CYBER SECURITY BILL RIPE
FOR DATA SECURITY ADDITIONS
WASHINGTON-NAFCU is calling on congressional leaders to take up the long-sought data security measures as part of a broader cyber security bill debt opening on Capitol Hill.
Among the provisions NAFCU wants added to the cyber security bill that focuses on security of government and military systems, are those that would make entities whose system are breached pay the costs borne by its customers; the creation of national standards for safeguarding data; and requirements for notifications of customers and the public when a data breach has occurred.
The new interest in data breach legislation comes after news of a major breach at card processor Global Payments, which may have exposed millions of credit card accounts to hackers.
Specifically, NAFCU asked that Congress consider adding the following measures to a cyber security bill:
* Payment of Breach Costs by Breached Entities; a requirement that entities to be accountable for costs of data breaches that result on their end, especially when their own negligence is to blame.
* National Standards for Safekeeping Information; that any entity responsible for the storage of consumer data to meet standards similar to those imposed on financial institutions under the Gramm-Leach-Bliley Act.
* Data Security Policy Disclosure; a requirement that merchants post their data security policies at the point of sale if they take sensitive financial data. Such a disclosure requirement would come at little or no cost to the merchant, but would provide an important benefit to the public at large.
* Notification of the Account Servicer; that account servicer or owner be required to include entities such as financial institutions to the list of those to be informed of any compromised personally identifiable information when, associated accounts are involved.
* Enforcement of Prohibition on Data Retention.
OBAMA SEEKS TO PREVENT
RISE IN STUDENT LOAN RATES
WASHINGTON-President Obama called on Congress last week to act soon to prevent a scheduled end to the 3.2% rates on Stafford Loans, which are slated to double to 6.8% July 1.
Legislation passed in 2007 temporarily halved the interest rates for Stafford Loans from 6.8% to 3.2%. If Congress does not act to extend the lower rates by July 1, as many as seven million families could face higher payments.
The move will not only affect millions of credit union borrowers directly but also by setting a market rate for private student loans that are increasingly popular with credit unions and banks.
But Republican House leaders are opposing the President's call so far because of its cost estimate, $6 billion a year. Republican Rep. John Kline of Minnesota, who chairs the House Education and Workforce Committee, said in a statement that he has "serious concerns" about any plan that "kicks the can down the road and creates more uncertainty."
"My colleagues and I are exploring options in hopes of finding a responsible solution that serves borrowers and taxpayers equally well," he said.
GIANT TEXAS FAILURE TEXANS
CU BREAKS INTO THE BLACK
RICHARDSON, Texas-NCUA announced last week that Texans CU, the one-time $2-billion credit union it has operated under conservatorship the past year, reported a $5.9-million net for the first quarter of the year, even as the biggest NCUA conservatorship ever continues with negative equity of $40 million.
The one-time CU for Texas Instruments, which piled up a staggering $225 million in losses from 2008 through 2011 due to bad member business loans, slashed expenses and provisions for loan losses during the past year to emerge from the red, NCUA said.
"For the past year, we reduced expenses, streamlined operations, retooled infrastructure, and began the process of returning Texans to the core credit union business model," said Keith Morton, NCUA Region IV Director and Agent for the Conservator, of the now $1.5-billion credit union. "We see significant progress in all of these areas, and we are very encouraged by the credit union's positive financial results for the first quarter of the year."
Still, the 59-year-old credit union only remains in operations because of a $60-million emergency NCUA loan, which under year-old legislation NCUA is able to count as net worth, giving it a 1.4% net worth ratio.
BEVY OF MERGERS APPROVED
BY NCUA INCLUDE TROUBLED CUS
ALEXANDRIA, Va.-NCUA said it approved another 21 credit union mergers, more than half of which will erase ailing CUs.
Among them are: Webster, Mass.-based Webster FCU's deal for $20-million Filene Employees FCU; Reno, Nevada's Great Basin FCU acquisition of $13-Sparks City Employees FCU and Chicopee, Mass.-based Polish National FCU's merger of $65-million Valleystone FCU in nearby Wilbraham, Mass.
Also, State Employees CU of Maryland, the $2.3-billion credit union in the Baltimore suburb of Linthicum, Md., has been approved to acquire $82-million Ann Arundel County Employees FCU; Connexus CU in Wausau, Wis., was approved to merge $45-million Tower CU in Wausau; and Hermantown (Minn.) FCU was approved to acquire $30-million Metro CU in Superior, Wis.
Other troubled credit unions approved to be merged out include: $7-million Hometown FCU, Quincy, Ill. (into United Community FCU in Quincy); $3-million Madison (Wis.) V.A. Employees CU (into Dane County CU in Madison); $9-East Bay Postal CU in Oakland, Calif. (into Pacific Postal FCU in San Jose).
