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CURRENT Newsletter | 7 March 2013

Mar 7, 2013 by Lewis Wood

CURRENT Newsletter | 7 March 2013

March 7, 2013
  • Your comments and submissions are always welcomed. E-mail pr@vacul.org

The next edition of CURRENT will be published March 21.

Headline News
Compliance/Regulatory Affairs News
Governmental Affairs News
Financial Services/Marketplace News
Education & Networking Opportunities
News From Credit Unions
Chapter News
Marketing News
Security/Fraud Prevention

Headline News

League Seeks Applicants for 'Rising Stars Program;' 8 Young CU Professionals Will Win Scholarships to 2013 Annual Meeting

In 2012, you may remember your League holding the first-ever Crash Event at the Annual Meeting. Seventeen young professionals got to participate in this unique experience thanks to a partnership with The Cooperative Trust and sponsorship from CUNA Mutual Group.

This year, your League is holding the inaugural Rising Stars Program and providing scholarships for up to eight of Virginia’s brightest young credit union professionals to attend the Annual Meeting in Roanoke. You must be 35(ish) and younger to qualify. If you consider yourself to be a leader and like to challenge the status quo, then this is for you! [learn more] (PDF, 425kb)

[learn more about the 2013 Annual Meeting]
 [register for the Annual Meeting]

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New at this Year's Annual Meeting: Volunteer at the Food Bank!

We're excited to announce a volunteer opportunity at this year's Annual Meeting. On Wednesday, April 17, we have the opportunity to help Feeding America Southwest Virginia, a Roanoke-area food bank, by volunteering for two shifts: 9 a.m. until noon and 1 p.m. until 4 p.m.

They'll put us to work doing inventory, preparing food boxes, and other assorted tasks. If you're interested in participating on one or both shifts, please drop an email to your League's Lewis Wood at lwood@vacul.org. We'll send you the volunteer packet, which you'll need to complete and bring along with you the day of the event.

This is an excellent opportunity to have a positive impact on this year's Annual Meeting host city and a feel-good way to start the Annual Meeting. Learn more about the good work of Feeding America Southwest Virginia online at http://www.faswva.org/.

> Also, we're asking that you consider donating needed items to the Food Bank. (Monetary donations are appreciated as well!) Here is the list of the most-needed items: canned meats, canned meals, rice, peanut butter, canned vegetables, canned fruits, beans and 100% juice.

Bring these along and drop them off at our designated collection point (near the registration area), and we'll take care of delivering them to the Food Bank!

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Improving Loan Losses, New Auto Loan Growth Fuel Strong CU Earnings

The National Credit Union Administration's just-released 2012 credit union data confirm that the trends the Credit Union National Association had reported on throughout 2012 continued in fourth quarter, and that 2012--from almost every vantage point--was the best year for credit unions since before the start of the Great Recession in 2007, according to a CUNA economist.

Loan originations and new-auto loans saw dramatic increases, and loan-loss provisions declined last year, Mike Schenk, CUNA vice president of economics and statistics, told News Now. [read more]

[related: $8.5B In Record Earnings Set By CUs In 2012]
 [click here to read the NCUA press release]
 [click here to view credit union performance trends]

Notes of Interest for Virginia-Based Credit Unions (Year Ended Dec. 2012)
  • Net Income - $1 Billion
  • Total Interest Income - $4 Billion
  • Total Non-Interest Income - $1.5 Billion

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League to Reschedule NoVa Town Hall Meeting; Still Time to Register for Tidewater, Central Va. Events

We were forced to postpone the NoVa Town Hall, originally scheduled for Wednesday, March 6, owing to the weather. The event will be rescheduled and we'll keep you posted on a new date. These Town Halls remain and registration is still open for each.

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A First: CUs' Contributions To Kids' Hospitals Top $10M

Credit Unions for Kids, a collaborative effort in the credit union community that raises funds for local Children's Miracle Network Hospitals, raised a record $10.2 million in 2012. The milestone represented a $1.5 million increase over 2011 when America's credit unions generated $8.7 million for Children's Miracle Network Hospitals. [read more]

> More good news: Of that $10.2 million total, $510,428 was donated to the CMN Hospitals serving the commonwealth by our credit unions and CO-OP Financial Services through its Miracle Match program!

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Compliance/Regulatory Affairs News

CompBlog: CMG Gives Insight on Single-premium Credit Insurance Ban

A recent CompBlog post focuses on a rule that bans financing of any premiums or fees for payment protection products in connection with a consumer credit transaction secured by a dwelling, but allows the products to be paid for on a monthly basis.

