Current Issues Affecting Credit Unions

 

VantageScore (SM) A Replacement for Counsumers FICO Credit Score and Jointly Developed by Equifax, Experian and TransUnion has been Released

Under the new VantageScore system, credit score variances between credit reporting companies will be as a result of data differences within each of the three consumer credit files and not subjective data interpretation.

 

VantageScore uses score ranges from 501 to 990 and is independently offered through each of the three national credit reporting companies. More...

 

Report Internet Crime

The FBI and the National White Collar Crime Center have created an Internet Crime Complaint Center ("IC3") where crime victims can report Internet Fraud and other cyber crimes.  Complaints filed via the web site are processed and may be referred to law enforcement or regulatory agencies for possible investigation.

 

Document Destruction under the FACT Act

The FTC has published its final FACT Act rules requiring proper disposal of documents that contain consumer information, such as credit reports. The Commission believes that there are a variety of personal identifiers beyond simply a person’s name that would bring information within the scope of the Rule, including, but not limited to, a social security number, driver’s license number, phone number, physical address, and e-mail address. The rules apply to almost all businesses, including credit unions.

 

FACT Act Alerts

The Fair and Accurate Credit Transactions Act establishes a one-call fraud alert system. Consumers will be able to report the theft of their identity to one credit reporting agency and the information will be shared with the other national agencies. Credit unions will need to take special steps to verify identity whenever such a fraud alert appears on a credit report they've requested as part of a credit transaction. It may be necessary to update your software for FACT Act compliance.

 

Credit Unions may also sometimes see Military Active Duty Alerts on credit reports. As part of the FACT Act, active duty military personnel can request this notification while they are stationed away from home, unlikely to be be requesting credit. Positive verification of identity is required before granting credit.

 

The new alerts benefit credit unions and their members by reducing fraud. Members who've been victimized will find it easier to rectify the situation, and the credit unions financial losses will be reduced, as well.

 

FACT Act - Red Flag Indicators of Identity Theft

The FACT Act requires the National Credit Union Administration, working with the Federal Trade Commission, to identify red flag indicators of identity theft, to establish guidelines, and to update them as often as needed.

 

One such identity theft red flag indicator is a change-of-address notification on a member's account, followed within 30 days by a request for an additional or replacement credit card. The credit union is required to take certain steps, such as notifying the cardholder at the former address, or confirming the change of address by other specified procedures.

 

Regulators are working hard to develop guidance for spotting red flag indicators of identity theft in member account transactions.

 

USA PATRIOT Act and Customer Identification Programs (CIPs)

Customer Identification Programs (CIPs) fight money laundering and the funding of terrorists. The USA PATRIOT Act, Section 326, requires credit unions to verify the identity of all new accountholders, to maintain records of information used verify identity, and to check prospective accountholders' names against lists of known or suspected terrorists. 

 

To remove much of the burden, the major credit bureaus (Experian, Equifax, and TransUnion) now offer automatic searching of the Treasury Department's Office of Foreign Assets Control list (OFAC) as an optional add-on to credit report requests.

 

Thanks to the efforts of credit unions and other financial institutions, the U.S. has designated 387 entities as terrorists or supporters of designated terrorists and frozen over $142 million in terrorist-related assets. More than $37 million has been frozen in the United States. 

 

Financial Literacy

The Department of the Treasury has awarded the John Sherman Award for Excellence in Financial Education to several credit unions for their innovative financial education efforts.

 

The Financial Literacy and Education Commission has recently announced a Financial Education Website and Hotline, to promote financial literacy and education. The National Credit Union Administration (NCUA) and the U.S. Treasury Department are participating on the project.

 

 


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