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As threats grow, Mich. league work for members' data safety gets spotlight

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WASHINGTON (4/16/14)--Even with the U.S. Congress out of session until April 28, credit unions are keeping the focus on what must be done to improve the country's data security.

The Michigan Credit Union League's efforts in support of consumer data security gained coverage on MiBiz.com , with the league suggesting that the Consumer Financial Protection Bureau supervise retailer consumer data protection practices and how those retailers investigate consumer data theft.

"We think retailers should have skin in the game, and they ought to be responsible and have a vested interest in protecting customers' information," MCUL Chief Operating Officer Ken Ross told MiBiz.com . While credit unions and banks are subject to strict security requirements, retailers are not held to the same standards. If one part of the larger puzzle doesn't fit correctly, there can be serious downstream implications, he told MiBiz .

The retailers, Ross argued, must make security a priority, as credit unions and others do.

A data breach at Target stores last year resulted in the theft of 40 million debit and credit cards, and encrypted PIN data, and the names, mail and email addresses, and phone numbers of up to 70 million individuals. Credit unions incurred more than $30 million in losses as a result of the breach.

While a recent Newtek Business Services survey showed that 67% of business owners polled were not concerned about credit card security at their businesses, data breaches and other methods of online theft are becoming all too common. (See March 7 News Now : Survey says majority of business owners unconcerned about card security.)

Around 20% of Americans have been affected by a data breach, a January Pew Research Center report showed. According to the Pew report:
  • 18% of online adults have had their Social Security Number, credit card, bank account or other important information stolen; and
  • 21% of online adults have seen their email or social networking accounts compromised.
For the MCUL story and more on the data breach report, use the resource links.

CUNA compliance audios are back and even better

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WASHINGTON (4/16/14)--Back by popular demand, Credit Union National Association compliance staff are posting new audio updates on the hottest compliance topics.

The new audio posts are broken into smaller chunks, down from their former 60 to 90 minutes, and will be posted more frequently than before when they were offered on a quarterly basis. The new format allows users to pick and choose the topics they listen to.
 
"We have heard from many in the credit union system over the past year requesting that CUNA's compliance staff bring back the quarterly 'Pressing Issues' conference calls, and we are really happy to do that," CUNA Federal Compliance Counsel Colleen Kelly said.

"However," she added, "many have also told us that as the unprecedented deluge of regulations continues, they rarely have 90 minutes to spare to participate on a scheduled conference call. So, in response, we are rolling out a new format."

The first editions of CUNA's newly formatted audio conference cover:
  • Mortgage lending;
  • The latest National Credit Union Administration developments;
  • The Bank Secrecy Act and the U.S. Treasury Department's Office of Foreign Assets Control; and
  • Other federal regulatory issues.
Printable handouts will also be provided as part of the CUNA programs. Short recordings on other topics will be posted in the coming months.

For the new CUNA resource, use the links (members only).

CFPB extends remittance rule shield

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WASHINGTON (4/16/14)--The Consumer Financial Protection Bureau is proposing a five-year extension to an exception that minimizes for some credit unions and other financial institutions certain information reporting requirements of its international remittance transfer rule.

The proposal will be available for comments for thirty days from the date it is published in the Federal Register . The agency is also proposing several clarifications and technical corrections to the final rule and commentary.

Under the CFPB rule, international remittance transfer providers are generally required to give prepayment and receipt disclosures to the consumer-sender that include the exchange rate, certain fees and taxes associated with a transfer, and the amount of money that will be received on the other end of the transfer.

Remittance transfer providers will also be required to investigate disputes and correct errors. The rule has been in effect since Oct. 28.

The bureau in a release noted that the Dodd-Frank Wall Street Reform Act explicitly allows federally insured financial institutions, like banks and credit unions, to estimate third-party fees and exchange rates when providing remittance transfers to their accountholders for which they cannot determine exact amounts until July 21, 2015. Insured institutions can only use this exception when they cannot determine the exact amounts for reasons beyond their control.

This exception would continue until July 21, 2020, if the proposal is adopted. The CFPB said it moved to extend the exception when institutions reported that current market conditions would make it impossible to know the exact fees and exchange rates associated with a minority of their remittance transfers.

"Without the exemption, these insured institutions report that they would be unable to send some transfers to certain parts of the world that they currently serve," the CFPB noted.

The Credit Union National Association has repeatedly called on the CFPB to use the full authority granted to it in the Dodd-Frank Act to exempt credit unions from the international remittance transfer rule and other regulations.

"When the remittance rule was finalized, several credit unions stopped offering the service to their members," CUNA President/CEO Bill Cheney wrote in a February letter to Congress.

FTC offers free fin. lit. resources

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WASHINGTON (4/16/14)--Credit unions looking for new materials to enhance their focus on consumer financial literacy--now during Financial Literacy Month and beyond--can check out the Federal Trade Commission (FTC) website.

The FTC, in part charged with preventing business practices that are anticompetitive or deceptive or unfair to consumers, has information for everybody--students, young adults, parents, servicemembers on active duty, veterans or grandparents. It covers such financial topics as saving and shopping, credit and debt, buying a home or car, and looking for a job or paying for school.

In Tuesday's release, the FTC noted that all its materials are in the public domain. They can be posted, reprinted, or adapted to educate people about their consumer rights.
 
Use the resource link for articles, videos and blog posts about financial topics.

Yellen's latest hints at new big bank capital, liquidity standards

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WASHINGTON (4/16/14)--There may be room to strengthen capital and liquidity standards for large banks, Federal Reserve Chair Janet Yellen said in remarks made Tuesday.
 
Yellen's comments were broadcast through a video shown at the Federal Reserve Bank of Atlanta's 2014 Financial Markets Conference in Atlanta.
 
Current Liquidity Coverage Ratios (LCR) and Net Stable Funding Ratios (NSFR) do not address financial stability risks associated with so-called matched books of securities financing transactions, Yellen explained.
 
To address securities financing transactions and other residual risks in wholesale funding markets, Yellen said Fed staff is considering requiring firms to hold larger amounts of capital, stable funding, or highly liquid assets based on use of short-term wholesale funding.
 
These changes would likely apply only to the largest, most complex banking organizations, she noted. Other measures, such as minimum margin requirements for repurchase agreements and other securities financing transactions, could be applied to the market as a whole, she noted.
 
"There may be net social gains from introducing further reforms to address short-term wholesale funding risks," Yellen said, adding that the Fed is carefully examining the pros and cons of each option. Meetings like the Financial Markets Conference will be a vital part of the process as the Fed moves forward, Yellen emphasized.
 
For Yellen's full comments, use the resource link.