Guest blogger David Tomar of CUNA Mutual Group offers "a few points to keep in mind" regarding the Dodd-Frank Act revision of Section 1414 of the Truth in Lending Act. Tomar notes the Consumer Financial Protection Bureau created an implementing rule in January. It goes into effect June 1. [read more]

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Governmental Affairs News

League's Governmental Affairs Newsletter Online

The latest edition of your League's governmental affairs newsletter - The Advocate - is available online.
 [see it here] (PDF, 527kb)

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Call FCU is 100% for VACUPAC!

Many thanks to Call Federal Credit Union for its support of the Virginia Credit Union Political Action Committee. The CU reports 100% participation at the pin level from Board, committee members and senior staff.

Contributions to VACUPAC are "career insurance," enabling credit unions to support political candidates willing to hear us out on our issues. Learn more about VACUPAC by contacting your League's Karin Sherbin at 800.768.3344, ext. 626 or ksherbin@vacul.org.

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CUNA's Tax Status Advocacy Toolkit Empowers CUs To Tell Their Member-Value Stories

More tools were added to the Credit Union National Association's Tax Status Advocacy Toolkit this week. Three newsletter articles to help credit unions talk to their members about the value of credit union membership are now  available in the ever-growing arsenal.

"Our research shows that when members understand the value of membership, they will stand with us to defend the exemption," CUNA President/CEO Bill Cheney said when announcing the toolkit created by CUNA and the state credit union leagues. [learn more]

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Senate Banking Panel Debates Path for Housing Finance Reform

The Senate Banking Committee examined the Federal Housing Administration's fiscal problems on Thursday, with lawmakers still divided on the best approach to take for reforming the troubled agency.

An independent audit last year determined the FHA faces a projected capital shortfall of $16.3 billion, meaning the agency could be forced to request its first-ever transfer from the Treasury Department, thanks in large part to historic losses sustained during the financial crisis. (American Banker Online, March 1)

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Brown, Vitter to Introduce Bill to End Too Big to Fail

Sens. Sherrod Brown, D-Ohio, and David Vitter, R-La., said on Thursday that they plan to introduce legislation addressing concerns about "too big to fail" banks. The two lawmakers announced their intentions during back-to-back speeches, in which they described their concerns and outlined their upcoming bill.

The legislation will draw upon ideas put forward by the Thomas Hoenig, a director of the Federal Deposit Insurance Corporation and the agency's former Chairman Sheila Bair, along with Richard Fisher, president of the Federal Reserve Bank of Dallas. Vitter added that while the two are not quite ready to unveil their bill, the legislation would "fundamentally require significantly more capital for the megabanks" and reduce the regulatory burden on community banks. (American Banker Online, March 1)

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March 12 Is Cordray Nomination Hearing

Richard Cordray will have his day before the Senate Banking Committee: The current Consumer Financial Protection Bureau director, who was appointed to that position last year, will appear at a March 12 committee hearing on his nomination. [read more]

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Financial Services/Marketplace News

Fed Survey: US Economy Growing Throughout Country

Strong auto sales, better hiring and a continued housing recovery helped the U.S. economy grow in January and February throughout the country, according to a survey released Wednesday by the Federal Reserve.

The survey noted that 10 of the Fed's 12 banking districts reported moderate or modest growth, while the Boston and Chicago districts reported slow growth. Consumer spending increased in most regions, although spending growth slowed in many districts and much of the gains were driven by auto sales. [read more]

[related: Economic Confidence Plunges in Late February — Gallup]
 [related: Fed Survey: U.S. Economy Growing Throughout Country]
 [related: Why America's Middle Class is Losing Ground]
 [related: Income Takes Sharpest Drop in 20 Years, But Spending Rises]
 [related: Not-So-Golden Years: Over 75, Burdened by Debt]

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Should CUs Offer Portable Account Numbers To Switch FIs?

About 61% of U.S. consumers surveyed in a global study want a portable account number that would allow them to switch financial institutions without changing account details. The idea could be a boon--or a bust--for credit unions.

The percentage of U.S. consumers who favored a portable account was the lowest among the six countries, which ranged from 62% in the U.K. to 76% in Spain, according to the online YouGov study conducted by British Telecommunications (BT) Global Services.

It surveyed 6,500 people in the U.S., United Kingdom, Germany, France, Hong Kong and Spain. Switching from banks to credit unions helped prompt 2.2 million new members in a 12-month period surrounding Bank Transfer Day, according to Credit Union National Association statistics.

