices to 15,000 members with compromised numbers and placed an alert on its website urging members to monitor their accounts and consider changing their PINs (nbc12.com Dec. 20). Family Security CU in Decatur, Ala., also placed an alert on its site urging members to monitor their accounts closely (al.com Dec. 24). The $516 million asset credit union said 2,000 member cards were impacted.
 
Others used call centers to provide information.  Redstone FCU, a $3.5 billion asset credit union based in Huntsville, Ala., told al.com and the Decatur Daily (Dec. 26) that the call volume at the credit union spiked on Dec. 20, just after Target's announcement. The credit union received 200 calls disputing charges on their accounts within a 24-hour period. It normally has 500 to 1,000 such calls in a month.  Its staff worked through the weekend after the breach to catch up on paperwork associated with the breach.
 
Social media also was used by members responding to their credit unions' actions to protect the compromised accounts from fraud. White River CU, a $55 million asset credit union in Enumclaw, Wash., quickly alerted members that its Visa processor had placed an automatic block on the affected accounts. However, some members first learned of the action when their card was denied at stores and ATMs. Many understood, but some vented their frustrations on Facebook, the credit union told the Northwest Credit Union Association (Anthem Recap Dec. 27).  "I'm grateful you did this," said one member's post, "but I was mortified when my card was declined..."
 
Breaches have hard costs--in terms of reissuing cards and fraud on accounts--and softer costs--the impact on the reputation of the institution issuing the cards. Retailers like Target and card processors need to be held more responsible for data breaches, Scott Burgess, president/CEO of the $571 million asset Rivermark Community CU, Beaverton, Ore., told NWCUA.
 
NWCUA said credit unions in Washington state have available a state law, RCW 19.225.020, that allows institutions to file lawsuits if a merchant is negligent in safeguarding its customers' information. Northwest credit unions led the push for the new law in 2010.  "We were literally the only group in Olympia pushing for this change in the law at first," said Mark Minickiello, NWCUA vice president for legislative affairs. "It took us three years to get consensus and change the law to allow financial institutions to recover some of the costs incurred in a data breach. It was a David vs. Goliath effort."
 
In other developments late last week related to the Target breach:
  • The Credit Union National Association announced last week it would create a website this week to collect information from credit unions about the costs they have incurred in response to the Target breach and that credit unions should already start keeping a tally of their costs related to replacing cards and monitoring for fraud on the compromised cards. See News Now story, CUNA CompBlog Provides Target Breach Response Tips in today's issue and Friday's story, CUNA Urges CUs to Collect Data on Costs of Breach. Use the links.
  • Target announced Friday that encrypted debit-card PINs were among the financial information stolen. The fact they were still encrypted during the theft reduces the risk to consumers who used those PINs at the point-of-sale terminals, Target said (FoxNews.com Dec. 27). The PIN information was fully encrypted at the keypad, remained encrypted within Target's system, and remained encrypted when the data was removed from the systems, said a Target spokeswoman. However, some are urging consumers to reset their PINs.
  • As of last week, more than a dozen Target customers had filed lawsuits in federal courts. Also, the Department of Justice said it is investigating the breach, reported Fox.

CU System Briefs (12/30/2013)

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  • OAK RIDGE, Tenn. (12/30/13)--Police in Oak Ridge, Tenn., are investigating an attempted Christmas Day theft from a Y-12 FCU ATM (The Oak Ridger Dec. 27). Law enforcement officers received reports of the alleged crime on Oak Ridge Turnpike at about 6 a.m. Police said that the suspects first attempted to use a stolen truck to dislodge the cash machine from its foundation, then used a Bobcat tractor to destroy the ATM at the $689 million-asset credit union. No cash was taken from the ATM, but both the truck and tractor were stolen from a nearby Waste Connections facility. The estimated damage to the cash machine and the two vehicles is more than $50,000 ...
  • RALEIGH, N.C. (12/30/13)--Visitors to the North Carolina Credit Union League website will be redirected to a new site at noon Tuesday. The NCCUL will redirect users to the Carolinas Credit Union League website at carolinasleague.org (The Weekly Conversation Dec. 27). The CCUL, which opens Thursday, is the result of a merger between the NCCUL and the South Carolina Credit Union League. Credit unions that list the No-Surcharge ATM network on their websites should make sure the link is updated to http://www.nosurchargeatms.com by Tuesday morning ...
  • COLUMBUS, Ohio (12/30/13)--The Ohio Credit Union League promoted two executives, it announced Friday (eLumination Newsletter Dec. 27). Membership manager Laura Busque has been appointed as director of membership engagement, and director of public affairs Patrick Harris has been named director of legislative affairs. Busque, who joined OCUL in 2007 as its outreach manager, has helped the league foundation develop its financial education grant program. Harris, who also joined the league in 2007, will oversee lobbying in addition to his media and advocacy work ...
  • KAILUA KONA, Hawaii (12/30/13)--Hawaii Community FCU named former Iowa Credit Union League CEO Thomas Griffiths as its interim CEO/president beginning Thursday, the credit union said on Christmas Eve. Griffiths retired from the Iowa league in 2006, and he has served on the supervisory committee of the Kailua Kona-based credit union since January 2012. HCFCU board chair Dwight Manago said that Griffiths will help the credit union find a permanent replacement. Current CEO/President James Takamine announced that he was leaving the $361 million-asset credit union effective Wednesday ...

