ARLINGTON, Va. — In response to a request for comments to the Federal Trade Commission following up on a recommendation by the President's Identity Theft Task Force, NAFCU said credit unions' use of Social Security numbers is essential but fiercely protected.
"The credit union industry is firmly committed to combating identity theft–a reprehensible crime that ruins victims' good names and costs time and money for financial institutions. The credit union community is extremely vigilant in guarding its members against identity theft," NAFCU Senior Vice President of Government Affairs Dan Berger said in a letter to the FTC.
NAFCU pointed out that credit unions generally have to use SSNs from their members to comply with the identity verification section of the Bank Secrecy Act and USA PATRIOT Act. "Additionally, credit unions must collect SSNs when fulfilling their BSA/AML reporting obligations," the letter highlighted. "For example, the SSN is required on Currency Transaction Reports (CTR) and Suspicious Activity Reports (SAR)." SSNs are also used to aggregate transactions to monitor for structuring or other suspicious activity and check people against government lists, such as the Office of Foreign Assets Control's sanctions listing.
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However, there are other circumstances where credit unions use SSNs that are not mandated by law, Berger acknowledged, such as checking credit reports. They can also be used for employee background checks, benefits, and other employment
purposes.
And, as credit unions are unique from other financial services providers in their democratic nature, they can be used as an identifier for ensuring a fair and accurate election process.
Even as credit unions periodically destroy information regarding inactive accounts, federal regulation requires that SSNs be stored permanently on membership applications and joint account agreements. However, federal law also requires the safeguarding of personal information by financial institutions under the Gramm-Leach-Bliley Act.
Additionally, as part of their pursuit for member financial literacy, NAFCU offers member credit unions model curricula and materials to increase consumer awareness of identity theft prevention.
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