Heartland Settles Suit Over Data Breach
PRINCETON, N.J.-Heartland Payment Systems reported it has reached a settlement in a class action lawsuit over a data breach.
Lawsuits in the case were consolidated in the U.S. District Court for the Southern District of Texas, with settlements ranging from $1 million to $2.4 million. The breaches occurred between Dec. 6, 2007 and Dec. 21, 2008.
Credit card processor Heartland has agreed to pay the amount to class members in the lawsuit who submit valid claims for losses as a result of the intrusion, and further agreed to pay all costs tied to the administration of the settlement-including up to $1.5 million for the cost of notice to the settling class-and up to $760,000 of the class action members' attorneys' costs.
In addition, Heartland said it will submit the report of an independent expert on the company's actions and plans to enhance the security of its computer systems.
CU Offers 'Furlough Loans' To State Employees
WETHERSFIELD, Conn.-Connecticut Labor Department FCU has begun offering "furlough loans" to members who are state employees. Due to budget shortfalls, the state of Connecticut is mandating that all state employees take four days without pay. Loans have a term through Jan. 31, 2010, at an APR of 6.99%. "This helps our membership manage their budget for the decreased income as a result of the furlough," said Marie Kinard, credit union CEO, "particularly through the yearend holiday season."
Comments On FOM Rule Change Due March 1
WASHINGTON-Credit union stakeholders have until March 1 to file comments with NCUA on the agency's proposed changes to its chartering and field of membership rules.
The proposal was first announced at NCUA's Dec. 17 meeting. The goal of the changes, NCUA Chairman Debbie Matz said, are to establish objective, quantitative guidelines defining what exactly is a "well-defined community." NCUA is also seeking comment on whether underserved areas should continue to qualify as "well-defined communities." NAFCU has asked its members to sound off on the proposal by Feb. 5 so the trade group can take its members' positions into account in its own comment letter on the rule. Similarly, CUNA has asked its members to send comments to it by Feb. 10.
More CDFIs Gain Access To Funds
WASHINGTON-Non-federally insured institutions, including state-chartered CUs, that have been certified as CDFI's by the U.S. Treasury's CDFI Fund are now eligible to become Federal Home Loan Banks under a final rule that will take effect near the end of this month. The rule, crafted by the Federal Housing Finance Agency, implements a section of the Housing and Economic Recovery Act passed in 2008. Eligible CDFIs include community development loan funds, some venture capital funds and state-chartered CUs that do not have federal insurance.
Treasury No Longer Backstops GSEs
WASHINGTON-The start of the New Year meant the end of a U.S. Treasury short-term credit facility as well as the end of a GSE mortgage-purchasing program. The Treasury ceased purchasing mortgage-backed securities from Fannie Mae, Freddie Mac and FHLBs on Dec. 31. The government agency bought about $220 billion in assets from those entities. The Treasury also shuttered a credit facility designed to provide a backstop of liquidity for GSEs that had gone unused. While Fannie and Freddie will remain in conservatorship, the Treasury is amending its preferred stock purchase agreement with both entites to allow its funding commitment to "increase as necessary" to prevent net worth erosion over the next three years. This effectively removes the $200 billion limit set in the original agreement and allows both GSEs to lose an unlimited amount of money and leave taxpayers on the hook for the losses, despite the fact that both institutions are nowhere close to the established limit yet. New guidelines on the government's role in the housing market are expected to be released with the 2011 budget outline in February.
SECU Accts Exposed In Scheme
RALEIGH, N.C.-The accounts of more than 300 people were exposed as the result of a skimming scam directed against State Employees CU. In such scams, skimming devices record data from the magnetic strips on the back of financial cards which is sthen used to create counterfeit cards.
The credit union reported the first member calls of concern began coming in on Christmas day. Police believe data was skimmed from debit cards at a gas station. Gas pumps typically have the skimming device hidden inside and are nearly impossible to detect.
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