Three Things You Should Know This Morning

December 15, 2016 at 8:51 am Leave a comment

Yet Another Huge Data Breach.

The Company whose name stands for “Yet Another Hierarchical Officious Oracle” yesterday announced that it has discovered yet another huge data breach.

“Yahoo believes an unauthorized third party, in August 2013, stole data associated with more than one billion user accounts. The company has not been able to identify the intrusion associated with this theft. Yahoo believes this incident is likely distinct from the incident the company disclosed on September 22, 2016” in which a mere 500 million accounts were compromised.“ That’s billion with a B.

Yahoo’s problems underscore yet again why it makes little sense for regulators to pose one set of cyber security standards on financial institutions and another set of lower standards on everyone else. The information pilfered from Yahoo such as passwords, is  ideal for individuals mining for information that can be used to commit identity theft.

The Fed Raises Rates

Just about a year after it raised rates for the first time in a decade, the Federal Reserve Board’s Open Market Committee unanimously voted to   raise the federal funds rate  from a range of 0.25 to 0.5 percent to a range of 0.5 to 0.75 percent. The conventional wisdom is that we can expect additional increases in the coming year which is probably true, but it was conventional wisdom to anticipate multiple rate hikes during 2016.

CUNA TO NCUA: PREMIUMS… WE DON’T NEED NO STINKING PREMIUMS

Following suggestions from the NCUA that credit unions should expect share insurance premiums of between 3 and 6 basis points next year, our good friends at CUNA released an excellent white paper explaining why such a move is unnecessary given the current condition of the industry and the fact that reforms scaling back the size of the corporate system have all but eliminated systemic risk to the fund.

“In light of NCUA’s past successful management of the NCUSIF equity ratio, the prospect of a premium in 2017 is out of character. At the end of September 2016, the Fund’s equity ratio stood at 1.27% of insured shares, up slightly from 1.26% at yearend 2015, but down from 1.29% in 2014.The recent marginal decline in the equity ratio has been caused by healthy growth of insured shares coupled with low earnings resulting from an extended period of very low interest rates. Insurance losses have not been the culprit. In fact, insurance losses have been negative, as excess reserves for losses, expensed during the financial crisis, have been reversed. That process is now about over, removing a positive contributor to net income.”

 

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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