Many credit unions that capitalized on consumers' dissatisfaction with bank fees in 2011 and 2012 helped make it easier for new members to transfer their accounts by offering Switch Banks tool kits. But to offer a portable account number, credit unions will find that the devil is in the details. [read more]

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Mortgage Applications Shoot Up 14.8%

The number of mortgage applications filed in the U.S. shot up 14.8% for the week ending March 1, the Mortgage Bankers Association said Wednesday. The turnaround arrived after three straight weeks of declines.

Applications rose alongside the refinance index, which grew 15%, and the purchase index which also shot up 15%, showing strong market demand for refis and home purchases. The chief economist of Quicken Loans Bob Walters welcomed the MBA report as a sign of a "healing housing market." [read more]

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Credit Unions Will Match Loan, CD Rates

"The next time you need a loan, be sure to ask your credit union whether it will match a competitor's interest rate," Kiplinger's Personal Finance tells consumers. In a survey of community credit unions, GoBankingRates.com found that some institutions will match competitors’ interest rates on auto loans, certificates of deposit and other products.

Bring proof, such as documentation showing a loan rate that has been offered to you, advises Kiplinger's. "Each credit union’s rate-matching promotion is different, so be sure you understand the full terms of a quoted rate before you bank on it," says Casey Bond, managing editor of the Web site GoBankingRates. Even if a credit union or bank doesn’t have a formal program, ask whether it will match a competitor’s rate. [read more]

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Fed Leaves Swipe Fee Cap Unchanged

The Federal Reserve Board said Tuesday it would not adjust its cap on interchange fees, leaving it at 21-cents per transaction. The decision came attached to a biannual survey that found that 33% of debit card issuers averaged transaction fees above the cap. Surprisingly, that figure was even higher than the 20% of issuers that averaged fees higher than 21 cents before the Fed's cap was in place.

The Fed's rule, which took effect in 2011, does not apply to banks with less than $10 billion of assets and also allows bigger institutions to charge an additional 1-cent per transaction to account for certain fraud prevention activities. The Fed said the higher percentage of transactions above the cap was also due to more respondents to its survey, including foreign banks or smaller issuers that had higher costs. (American Banker Online, March 6)

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Market Share for Direct Banks is Higher Than Ever

When Andy Collins walks through a crowded suburban shopping mall, he doesn't see shoppers all around him. As the vice president of emerging payments for USAA Federal Savings Bank, a direct financial institution without a single traditional branch to its name, what Collins sees is perambulating banks.

With smartphones capable of depositing checks, monitoring balances and moving money between accounts, Collins explains, "all those people walking around potentially have a bank in their pocket." Direct banking, once a clunky adjunct to traditional banking that involved the phone, the Internet, attractive interest rates-and lots of calls to the help desk-is going mainstream. Advocates of traditional banks may have seen ING Direct's recent sale to Capital One as a sign that the direct-bank model was finally getting its comeuppance.

But that was no fire sale, and in fact there is evidence that the country's four major direct banks, Ally Bank, Discover Bank, Capital One 360 (as ING Direct was recently rebranded) and USAA, are starting to nibble the lunch of their brick-and-mortar competitors, and not just the big banks and large regionals, but community banks and credit unions as well.

[read more]

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Young People Steering Clear of Debt

Young people are racking up larger amounts of student debt than ever before, but fresh data suggest they are becoming warier of borrowing in general: Total debt among young adults dropped in the last decade to the lowest level in 15 years.

A typical young U.S. household—defined as one led by someone under age 35—had $15,000 in total debt in 2010, down from $18,000 in 2001 and the lowest since 1995, according to a recent Pew Research Center report and government data. Total debt includes mortgage loans, credit cards, auto lending, student loans and other consumer borrowing. [read more]
 [related: Bankruptcies Decline In February]

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New Rules for Home Loans: Mortgages Might Get More Expensive

New mortgage rules from the Consumer Financial Protection Bureau cement in place the tough criteria for getting a home loan imposed after the mortgage meltdown. The rules ensure that the lax practices and toxic loan features (such as exploding interest rates, mushrooming balances and interest-only payments) that were at the heart of the housing bust won't be revived.

The rules also protect lenders who comply with them from lawsuits brought by borrowers who wind up in foreclosure. For borrowers seeking a regular mortgage backed by Fannie Mae, Freddie Mac, the Federal Housing Administration or the Department of Veterans Affairs (about 90% of the market), not much will change.