Kiplinger Notes Advantages of Using CUs

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NEW YORK (12/30/13)--Add Kiplinger.com to the growing list of consumer finance publications noting the benefits of credit unions to their members.
 
In its "Basics of Money" column, "How to Size Up Credit Unions," Kiplinger.com points out benefits of credit unions in terms of costs to the consumer, services, and safety of deposits guaranteed by the National Credit Union Share Insurance Fund.
 
"Unlike banks, credit unions are nonprofit organizations. Unconcerned with making a profit, they can often pay more interest on accounts and charge less in fees," said the column. "They offer a distinct advantage for interest-earning checking accounts, which they call share-draft accounts, because they pay more interest on average and most impose no minimum-balance requirements."
 
The column also points out that although credit unions don't have extensive branch networks, "many belong to a surcharge-free ATM network so you have access to thousands of fee-free ATMs."
 
It notes that "credit unions usually offer the best deal available" on loan rates, account fees and credit card balances.
 
"If you are eligible to join a credit union, you should certainly compare what it has to offer with what's being offered elsewhere," the publication suggests.
 
For the full article, use the link.

CUs Rank High in NerdWallet's Best of '13

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MADISON, Wis. (12/30/13)--Credit unions were well-represented in NerdWallet's 2013 Best in Banking Awards.
 
The personal finance and financial literacy website cited credit unions and banks in five categories: Best Savings Account, Best Checking Account, Best Student Account, Best Blog and Best for Nationwide Access.
 
Ent FCU, with $3.7 billion in assets, Colorado Springs, Colo., was named the Best Student Account Category for its free college checking and Lion One Checking. NerdWallet honored Ent FCU because it charges no monthly fees, waives ATM fees and offers interest on its student checking accounts. Ent is also a member in the CO-OP ATM and CO-OP Shared Branch networks.
 
Mountain America CU, based in West Jordan, Utah, was the winner in the Best Blog category. Published by the $3.6 billion-asset credit union, Mountain Money was praised for its variety, freshness and social engagement. "While more and more financial institutions have shared educational content on their websites and over social media in the past year, some are leading the pack by covering a big variety of topics, posting regularly and engaging with the online community," NerdWallet reported. "Mountain America CU's blog tackles this feat with ease and style."
 
Hudson Valley FCU was top-rated in the Best for Nationwide Access category for its large surcharge-free ATM network and shared branches. NerdWallet cited the strength that shared branching brings to the entire credit union industry, but highlighted Hudson Valley FCU's efforts. The $3.8 billion-asset credit union, based in Poughkeepsie, N.Y., also offers access to 77,000 surcharge-free ATMs across the country through the CO-OP, Allpoint, Presto! and SUM networks.
 
State Employees' CU (SECU), Raleigh, N.C., received an honorable mention in the Best Savings Account category for its share account. "Unlike most entry-level savings accounts, the Share Account offers an extremely competitive interest rate (0.75% annual percentage yield)," NerdWallet said of the $28.8 billion-asset credit union. "Just $25 is required to open the account and avoid a $1 monthly fee."
 
SECU also captured an honorable mention in the Best Student Account category for its Students' Choice Checking. The account has no monthly fee and offers access to the nationwide surcharge-free Allpoint ATM network. It also includes a bonus rate on certificates of deposit and a 0.25% auto loan discount.
 
Bethpage (N.Y.) FCU, with $5.4 billion in assets, received an honorable mention in the Best Checking Account category for the long list of benefits it offers on its checking accounts. "Bethpage does not charge out-of-network ATM fees, and checking balances can earn 1% APY for receiving online statements, utilizing direct deposit, and making 10 debit card purchases each month," NerdWallet reported. "New members can also earn a $100 bonus for trading in their debit card or unused checks from another institution."
 
For the full article, use the link.

Member-owners Receive Year-end Bonus Dividends from CUs

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MADISON, Wis. (12/30/13)--When credit unions distribute dividends at year end, they highlight their success and the benefits of being a member-owner of their institutions.
 
A number of credit unions recently announced patronage payments worth millions back to their members. Many coincided with the holiday season, giving member-owners a timely bonus.
 
