Posts tagged ‘NFL’

Cybersecurity, Escrow, Conversions and Football Highlight a Busy Few Days

DFS Issues Cybersecurity Risk Alert

In a depressing sign of the times, New York’s Department of Financial Services has issued a cybersecurity risk alert informing credit unions that, given the recent assassination of Soleimani and Iran’s demonstrated capabilities and willingness to engage in cyberattacks against financial institutions, “US entities should prepare for the possibility of cyberattacks.”

DFS points out that in 2012 and 2013; Iranian sponsored hackers launched denial of service attacks against US banks. Consequently, it “strongly recommends that all regulated entities heighten their vigilance against cyberattacks.”

Another Credit Union Converts

Hudson Heritage Federal Credit Union has officially announced its conversion to a state charter. Regardless of whether or not a conversion is in your credit union’s plans, it is great to see DFS take the steps to make the state charter a viable option for credit unions, and banks for that matter and credit unions respond positively to these developments. Remember, a viable state charter is in everyone’s interest.

Are You Prepared for Life Without Interest on Your Mortgage Escrow Accounts?

States like New York and California have long had laws mandating that financial institutions pay interest on mortgage escrow accounts, but prior to the Dodd-Frank Act, it was settled law that these state mandates could not be applied to federally chartered institutions. That is changing.

First, let me stress that if you are a federally chartered credit union not currently providing escrow interest, you are currently under no obligation to do so. That being said, however, the signs are mounting that this privilege may not last much longer, and I do think it is worth a bit of your time to start assessing the financial impact that this change will have on your credit union.

Why so glum? As I previously blogged, a lawsuit that came about after Dodd-Frank argued that preemption of escrow accounts no longer applied to federally chartered institutions. As a result, the bank in question was violating the law by refusing to pay interest to the disgruntled plaintiffs. California’s escrow requirement is very similar to New York’s. On Thursday, this lawsuit was settled with Bank of America agreeing to pay $35 million in damages to the plaintiff class, led by Donald Lusnak (subscription to Law360 required). Additionally, it has already started paying mortgage escrow.

This is all happening as a similar lawsuit; Hymes v. Bank of America, is being litigated in New York State Federal Court.

Why Can’t We Use Technology to Figure Out When a Football Crosses the Goal Line?

This is the great question I was pondering this past weekend as I was watching one of the four playoff games, in which the refs were being forced to determine if a running back managed to get the ball over the goal line while maintaining control as he was being assaulted by a group of freakishly fast, oversized athletes. Frankly, if soccer can figure out within less than an inch whether a goal has been scored, and tennis uses similar technology to tell if the ball is in or out, why can’t the NFL do the same?

Just wondering. Enjoy your day.

January 7, 2020 at 9:19 am 1 comment

What The NFL Can Teach Us About Financial Education

Recently, a veritable who’s who of current and former NFL players including former Baltimore linebacker Ray Lewis and former wide receiver and legendary big-mouth Terrell Owens filed a suit seeking to blame BB&T Bank for the loss of nearly $60 million.  According to the article, the players are contending that the bank should have realized that their money was being taken out of their accounts without their permission by a former financial advisor who was recently banned from providing representation to players.  At least when these players lose their money, some of them can get jobs with one of scores of cable sports networks, which I have come to believe are nothing more than employment services for ex-NFL athletes.  (It amazes me that you’re not really qualified to be an analyst unless you spend about a decade getting and giving concussions, but I digress).

Even without knowing all the facts about the case, the plight that the NFL players find themselves in is yet another example of why we need better financial education in this country.  Of course, most people don’t make millions playing football, but that just means that taking charge of their financial obligations and properly managing the money they do have is all the more important.  For example, one of the most counter intuitive but important concepts behind banking is that when you deposit your money in a financial institution, that financial institution is taking on nothing more or less than the obligation to transfer money in and out of that account at the request of the account holder.  In other words, a credit union is not a fiduciary of a member’s funds.  A bank account is no more than a creditor/debtor relationship.

Very few people disagree with the potential value of financial education, at least in theory.  But five years after the financial crisis, New York and many other states have yet to incorporate basic financial literacy into the every day curriculum of elementary and secondary school students.  There are two basic reasons for this lack of action.  First, it is argued that schools are already loaded down with mandated standardized tests and curriculum.  New York, like the vast majority of states in this country, has introduced a common core curriculum.  Second, while everyone is in favor of greater financial literacy, it’s not clear how to most effectively provide it.  For example, one recent research paper estimated that most financial education has a deminimus impact on consumer decision-making.

While these arguments are attractive, they’re ultimately excuses for inaction.  There is something wrong with an education system that cannot incorporate financial literacy into various parts of the curriculum more effectively than it has.  There may not be enough time in the day to make financial literacy a mandatory stand alone class, but we should have the pedagogical creativity to sprinkle financial lessons throughout the curriculum.  As for studies questioning the value of financial literacy, let’s not let researched results take the place of common sense.  If we start early enough and teach it often enough, we can create a baseline financial literacy that currently does not exist in this country.  My personal goal isn’t to make sure that people know all the answers but that they know what questions to ask before setting up a bank account, getting a car loan or their first mortgage.  The reality is that there is only so much that credit unions and other financial institutions can do to educate a new member about the risks and rewards of financial management if it is the fist time they are thinking about their money.

November 4, 2013 at 7:51 am 1 comment

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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