"It won't get easier to get a mortgage, but it won't get harder, either," says Guy Cecala, publisher of Inside Mortgage Finance. But the cost of a loan may rise as lenders pass along the costs of complying with the rules. [read more
 [related: US Home Prices Rose by Most in Nearly 7 Years]

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End the Mortgage Interest Deduction? Expect a Fight

Over the decades the mortgage interest deduction has become American folklore -- buy a house and get a tax deduction for the interest you pay on your loan. But now, amid tightening budget belts and questions about economic class fairness, that American-as-apple-pie notion is being debated.

Taxpayers who itemize their deductions -- and are homeowners -- can deduct the interest paid on their mortgage up to $1 million, plus up to $100,000 of home equity loans, a type of loan in which the borrower uses the equity in their home as collateral. And homeowners can do the same on a second home. But as part of ongoing talks over U.S. tax reform and the closing of loopholes to help reduce the national debt, the mortgage interest deduction has a big target on its back for major changes if not total elimination. [read more]

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Education & Networking Opportunities

March 7 'Pressing Issues' Audio Conference Is Free To CUNA Members; 2 p.m. Today!

The Credit Union National Association is now offering its popular "Pressing Regulatory and Compliance Issues Audio Conference" free to affiliated credit unions and its first program of 2013 is being offered March 7 at 2 p.m. This Thursday's program will feature:

  • The latest legislative developments affecting credit unions;
  • An update on CFPB rules, including international remittance transfers, mortgage servicing, ability to repay and originator compensation;
  • NCUA issues, including pending proposals & a summary of the February NCUA Board Meeting;
  • Proposals currently open for comment;
  • The three Reg Z provisions that go into effect June 1, 2013; and
  • The credit agency rating regulation that goes into effect June 11, 2013.

CUNA recommends that registrants attend all four free audio conferences to ensure a complete view of the latest regulatory and compliance issues, first-hand, throughout the year. 
 [read more]

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Free League Compliance Webinar March 13

Your League's Compliance Team will be hosting a free webinar on March 13 at 2:30 p.m. The webinar will cover the latest compliance hot topics. Register by emailing compliance@vacul.org.

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March 13 Webinar: Monitoring the Effectiveness of Your Compliance Program: Quality Assurance Testing & Auditing

Today’s credit unions are subject to myriad regulations. Failure to comply with these regulations is costly and can cause reputational damage and penalties, as well as impair the credit union’s ability to achieve its business objectives. Join us for our March 13 webinar and learn best practices in developing a comprehensive risk-based compliance testing and quality assurance program. [learn more]

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March 14 Webinar: Consumer Financial Protection Bureau Update - What’s in Effect, What’s Imminent & What’s on the Horizon

Our March 14 webinar will provide a detailed review of the current status of consumer compliance proposals, final rules, and what consumer and mortgage lenders should expect from the CFPB in the future. The goal of this webinar is to give you the most-current information. [learn more]

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Free NCUA Credit Union Workshop in Richmond

Date: Friday, March 22
 Time: 7:45 a.m. - 8:15 a.m. (Registration and Continental Breakfast); 8:15 a.m. – 4 p.m. (Session)
 Location: Double Tree Hotel Richmond - Airport
 Agenda includes: Issues Facing Credit Unions, What to Expect During Your Next Exam, Strategic Planning for New and Emerging Markets, and Regulatory Compliance Issues. 
 [learn more]

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News From Credit Unions

ABNB FCU Helps Members Save$7.9 Million in 2012

In 2011, ABNB set a goal to save its members $1.5 million by refinancing their crazy-high interest rate loans with more than fair rates, putting that money back into members' pockets, where it belongs. Now 2 years later, ABNB has continued this campaign, saving its members more than $12 million!

"As a community based credit union, we couldn't think of a better way to serve our members than to make sure they're getting fair, honest rates on their loans. It's something we've always done, but now we're tracking it and hope that this will encourage and educate consumers in the Hampton Roads community to shop around for the best rates before committing to a loan. Or, if they're currently paying on a loan with a crazy-high interest rate, they're not stuck," stated Carl Ratcliff, CEO of ABNB. [read more]

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Langley FCU Offers Assistance to Members Affected by Sequestration

With the reality of sequestration and federal budget cuts, Langley Federal Credit Union is taking immediate action to support members with special services, emergency loan options and other alternative solutions.

