Five Issues That Will Shape Your Credit Union Week

March 25, 2019 at 10:00 am Leave a comment

I haven’t done  one of these in a while but I saw so many important issues to bring to your attention that here is a quick rundown. As longtime readers of the blog know any one of these issues could be the basis for an expanded blog in the future.

How Do You Protect Your At Rest Data?

I’m more than a little surprised that there isn’t more outrage out there stemming from the disclosure that hundreds of millions of Facebook users had their account passwords stored “in plain text and searchable” format  as far back as 2012. This information could be accessed by thousands of Facebook employees.

When New York implemented its cybersecurity regulations, one of the most hotly debated issues was what measures  institutions holding personally identifiable information had to take to make sure it was protected.  While there was broad agreement that information in transit – such as an attachment to an email – should be encrypted,  many institutions argued that it wasn’t necessary or cost-effective to mandate the encryption of data “at rest” provided it was protected by a firewall.

NY 23 NYCRR 500.15 effectively splits the difference. It provides that personal information should be encrypted even at rest unless doing so isn’t feasible and an  institution uses alternative controls yo protect the data. This determination should be based on an individual risk assessment which makes sense since what is feasible for a state chartered credit union isn’t the same as what is feasible   for an entity of the size and sophistication of Facebook.

According to Facebook, there’s no evidence that the information has been misused but in reality  we won’t know that for sure for several years. Besides, even if not a single password was misused, Facebook’s inexcusably incompetent handling of member data is yet another textbook example of why Congress has to act to establish national baseline cybersecurity standard.

Prepaid Card Regulations Effective April 1st

This is just a quick reminder that on April 1st regulations providing consumer protections and imposing disclosure requirements on the issuers of prepaid reloadable cards take effect on April 1st. you can be forgiven for not realizing that these regulations shortly take effect as their effective date has been changed on more than one occasion. Even if your credit union doesn’t offer prepaid cards today, I would certainly familiarize yourself with these requirements. My guess is more and more institutions will start offering prepaid cards in the coming years.

Credit Union Employee Complains of Harassment at GAC

In one of the highest profile criticisms of the credit union industry since the #metoo movement gained steam, Rachel Pross, Chief Risk Officer at MAPS Credit Union in Oregon, has posted a blog detailing inappropriate conduct by attendees at CUNA’s recently ended Governmental Affairs Conference and calling on the industry to do a better job of confronting  harassing behavior: “I would argue that our industry needs to be even more aware and react more swiftly when bad behavior is demonstrated, because we can’t tout our family oriented, not-for-profit, feel-good, opposite-of-Wall-Street, altruistic, people-oriented nature and then behave just like everyone else.”

New York State Budget

The New York State budget is due April 1st and according to Governor Cuomo the parties remain far apart on key issues even though the Senate and Assembly are both controlled by democrats now. Just how far apart? Well, Budget Director Robert Mujica told reporters a couple of weeks ago that an on time budget was virtually impossible and another top aide to the Governor has called an on time budget fantasy.

Why does this matter to credit unions? With marijuana legalization reportedly out of budget negotiations at this point, there aren’t too many issues that will have a direct impact on credit unions when the budget is finalized. But the sooner the budget is resolved, the sooner the focus of the legislative activity will shift to legislative issues including those that are so important to credit unions. Let’s hope that the legislature and Governor put the budget to bed.

What Direction is the Economy Going in?

In truth, no one knows the answer to that question. One sure sign of danger though is that the dreaded inverted yield curve occurred on Friday, scaring the bejeebees out of Wall Street in helping to trigger a sharp decline in stock prices. The yield curve made its appearance just two days after the Fed announced that it does not plan on raising interest rates any time soon. In fact, the Wall Street Journal is reporting this morning that investors increasingly feel that a rate cut is more likely than a rate rise later in the year.

Entry filed under: Compliance. Tags: , , , , .

Time to Clamp Down on Mortgage Lending Standards?

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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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