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By DAVID MORRISON CU Times Staff Reporter ST. PETERSBURG, Fla. — The business has changed a great deal since Steve Ruwe, PSCU Financial Services’ first chief risk officer, started working with credit cards. In 1979, Ruwe, then a 24 year-old lending officer at Gary-Wheaton Bank, a community bank in the Chicago area that was small enough that it celebrated when it grew to more than $100 million in assets, stepped up and volunteered to lead the institution’s new bank card program. Bank cards were a very new step for the bank and Ruwe said the task of managing the program, in a way, fell to him by default. “I think their perception was that I was the one young enough and with enough energy to take it on,” Ruwe said, “and that was how I first got involved with cards.” It has been a relationship that he has maintained ever since, across a wide spectrum of changes. “Back then, merchants would deliver their card receipts to us and we would bundle them up and send them off to actually get keyed in,” Ruwe said, “and the transactions wouldn’t post to accounts until two days later. Now you can make a card transaction and find it posted to your account almost immediately.” Likewise, in the early days, the industry almost dealt with card underwriting and fraud risk on the honor system. “I can remember actually going to a delinquent cardholder’s door in order to get the card back because, back then, that was the only way we had to make sure they stopped using it,” Ruwe said. “Authorizations were almost done by voice back then, when they were done at all.” Ruwe helped the bank get its card program underway and then moved on to Visa in 1983, starting a 23-year career moving between Visa and banks that issue Visa. On the way he said he got a very good feel for both the perspective of the card brand and the financial institutions that issued the cards. Along the way he worked for Barclays Bank as well as Household Credit Services right when Household was rolling out the brand new General Motors rewards card, which allowed cardholders to earn rewards points toward the purchase of a new GM car. “At the time that was probably the largest and most innovative rewards program out there,” Ruwe said. For the last 13 years, until September of this year, Ruwe served as Visa’s executive vice president of operations and risk where he served many different facets of the card brand both domestically and overseas. Then, turning 53, Ruwe decided to retire. Visa’s employee benefit package has always been good, dating to the time when the brand was a much smaller association trying to keep employees from taking more lucrative jobs in the growing industry. “I guess I came to a point where I had enough years to retire and decided to go ahead and take that step,” Ruwe said. He added that he hadn’t stopped with Visa because he was tired of working with cards or because he felt any compelling call to do anything else specific. It was just time. Ruwe credited his coming to PSCU to a long-standing friendship he had with PSCU CEO David Serlo. The two met when Serlo had served on a Visa committee that Ruwe chaired and Serlo called him when he heard Ruwe was leaving Visa to offer him a chance to take the helm of managing risk for the CUSO. Credit unions were coming under real pressure on the questions of card fraud and risk mitigation and Serlo has said he was looking for someone who could bring a level of expertise and drive to a very complex and urgent position. Ruwe said he joined up with PSCU because he sensed in the position a chance to build something for credit unions and maybe leave a lasting impact. “I want to be sure everyone understands that I am not saying that credit unions are necessarily doing anything wrong,” Ruwe said, “because they’re not. But I think I can help build on what credit unions are already doing right and make sure credit unions have access to the tools they need to manage risk. Credit unions shouldn’t have to play second fiddle to anyone in the industry when it comes to risk management.” The fact that PSCU has opened a service center in Phoenix also helped convince him to come with PSCU, he said. Phoenix is a relatively short distance from San Mateo where he and his wife Kathy and their younger daughter, Hannah, live. An older daughter, Kellen, attends a university in the state of Washington. “It has been helpful that PSCU has been as focused as it has been on family,” Ruwe said. Ruwe admitted that prior to coming to PSCU he really hadn’t had much contact with credit unions, other than working with them as Visa issuers. But he added that, in many ways, working for an association like Visa is a lot like working for a credit union or CUSO in that both an association and a credit union are going to be focused on their members. “If anything, that focus is even stronger at a credit union,” Ruwe said, “because there is a lot more focus on all the members.” Ruwe’s long experience in the credit card industry tends to give him a long-term view of credit card security issues and makes him a bit of an optimist as well. He pointed out that the cards that consumers have now are the result of the industry reaction to previous risks and fraud losses. He used, as an example, previous problems with fraudsters counterfeiting cards. Countering that problem led to the development of the CVV data being added to cards and this problem will, in turn, lead to issuers tightening up their procedures to counter the changing risk. He also noted that the adoption of a new industry-wide card security technology, such as using embedded computer chips and personal identification numbers with card transactions would only happen if there is a strong business case for it. “Even with the uptick in fraud losses as a percentage of total card volume, the industry still believes that applying the available anti-fraud methods properly will be enough to reign in the losses,” Ruwe said. “What I hope to do is to build a resource which will help credit unions do just that, “he added. –[email protected]

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