The president of the washington Credit Union League is blasting the major credit card associations for hiding security breaches, and calling on CUNA Mutual to take the lead in pressing for credit unions to be reimbursed for all related costs.
John Annaloro, president of the Washington CU League, has sent a terse letter to the CEOs of VISA and Master Card International criticizing them "for sitting on the information regarding the massive security breach for weeks" without informing financial institutions.
"Stone-walling exposed 40 million consumers to greater financial risks," said Annaloro in the letter. "There was no ability for card issuing credit unions to help with fraud prevention in the publics' behalf. Millions of consumers have been exposed to potential problems far longer than necessary."
In a separate letter to CUNA Mutual Group, Annaloro formally requested that the company take a leading role in seeking a financial recovery for credit unions' related losses.
Annaloro blasted the two card associations for providing information to the press and the public before financial institutions. In many cases credit unions learned of the problem through calls from members. "It is the financial institution that bears the burden of the consumer interface, card reissuance, and expensive ongoing monitoring for fraudulent activity," said Annaloro. "This failure to timely inform institutional partners is an unconscionable breach of appropriate business behavior as well as a display of shifting fiduciary responsibility."
In his letter to CUNA Mutual CEO Jeff Post, Annaloro suggested CMG, "Track and aggregate all of the losses from the national credit union system, on our collective behalf, and seek appropriate damage recoveries for all credit unions."
It was also noted that CMG has the proper standing for this type of action in the courts, and that such actions would be similar to what was done after the million dollar losses by credit unions following the BJ Wholesalers incident.
