Data Breaches Affect Credit Unions More Compared to Large Banks

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://www.financialbuzz.com/data-breaches-affect-credit-unions-more-compared-to-large-banks-technology-201894

The breach of data at retailers like Staples (NASDAQ: SPLS),Target (NYSE:
TGT) and Home Depot (NYSE: HD) have a crippling effect on the member
services of the credit unions, as per the opinion voiced by Jim Nussle, the
Chief Executive Officer of Credit Union National Association.

Context

According to Nussle, the expense of ensuring the privacy of customers post
breaches is the responsibility of non-profit financial institutions. He
said that breach in data is one of two very important issues that his
organization wants to bring to the attention of Congress. The industry will
pay first and subsequently wait to be reimbursed. The situation must change
for smaller organizations like community banks and credit unions. Both
Nussle and the Chief Executive Officer of Mountain West Credit Union
Association, Scott Earl agreed that there can be a serious constituent
impact. Earl is also the President of the Association.

Nussle added that he had previously spoken to credit union CEO whose
organization was forced to reissue its cards three times in 2014. He
believes that hackers must have targeted customers who had shopped at Jimmy
John, Home Depot and Target on the same day.

Hard expenses

According to Earl, issues with breach of data can involve serious cost. He
said that his organization has not found a method to recoup costs within
the time and to deal with the breaches to protect members. Such expenses
are funneled out of funds, which can be utilized to offer services to its
members.

The Desert School Credit Union, in 2013, was forced to reissue about 40,000
credit and ATM cards after a data breach, as admitted by Kathy Graham, the
Union's Vice President of Marketing. The expense was not the substitution
of credit cards, but the amount of money lost in fraudulent activity and
the quantum of money that was lost in reimbursing its clients. According to
Graham, the Desert Schools subsequently took a proactive approach, and soon
deployed a number of newer technologies to monitor the accounts. When these
systems came in place, the data breaches, which occurred in 2014 required
much fewer cards to be reissued.

CUNA, which claims to represent almost 90 percent of total US credit unions
numbering almost 6,700, has plans to push the issue to the Congress and
also seek the legislation to protect the values of members. The Dodd-Frank
legislation also impacts the credit unions.

_______________________________________________
Dataloss Mailing List (dataloss () datalossdb org)
Archived at http://seclists.org/dataloss/
Unsubscribe at http://lists.osvdb.org/mailman/listinfo/dataloss
For inquiries regarding use or licensing of data, e-mail
        sales () riskbasedsecurity com 

Supporters:

Risk Based Security (http://www.riskbasedsecurity.com/)
YourCISO is an affordable SaaS solution that provides a comprehensive information security program that ensures focus 
on the right security.  If you need security help or want to provide real risk reduction for your clients contact us!