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Yet again, a major card data security breach made headlines across the country as Radisson revealed an information breach of its hotels in the U.S. and Canada.The announcement made PSCU’s unveiling of its new CardLock product all the more timely. As one of the many whose debit and credit cards were replaced after the TJX breach-and a control freak-the product seems promising. After several months, I still have trouble remembering my new PIN, and of course, I don’t want to think about what my credit union had to spend to reissue all those cards.Beyond the cost and headaches card data breaches bring to consumers, issuers and merchants, the fact that a credit union CUSO was out in front with a technology that allows cardholders to turn their cards off and on like a light switch is remarkable. Credit unions are like the mom-and-pop boutiques of financial services, yet here they are beating out the big-box stores.The only way for the little guys to survive in a world seemingly driven by Wal-Marts is to offer something the big boys cannot by staying on top of and ahead of member needs and wants. Float to the top as a specialist to your members in a world drowning in generic mediocrity.Knowing your members and serving those of modest means is what credit unions were founded to do, so I was a bit surprised to find that the Government Accountability Office recently questioned the NCUA’s dealings with bad actors when it comes to lending discrimination. Credit unions consistently achieve rankings far exceeding other lenders in loans approved to low-income and minority borrowers when the HMDA data is revealed year after year.The GAO criticized the NCUA for its decentralized process of reviewing for lending discrimination. While I’m sure the paperwork and process for sharing with the Alexandria, Va., headquarters might stand to be improved-GAO complained that the NCUA took too long getting its data to the investigators-that does not mean the substance of the process is flawed. I believe a more localized approach could yield better results because the regional directors and examiners are closer to the source than Washington.However, the GAO faulted the agency for not referring any cases to the Department of Justice over the time period studied, which does seem to raise a red flag.GAO wrote, “Despite the joint interagency fair lending examination guidance and various coordination efforts, we also found that having multiple depository institution regulators resulted in variations in screening techniques, the management of the outlier examination process, examination documentation standards, and the number of referrals and types of examination findings. While differences in these areas may not be unexpected given the varied types of lenders under each depository institution regulator’s jurisdiction, these differences raise questions about the consistency and effectiveness of regulatory oversight.”For a governmental body that declares itself apolitical and independent, it certainly seems to be helping make the Obama administration’s case for a more unified regulatory structure in financial services.NCUA Chairman Michael Fryzel’s response was unapologetic for the agency’s lack of referrals to DOJ yet accepting of the need for further study, in fact encouraging it. He rightly argued: “NCUA concurs that additional study is needed relative to DOJ referrals; however, it should be done prior to reaching the conclusion about the consistency and effectiveness of NCUA’s regulatory oversight…Such referrals should only be done where there is a clear pattern or practice of discriminatory actions. NCUA did not identify any such actions during the time period covered by the report. NCUA uses the same fair lending examination procedures as the other banking regulators thereby providing a consistent approach to identifying potential DOJ referrals.”Fryzel went on to argue that there may not be violations among credit unions because of their nonprofit member ownership and management structure with defined fields of membership, helping them to better understand member needs and especially those of modest means that are typically the target of discriminatory actions.The chairman was dead on here, though as I said I find it difficult to believe that no credit union has been discriminatory in the last couple years that were studied.However, I’d also point out that fields of membership are discriminatory by definition; they can serve as a barrier to credit unions reaching out those who need them most: the low-income or unemployed, those uneducated about financial services and the many options, and those who are being discriminated against and don’t know it.–Comments? E-mail [email protected]

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