In Peoria, Ill., CEFCU announced a record dividend of $12 million, with $6 million going to borrowers and $6 million going to savers. "When business for a credit union is better than projected, members share in those benefits," said Mark Spenny, president/CEO of the $4.8 billion-asset credit union. Over the past 14 years, CEFCU has returned $75 million in dividends to its member-owners.
 
More than $11 million will be distributed to members of Dow Chemical Employees' CU, Midland, Mich. The $1.4 billion-asset credit union will rebate 60% of the total interest paid on eligible loans to borrowers in good standing and give an additional 60% of interest earned to depositors in good standing. The percentage is the highest in the credit union's dividend history.
 
Eastman CU, Kingsport, Tenn., notified its member-owners that its extraordinary dividend--a record-breaking $6 million--will be distributed to their savings accounts in January.  The credit union said this is the 17th year of rewarding loyal members, bringing the historical total to $61 million. "This year's extraordinary dividend is just another affirmation of ECU's commitment to members," said Olan O. Jones, president/CEO of the $2.8 billion-asset credit union.
 
Interest rebates and dividend bonuses at Guardian CU, Montgomery, Ala., were distributed to more than 20,000 members the week before Christmas. The $244 million-asset credit union said it anticipated that the $785,000 would have a significant impact on the community and local businesses as members reinvested the funds into the local economy. In three years, Guardian CU has distributed $2.3 million.
 
The board of $858 million-asset Goldenwest CU approved a 4.25% bonus for its share-savings program, resulting in $760,000 going back to members. In his blog, President/CEO Kerry Wahlen said that in the past 10 years, the Ogden, Utah-based credit union has distributed $5.875 million to members.
 
More than $1.3 million in loyalty dividends was deposited into members' accounts at Scott CU, Edwardsville, Ill. The $922 million-asset credit union gave an additional 3% on deposits and a 3% rebate on loan interest. "All of our members own the credit union, and they benefit when we are successful," said President/CEO Frank Padak (The Edwardsville Intelligencer Dec. 20). In the past five years, members have received more than $4.6 million in bonus dividends and loan interest rebates.
 
For the 17th consecutive year, member-owners of Hanscom FCU, Hanscom Air Force Base in Massachusetts, will receive a loyalty dividend. The $1 billion-asset credit union will pay 1% on earned dividends and consumer loan finance charges, over and above the regular dividends earned throughout the year.
 
Dividends are not restricted to natural person members. The board of directors of Louisiana's CU Cooperative Branching approved a 4.5% dividend to credit unions who are shareholders in the shared branching credit union service organization (eNews Dec. 18).

Ohio CUs to Lawmakers: Municipalities Want CUs for Deposits

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COLUMBUS, Ohio (12/30/13)--Local municipalities and government entities want to be able to make deposits to credit unions, Ohio credit unions told key state lawmakers recently.
 
The Ohio Credit Union League coordinated meetings between credit unions and key members of the Ohio General Assembly as part of the push to make credit unions eligible to receive public funds deposits, said the league (eLumination Newsletter Dec. 27).  The league is backing House Bill 221, which would allow credit unions to accept such deposits.
 
Dynamic FCU CEO Diane Rodriguez told House Assistant Majority Whip Jim Buchy (R-Greenville) that her credit union has been approached frequently by local government entities.  "Unfortunately, as we have had to turn them down, the phone calls are getting fewer," she said.  Rodriguez also explained that her credit union recently provided a small business loan to an unemployed member and helped another member save his home, said the league.
 
Also, Defiance-based Midwest Community CU hosted Rep. Tony Burkley (R-Payne) and asked for his support for HB 221.  Burkley is a member of the State and Local Government Committee, which is considering the bill.

Other states that have laws on the books or are considering legislation to allow credit unions to accept public deposits include California, Illinois, Missouri, New Jersey, New York, Oregon and Washington.

TMG: Card Use Inches Up During Holiday Shopping

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DES MOINES, Iowa (12/30/13)--Credit and debit holders who carry cards issued by The Members Group spent only slightly more on average during Black Friday and Cyber Monday in 2013 than they did in 2012, according to figures released by the card processing and payment solutions provider.
 
The average transaction amount for debit cardholders was $134 during Thanksgiving week, compared with $131.66 in 2012, the processor said. In 2011, the average debit transaction amount was $121.87, creating a 12% increase over two years.
 
"The numbers seem to indicate a trend in consumer comfort using their debit cards for larger transactions," said Georgann Smith, TMG vice president of marketing. "Financial institution issuers bracing for the impact of debit interchange regulation may be able to leverage this preference for larger production from their debit portfolios."
 
The average credit card transaction increased to $222.98 in 2013 from $222.16 a year earlier, TMG said. In 2011, the average was $208.14.