PHOENIX and INDIANAPOLIS (1/13/15)--Regional and national credit union leaders continue to spread the word that data breaches are negatively affecting credit unions and other financial institutions.
Locally, credit unions are still fighting for their members when fraudulent activity occurs.
During the Western States Summit Roundtable recently, Jim Nussle, president/CEO of the Credit Union National Association, explained to the Phoenix Business Journal that the cost to maintain a member's privacy in the wake of a breach is shouldered by financial institutions.
The summit was sponsored by CO-OP Financial Services and CU Direct Corp.
"Data breaches are one of the two most important issues we want to bring to Congress' attention," Nussle told the Phoenix Business Journal (Jan. 11). "We have to pay first and then wait to see how we're going to get reimbursed. This needs to change for small organizations like credit unions and for community banks, too."
CUNA has been at the forefront of raising the issue to Congress that merchants must be held to the same strict payment data security standards required of financial institutions. (See related stories: President announces 30-day data breach notification bill; Obama cites CUs' programs for ID theft protection.)
Scott Earl, president/CEO of the Mountain West Credit Union Association, agreed with Nussle, and added that breaches also greatly affect members and consumers.
"We're not seeing a way to recoup the costs in time and expense for dealing with breaches to protect our members," Earl told the Business Journal. "Those costs come out of funds we can use to provide member services."
Despite these costs, individual credit unions continue to go to bat for their members.
After being forced to reissue 40,000 ATM and credit cards in the aftermath of a major breach in 2013, Desert Schools FCU, Phoenix, with $3.8 billion in assets, adopted new technology to monitor accounts.
With the new system in place, the credit union reported that breaches that took place in 2014 resulted in far fewer card replacements.
Meanwhile, a columnist for The Indianapolis Star recently lauded his credit union for the extra mile it went to help him deal with the theft of his payment card information.
Unsure of how his information was swiped--columnist Tim Evans guessed someone with a card reader had targeted his wallet--Evans learned that his debit card was being used illegally in Michigan.
"Here's where I offer kudos to the folks at my credit union," Evans wrote (The Indianapolis Star Jan. 12). "They have someone who watches debit card transactions tied to their accounts like a hawk. And (after the illegal payments), they didn't have to wipe the slate clean, but they did."