OCTOBER 3, 2014
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Scott Data Breach, Reg Relief Discussion with U.S. Congressman Austin Scott
(Issue 1 of 6)

Representatives from four Georgia credit unions met with U.S. Rep. Austin Scott to discuss the impact of data breaches on credit unions and to share their concerns about regulatory burdens.

  State Legislators Already in the Swing for Session (Issue 2 of 6)
The next session of the Georgia Legislature begins in January, but lawmakers last month held hearings on a range of topics; those of interest to credit unions included tax reform, motor vehicles and mold and mildew issues.

  Credit Union Involvement in the Midterm Elections (Issue 3 of 6)
Credit union political action committees are heavily engaged to support candidates who support credit unions, and more such efforts are still to come as the midterm elections draw nearer.

  Save the Date: Grassroots Academy (Issue 4 of 6)
Want to know more about how the political process in Georgia works, and how to make it work for the CU industry? Make plans to attend GCUA's annual Grassroots Academy, scheduled for Jan. 27, 2015.

  Have You Seen GoBank? (Issue 5 of 6)
Retail giant Wal-Mart is rolling out a low-fee (or no-fee) financial-service venture called GoBank, aimed at people with no access to traditional banking and with weak credit.

  Lawsuits Start Against Home Depot (Issue 6 of 6)
The Atlanta Business Chronicle reported that at least a dozen federal lawsuits have been filed against Home Depot, seeking compensation for losses allegedly caused by a recent data breach involving the Atlanta-based company.

Data Breach, Reg Relief Discussion with U.S. Congressman Austin Scott (Issue 1 of 6)
From left: Jerry Jordan, CGR CU; Christina O’Brien, Robins FCU; Dee Dee Côté, Robins FCU; Cheryl Spires, Combined Employees CU; U.S. Congressman Austin Scott; Roy Bibb, MidSouth Community FCU; Cindy Connelly, GCUA

Target, P.F. Chang’s, Jimmy John’s, Home Depot. The list of large merchant data breaches has grown, and as credit unions are painfully aware, the fraud and expenses are on the rise. To urge Washington to seek remedies, Georgia credit union leaders took the opportunity on September 25th to sit down with U.S. Congressman Austin Scott (R-8) to discuss the financial impact credit unions face with these merchant data breaches.

While this was a key talking point at the Hike the Hill in Congress this month, these Georgia credit unions seized the opportunity to reemphasize the industry outrage, and encouraged Rep. Scott to place the same data security standards on merchants as are on financial institutions to protect against these types of breaches. In addition, the group took time to share on the regulatory burden being placed on financial institutions by CFPB and other regulatory bodies. Our thanks to CGR Credit Union, Combined Employees Credit Union, MidSouth Community Federal Credit Union and Robins Federal Credit Union for sharing their time and insight with the Congressman; your perspective helped put a face on this issue.

Want to share your perspective?  All credit unions are encouraged to do two things: 

  1. Participate in the Home Depot Data Breach Survey by October 24th.  This information will be vital in speaking with all members of Congress, and instrumental in illustrating the financial impact of the breachPlease take the survey here.
  2. Reach out to your members of Congress with the Call to Action. Go to www.stopthedatabreaches.com today to send a message to your elected officials, and ask your staff and board to take action on the site to send a message also.
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Georgia CapitolState Legislators Already
in the Swing for Session
(Issue 2 of 6)

The state Legislative Session does not begin until January 12th. However, based on the hearing schedule, one would presume it is in full swing with the multitude of hearings in September. While the topics of these were as far-reaching as medical marijuana to transportation, hearings monitored closely for credit union interests included:

  • Tax Reform: On September 26th a subcommittee of the Senate Finance Committee heard testimony on avenues to shift Georgia to a consumption-based tax system. Tax-reform attempts are monitored closely to ensure that what is being sought would not impact the credit union income tax exemption. Attempts to shift to a consumption-based system (as opposed to income tax) are watched as some versions would draw in taxing financial services in the broadening of the base, and any and all exemptions would be scrutinized. The committee will hold additional meetings before the start of the session; stay tuned!
  • Motor Vehicles: On September 9th a House Motor Vehicles Study Committee discussed (among other items) automatic ignition cutoff devices. While the hearing was focused on DUIs, this legislative issue is monitored to protect credit union second-chance auto lending programs that utilize starter interrupters. The concept of auto loans with a GPS and an ignition cutoff device is drawing the attention of media; on September 24th The New York Times highlighted the use of starter interrupters in lending, showcasing negative situations where people had their cars disabled at moments of need or in sketchy neighborhoods.
  • Mold and Mildew: on September 18th a Senate Study Committee met to discuss mold and mildew issues in apartments, homes and abandoned properties. Why would credit unions care about mold? Often, the devil is “in the details” with any bill, and legislation that draws in property also draws in foreclosed homes, which are vehicles for those who seek to set up barriers to foreclosing in Georgia.
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Credit Union Involvement in the Midterm Elections (Issue 3 of 6)

