January 22, 2014
Wednesday's Edition
La Pine meets with Rep. Bachus, first credit union data breach numbers are out

After more than 930 credit unions responded to CUNA data breach survey, it is estimated that credit unions across the country have incurred between $25 million and $30 million in costs just associated with this data breach.

Alabama and Florida credit unions that responded to the survey say that nearly 350,000 cards were breached and that totals an estimated $1.8 million in total costs. Breaking it down further, Alabama credit unions have seen 80,000 cards affected for a total of $400,000 in costs. Florida credit unions are among the hardest hit with more than 270,000 cards affected for $1.4 million in costs. These are early estimates that will surely rise over the next few weeks.

LSCU & Affiliates President/CEO Patrick La Pine met with Rep. Spencer Bachus (R-AL) in Birmingham on Monday. The Target data breach was one of the major topics discussed. La Pine says it was a good meeting that sets up a larger conversation next month. 

"Rep. Bachus was very open to our perspective on the data breach. We had a good conversation with lots of questions. He will want to know more about the breach from credit unions at next month's CUNA GAC," says La Pine. 

If your credit union has not filled out the CUNA survey, it is still open. Visit the CUNA website to get started. These numbers incurred by credit unions will be very important to lawmakers and the media. 

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Ala. and Fla. Crash this year's GAC

Kyndle Huey, AVP, marketing & communications at America's First Federal Credit Union in Alabama and Remi Lukosiunas, financial analyst at PBC Credit Union in Florida, have been selected as young professional representative to "crash" and attend the 2014 CUNA Government Affairs Conference (GAC) in Washington D.C., Feb. 23-27.

CUNA and the Cooperative Trust, a young professionals group through the Filene Research Institute, have partnered with state leagues to choose up to 51 young credit union professionals from each state and D.C. to take part in the Crash event. In addition to the core schedule of GAC events, crashers will attend exclusive speaker sessions, and explore opportunities for young adults to help promote credit unions locally and nationally.

More information about the GAC can be found on CUNA's website. Details about the Crash the GAC can be found on the event's website and see the Cooperative Trust's website to stay informed on future Crash opportunities.

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Washington wire

Data security hearings and legislation on the horizon
As the number of consumers affected by the Target and Neiman-Marcus data breaches continues to grow, so does the attention that Congress is giving to the issue of data security. Earlier this month, CUNA and the League called on the Senate Banking Committee and the House Financial Services Committee to hold hearings on the issue. While CUNA’s letters were focused on the committees that have jurisdiction over credit unions, several committees have some form of jurisdiction over data security. In fact, the jurisdictional overlap is one of the challenges proponents of data security legislation have had difficulty overcoming in recent years. In the coming weeks, CUNA and the League expect multiple committees to hold hearings on the data breaches.

CUNA and the League also expect a number of bills to be introduced on data security in the near future. The first of these bills was introduced last week by Senators Carper (D-DE) and Blunt (R-MO). The Carper-Blunt bill (S. 1927) would expand breach notification requirements to all U.S. businesses without imposing new requirements on financial institutions subject to Gramm-Leach-Bliley Act data protection measures. This legislation is similar to legislation the Senators have introduced in recent years. It is a good first step in terms of securing data, but it does not address other critical issues like reimbursement of credit unions for expenses related to merchant data breaches or the ability of credit unions to identify the source of a breach when it is known and would not adversely affect an investigation. CUNA and the League continue to work with Congress on the development of legislation on this issue, and expect additional legislation will be introduced in the coming weeks.

Cyber Security Legislation Moves Forward
Last week, the House Committee on Homeland Security marked up and approved the National Cybersecurity and Critical Infrastructure Protection Act (H.R. 3696). Prior to the mark-up CUNA and the League joined several other trade groups in a letter to leadership of the House Committee on Homeland Security to express appreciation for introducing H.R. 3696. The bill has several provisions: strengthening the existing mechanisms such as the Financial Services Sector Coordinating Council (FSSCC) and the Financial Services Information Sharing and Analysis Center (FS-ISAC), improving the provisioning of security clearances for those involved in cybersecurity information sharing and expanding the existing Support Anti-Terrorism by Fostering Effective Technologies Act (SAFETY Act) to provide important legal liability protections for providers and users of certified cybersecurity technology in the event of a qualified Cybersecurity incident.

Click here to view the complete legislative update. 

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Alabama update

LSCU introduces legislation to update the Alabama State Credit Union Act
This week the League introduced legislation to update the Alabama State Credit Union Act in an effort to modernize outdated language existing in the act and to allow state chartered credit unions an easier path to conduct business in the state. The bills, SB 212 by Sen. Slade Blackwell (R-Mountain Brook) and HB 165 by Rep. Greg Wren (R-Montgomery), have been assigned to the Senate Banking & Insurance Committee and the House Financial Services Committee, respectively. 