“The sequestration will have an enormous impact on Hampton Roads area businesses and residents,” said President/CEO Tom Ryan. “However, we are deeply committed to helping our members through these tough times by offering a number of affordable and alternative solutions. We know that the ripple effects of these cuts will harshly impact members' lives and we stand ready to help in any way we can,” concluded Ryan. [read more]
 [related: Wash. Post Spotlights CUs, News Now On Furloughs]

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Rekindle Sparks Collaboration Among Credit Union Leaders in Middle-Atlantic States

Since its debut last fall, Rekindle has been growing steadily through the middle-Atlantic states. Now, the initiative has emerged as an instrument to reawaken credit unions’ passion for collaboration – and for restarting the economic engine that founded the cooperative movement.

More than a year in the making, Rekindle springs from a core group of leading credit unions in Pennsylvania, interested in working together to solve problems. A group of select Virginia-based credit unions and the Virginia League are participating in the initiative as well. [read more]

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Connects FCU to Open Branch in Former BB&T Location

Connects Federal Credit Union bought a former BB&T branch at 9960 Midlothian Turnpike that will serve as the new home to its third location. The $72 million credit union paid $956,000 in an all-cash deal that closed in late February. Connects will relocate another of its Chesterfield County locations to the 2,770-square-foot branch. [read more]

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Chapter News

CUNA's Bill Cheney to Speak at March 14 NoVa Chapter Meeting

Credit Union National Association President/CEO Bill Cheney will be the featured guest speaker at the NoVa Chapter's March 14 meeting. Location: Marriott at Fair Oaks (11787 Lee Jackson Memorial Highway, Fairfax 22033). Time: 5:30 p.m. networking; 6 p.m. meeting; 6:30 p.m. dinner; and 7:30 p.m. speaker. Please RSVP by March 11 to pollardj@jfcu.org
 [learn more]

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Tidewater Chapter Meets March 14

Kevin Paasch, of CommonWealth Financial Partners, will offer a program titled, "How to Increase Non-Interest Income, Decrease Expenses and Increase Yield on Investments" at the Tidewater Chapter's March 14 Meeting.

Location: Greenbrier Country Club. Time: 6 p.m. social; 6:30 p.m. dinner and meeting. 
 Cost: $30 per person if registration is received by March 6; $35 per person if received after March 6. Make your reservations early! To RSVP contact Ginnie Riddle by email at VRiddle@bayportcu.org or by phone at 757.873.4047. [learn more]

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Richmond Chapter to Host March 23 Charity Bowl-A-Thon

The Richmond Chapter of Credit Unions’ Community Involvement Committee will host its annual Bowl-A-Thon in support of Children's Miracle Network Hospitals on March 23. The fundraiser begins at 9 a.m. with registration and a 10 a.m. game time at Uptown Alley; located at 6101 Brad McNeer Pkwy, Midlothian, 23112. [download information brochure]

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Marketing News

Filene Report Provides Insights On Engaging Young Adults

A new report from the Filene Research Institute describes how one company employed an on-campus peer-to-peer network to teach young adults about personal finance and enhance awareness of the organization's brand.

Since the Great Recession, young adults have bought fewer homes, purchased fewer cars, and accumulated less debt than they did before the recession, and they are shedding debt faster than older generations, according to a Pew Research Center analysis of government data (News Now March 1).

This report describes the efforts of Thrivent Financial for Lutherans to engage young adults, after a survey revealed it was virtually unknown to college students. Among the tactics Thrivent employed was Money Revolution, an on-campus program that encourages students to not only learn about financial literacy themselves but also coach their peers. [read more]

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The Real Reason We Love Some Brand Logos - And Hate Others

Why do we get so worked up about logos? What’s going on under the surface that makes us respond the way we do to seemingly innocuous elements? And how can companies that spend bundles on branding consultants and focus groups still manage to get such a basic building block of their identity so wrong? [read more]

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Security/Fraud Prevention

Cyberattacks Put Financial Institutions' Reputations at Risk

The growing number of cyberattacks against financial institutions is raising serious reputation concerns for financial institutions, Federal Reserve Board Gov. Sarah Bloom Raskin said Thursday.

"Even beyond the potential theft of data and disruption of service, cyberattacks can represent significant reputational risk because they have the potential to create dissatisfaction among many customers, or even more chilling, total loss of consumer confidence," said Raskin in a speech at a banking conference at the Federal Reserve Bank of Atlanta. Cyberattacks on financial institutions have been occurring on a more frequent basis. (American Banker Online, March 1)

[related: CUNA: Obama Penning Cyber Security Executive Order]
 [related: NCUA Risk Alert - Mitigating Distributed Denial-of-Service Attacks]

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