The 2014 election season is in full swing; the commercials haven’t stopped, the yard signs are out, bumper stickers are plastered from coast to coast, and credit union advocates have been busy ensuring that the industry-friendly candidates have support. Nationwide, credit union involvement in the 2014 midterm elections is shaping up to be the biggest yet:

  • CULAC, CUNA’s federal political action committee (PAC) has contributed more than $2.7 million to pro-credit union candidates, and CULAC ranks among the top 10 PACs in the nation. When the final ballot is cast on Nov. 4, credit unions through CULAC, CUNA and the Leagues will have spent nearly $6 million and directly contacted hundreds of thousands of voters nationwide in a combined effort to elect a pro-credit union majority in Congress.
  • From a state-level perspective, Georgia credit unions have been out in support of candidates for state-level office through the state level PAC (GA CUPAC). There have been almost 100 fundraiser events attended by GCUA and/or credit union leaders since the start of 2014, with more than $76,000 donated to more than 100 candidates, parties and caucuses on behalf of credit unions. All of this effort and energy is to help support credit union supporters, promote and protect the industry, and reinforce the credit union position.

Vote buttonsWhat’s next? Nationwide, at least a dozen candidates in key targeted federal races will benefit from a nearly $3 million investment in CULAC-funded independent expenditures, such as TV, radio, direct mail or digital advertising, and partisan communications, where CUNA, leagues, and credit unions contact credit union members directly encouraging a vote for the credit union candidate. Georgia credit unions will remember this type of effort that was visible supporting key races in the primary and primary runoff.

Credit unions are getting out the vote in a nonpartisan manner also (for Georgia credit unions, with ElectionWatch), and credit unions around the state continue to reach out to candidates to grow the connections for the industry. Take advantage of opportunities to connect with legislators, and share ElectionWatch with your team and membership – with 2 million members in the state, credit unions can bring “out the vote” in a meaningful way!

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Grassroots AcademySave the Date: Grassroots Academy (Issue 4 of 6)

Make plans now, because it will be here soon: the Grassroots Academy is set for January 27th, 2015. Interested in learning what legislation may impact your credit union? What your credit union can do to shape issues before it they become law (and a compliance burden)? Who the power players are and what is important to them? Perspectives of those who swim in the political pool? Then this day is for you! Save the date for this always different, sometimes unpredictable and always packed day of legislative, political and grassroots insight. Watch for registration details soon.

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GoBankHave You Seen GoBank? (Issue 5 of 6)

While Wal-Mart has had its proverbial toes in the financial water for some time, they are rolling out a new initiative by the end of October: GoBank – for “people who are fed up with big banks and their big fees.” No overdraft fees, no minimum balance requirements, photo deposit, peer-to-peer instant payment via mobile devices – the accounts are offered to anyone over the age of 18 who passes an ID check (without the check screening). These accounts are intended to target people with no access to traditional banking and with weak credit. The GoBank website states they will require an $8.95 monthly charge; however, the fee will be waived if there is direct deposit over $500 a month. Just when you thought you knew who the competition was, it changed!

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Home DepotLawsuits Start Against Home Depot
(Issue 6 of 6)

On September 24th, the Atlanta Business Chronicle reported on how Atlanta-based Home Depot is being “hammered by lawyers.” Across the country, at least a dozen federal lawsuits have been filed claiming the nation's largest home improvement retailer needs to pay for its recent data breach:

  • Home Depot, says one lawsuit filed in U.S. District Court in Atlanta, "failed to take adequate and reasonable measures to protect its data systems from malware attacks, failed to take available steps to prevent and stop” the breach from happening.
  • In another case also filed in Atlanta, Pennsylvania-based First Choice Federal Credit Union says the breach is forcing it to incur the cost of canceling/reissuing numerous debit cards for its customers who were affected, and says it lost revenue as a result of decreased card usage.
  • New Orleans-based First NBC Bank “blasts Home Depot in a lawsuit filed Sept. 22 in Louisiana” and stated that "the security breach was the direct and foreseeable result of Home Depot’s failure to implement and maintain reasonable and industry-standard security measures to protect its customers’ credit card, debit card, and personal information." Resonating with all institutions, the lawsuit stated, "even though Home Depot failed to implement and maintain reasonable and industry-wide measures, it is this nation’s financial institutions, including First NBC, that are left on the hook for tens, if not hundreds, of millions of dollars as a result” of the breach.

These lawsuits will likely be drawn out in a lengthy process and are seeking class-action status, which, if granted, could include all entities impacted by the breach.

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