LAS VEGAS – Pledging once again to keep card coverage intact despite growing losses, the head of CUNA Mutual Group vowed last week to press his case against Visa and Mastercard to tighten tech standards warning anew of possible legislation in Congress to force the issue.
In remarks at CUNA Mutual's annual Discovery Conference, Jeff Post, its president/CEO, revealed his joining an industry coalition visiting lawmakers on Capitol Hill last week regarding what he said was a two-pronged approach of creating new awareness of the CU card problem and to pressure card firms to "come voluntarily to the table."
As he has before, Post said solving card fraud remains "our problem and our job to find a solution" since among financial institutions, CU cards are the instruments of choice for criminals at a time the card firms have failed the CU industry badly in controlling the problem.
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Post disclosed also he has participated in some "unpleasant meetings" in confrontations with CU card processors and service providers in convincing them to vastly improve their internal tracking systems.
A CMG spokesman in Madison confirmed Post met June 26 with other CU leaders with plans to visit NCUA, NASCUS, and several U.S. senators including Wisconsin's Russ Feingold and Herb Kohl, both Democrats, as well as Charles Grassley, the Iowa Republican. It was noted that CMG has 700 employees at CUNA Mutual Life, an affiliate in Waverly, Iowa.
Also on the Post visitation circuit was a Washington meeting with representatives of the Chicago-based Ukranian National Credit Union Association,
That visit apparently underscores Post's search for help in tracking down Eastern European criminals who he stressed have found CU cards "the land of opportunity" for fraud by gaining access to "free money."
"On the black market, credit union credit card numbers are worth more than 70% of bank cards," said Post in citing a Wall Street Journal article on the topic. At the same time, Post maintained that CUs, particularly small ones, have the most exposure because they lack firm card controls.
Further discussing the topic during a special "executive dialogue" session with Post as moderator, the CMG CEO said while CUs are the No. 1 target, banks are not far behind in vulnerability.
"Credit unions are closest to the beach before the tsunami" but banks are right in back, he quipped.
Responding to audience questions about banks suffering equal losses to CUs, Post said banks sometimes carry self-insurance, plus they have an ability to rely heavily on merchant business to cushion against large losses.
But he said that can go only so far and thus, he urged the banking lobby to put aside its anti-CU tax battle and join what he called a "crusade" against card fraud.
"Harris Simmons needs to cut the crap," invoked Post referring to the chairman of the American Bankers Association, a CU nemesis.
As far as heading to Washington to battle the card firms, Post joked that he was treading into dangerous territory by going against powerful corporate interests maintaining he might find "men in black sedans and sunglasses following me," as he tours the Capitol.
Meeting with reporters earlier in the week, Post increased slightly his previously published 2006 forecast of anticipated card losses by CMG-insured CUs to reach $130 million, an increase from $120 million. Last year's losses totaled $89 million.
As in past public statements, Post said he was not now ready "to give up the ship" in covering card losses though he said again that paying out more than $2.60 for every dollar of premium "is not a long-term, sustainable business model." [email protected]
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