Three Things You Should Know On A Beautiful Thursday Morning

August 2, 2018 at 9:32 am Leave a comment

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Cyber Mortgage Fraud Continues to Surge

With apologies to those of you who consistently read my blog, this morning once again highlighting the dangers that email and other online activities posed to your credit union. I know I’ve touched on this theme a lot lately but that is because that this is among the biggest issues that affect all credit unions irrespective of their size.

In this excellent article in this morning’s American Banker, the paper points out that “Verifying identities continues to be a tricky proposition for banks as cybercriminals diversify and increase their attacks — especially when it comes to wire transactions.” The key point is that these attacks can be as useful against smaller to medium size credit unions as they can be against larger banks.

In July the FBI issued this updated public service announcement in which it noted that between December 2016 and May 2018 there has been a 136% increase in identified loses caused by compromised business emails. These compromises involved both small and large businesses.

Furthermore, mortgage lending is a particularly favorite target right now. According to the FBI, virtually every stage and participant in the mortgage process is being targeted ranging from real estate attorneys, title insurers, lenders and of course the homebuyer.

All of this underscores the need to take steps to mitigate inevitable losses. In an upcoming blog I will be talking about some important cases evaluating cybersecurity insurance and its limits.

NCUA Board Meeting

There’s a lot to pay attention to at today’s NCUA board meeting. Most importantly, NCUA is going to be proposing raising the threshold for credit unions to be subject to the Risk Based Capital requirement from $100 to $500 million. NCUA will also be proposing delaying the effective date for the new rule.

What the Mets Can Teach You About How Not To Manage Your Business

One of the books that anyone in any business should read is Thinking Fast and Slow, a memoir by Daniel Kahneman who is considered the father of behavioral economics.

One of the things he points out is that businesses and people tend to overvalue what they own, often to their detriment. For example, you show me someone with a “For Sale by Owner” sign up in their front yard and I’ll show you someone who insists they can get at least $30,000 more for their house than the seasoned real estate broker they talked to said they could. Another more practical example: Has your credit union ever been a little slow in starting collection  or foreclosures actions because of its  sentimental attachment to the borrower or an unwillingness to admit that the  underwriting was wrong?

What does this have to do with the Mets? On Tuesday, the New York Mets could have traded three of their starting pitchers and replenished their entire Minor League system. Instead they turned down amazing offers including reportedly from the Yankees. That night they lost 25-4. I’m glad I’m not a Met fan.

Entry filed under: General, Mortgage Lending, technology. Tags: , , .

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Authored By:

Henry Meier, Esq., Senior Vice President, 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. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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