Because this is an election year and the legislative session is expected to end early in April so current members can begin campaigning, it is important that these bills are heard in committee as soon as possible. The League is working with both committees to have these bills heard as early as next week.  Some of the proposed changes include strengthening of the limited liability language for credit union board members, protection for credit unions for accounts established by minors, allow for reasonable insurance coverage and reimbursement of expenses for board members, provide penalties for the fraudulent use of the term “credit union,” and increase the dollar value protection for credit unions with accounts of deceased members.

The GA team will continue to keep you updated on the movement of this legislation and be ready for an Action Alert on these bills early next week.

This Week in the Legislature
The Legislature convened for the 2014 Legislative Session on Tuesday of this week and began the session with a three-day work week. The first two days, due to procedural rules, could only see the introduction of bills and the second readings of bills passed out of committee on Wednesday morning.

On Thursday the House took up legislation related to the Republican Commonsense Conservative Agenda and passed all of these bills just before lunch and promptly adjourned. Some of the bills passed included toughening restrictions on legislators who resign or do not seek re-election in order to become lobbyists, allowing the Department of Revenue to not seek tax payments if the cost exceeded the payment in question, raising the threshold for advance sales tax payments on small businesses from $1,000 to $2,500, and creating an independent agency to oversee taxpayer disputes.

The Alabama Senate also passed legislation on Thursday. The same legislation for legislators wanting to become lobbyists was brought up, but delayed action in order to give members time to look at possible amendments. They did pass the identical legislation for the threshold for the prepayment of sales taxes on small businesses. The House will reconvene at 1:00 p.m. and the Senate will reconvene at 2:00 p.m. on Tuesday, Jan. 21 .

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FCUA hires new contract lobbying firm

The FCUA has added Floridian Partners, LLC to the association’s advocacy team. This move comes after longtime contract lobbyists Mercer Fearington and Clark Smith withdrew as lobbyists for the firm they launched and registered for Southern Strategy Group, effectively conflicting them out of representing credit unions as Southern Strategy Group represents a bank. The FCUA governmental affairs team is excited about the new partnership with effective professionals at Floridian Partners and eager to continue moving the credit union legislative agenda forward. Floridian Partners was chosen after an extensive review, including face-to-face interviews, of several of Florida’s top firms and is based in Tallahassee with offices also located in Miami, Ft. Lauderdale, and Tampa. The firm, and its 12 members, specializes in a wide-range of services including outreach and public advocacy, strategic campaign development, grassroots and grassroots coalition building, earned media, and paid media.

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CDFI Certification webinar Jan. 28

If your credit union serves predominantly low income consumers and financially underserved communities make plans to attend the "CDFI Certification: The next step for Low Income Designated Credit Unions" webinar on Jan. 28, 2014 at 2 p.m. EST. 

Attendees will: 

  • Gain a deeper understanding of the values and benefits the CDFI certification can bring to your operation
  • Learn about the expertise and resources available to help you accurately and efficiently complete your CDFI certification package 
  • Find out more details about the Technical Assistance Grant (TAG) funding round NCUA will open up from Feb. 3 to the 14, which for the first time has a category specific to credit unions in need of financial assistance to help pay for their CDFI certification work

Click here to register!

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In This Issue
Wednesday's Edition
La Pine meets with Rep. Bachus, first credit union data breach numbers are out
Ala. and Fla. Crash this year's GAC
Washington wire
Alabama update
FCUA hires new contract lobbying firm
CDFI Certification webinar Jan. 28
LSCU & Affiliates Media

President's Quarterly Report
LSCU & Affiliates President/CEO Patrick La Pine looks at the League's activities for the fourth quarter which includes an office move in Tallahassee, a new LEVERAGE hire and an update on tax reform.

Tax Reform's New Message
The House is continuing to push tax reform, just in a different way.

Upcoming Event Deadlines
Jan. 28 Last day to receive "early bird" rate for Small Asset Size Conference - Orlando, Ft. Lauderdale, Birmingham
Feb 10 Last day to receive “early bird” rate for FCUA State GAC – Tallahassee, FL
Feb 11 Last day to receive “early bird” rate for Security & Robbery Training – Tallahassee, FL
Feb 18 Last day to receive “early bird” rate for IRA Essentials & Advanced Training – Birmingham, AL
Upcoming League Events
TODAY Loan Member Has Died: Now What?
Jan. 23 Consumer Loan Portfolio Grading
Jan. 28 Reg CC Funds Availability & More
Jan. 29 Compliance & BSA for SR Mgmt-Board
Jan. 30 What is Personal Tax Return Telling Me?
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