Here’s Why Credit Unions Must Take Data Privacy Seriously in 2025

A credit union in California recently received its first California Consumer Privacy Act (CCPA) request. Under this law, consumers have the right to require an organization to delete personal information collected from them, among other data privacy rights.

The credit union had a boilerplate privacy policy in place and thought it was fully covered. However, when the request came in, they faced the frightening realization that they did not know what data was collected, all the places the requestor’s data was stored, how to access it or how to remove it.

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Had they been prepared with the proper data privacy measures, the request could have been easily granted. Instead, it became an emergency that left them scrambling against the clock to complete the data subject request within the legally prescribed timeframe.

So, What Happened?

The credit union’s compliance team felt confident about the solution they had in place, which included a privacy policy and cookie notifications. While both are foundational elements of data privacy, they barely begin to scratch the surface of the processes credit unions truly need to protect member data.

What is Data Privacy?

Data privacy means ensuring your credit union knows what data you are collecting, what is happening with the data collected, why that data is being collected, and transparently communicating that information with the people you are collecting information from.

Data privacy and security are frequently confused. While security is 90% covered by data privacy, data privacy is much more than security.

Cookie banners and privacy policies are the basic pieces of data privacy. Beyond those, data privacy is a process, not just a tech solution a credit union can subscribe to.

Some credit unions go through data privacy audits, which are a step in the right direction. However, an audit shows one snapshot in time – data collected only in the moment. Policies can be created around that small timeframe, but where most organizations fumble is in what happens next.

Perhaps your credit union subscribed to a technical solution that generated a privacy policy or created a snippet of code for a cookie banner, but those items alone likely do not mean your organization is compliant with the growing web of data privacy laws and regulations. Data privacy policies and processes are not “set it and forget it” solutions – they need maintenance and updates to remain current and accurate.

Unfortunately, many credit unions do not understand all the ways they are truly gathering data and what they do with that data. Even something as small as introducing a new tag into a Google Tag Manager container can have huge data privacy implications.

The Consequences of Neglecting Data Privacy

Not only are credit unions required to operate under financial services data privacy regulations such as the Gramm-Leach-Bliley Act (GLBA or Financial Services Modernization Act of 1999), but they are also subject to federal and state data privacy laws.

The U.S. does not have a singular data privacy law to set the standard, so each individual state has separate laws and regulations that organizations must adhere to. Some state-based privacy laws have exclusions for organizations required to comply with HIPAA or GLBA. And, in some cases, federal law supersedes state law. Maintaining compliance with the various data privacy laws, regulations and provisions can be overwhelming.

For example, some credit unions are shocked to learn that the privacy policy required by the GLBA does not align with their actual use of customer data.

The consequences a credit union can face for data privacy violations are massive and depend on a wide variety of factors. They can range from a slap on the wrist to federal charges. In some jurisdictions, individual officers such as the CEO or chief information officer can be sued and held personally liable for non-compliance.

Regardless of the state, the expectation is that if a credit union is collecting the data, it is following the proper steps to maintain data security and integrity.

What Can Credit Unions Do to Address Data Privacy Right Now?

Start with an audit. Determine what data your credit union is gathering, where it is being gathered and how it’s being used, stored and/or destroyed. Asking those questions is typically eye-opening for most credit unions, as they don’t realize the number of ways they are gathering personal information. Learning your data landscape through a self-conducted audit can save days – even weeks – of work if you need to partner with a professional data privacy firm.
Know your tools. Keep a running list of all the data privacy and security tools your credit union has used in the past and is currently using. Be sure to note if the tools are actively maintained and updated.
Work with a professional. Look for a data privacy partner that will meet your credit union exactly where it is. Any digital agency offering an out-of-the-box tool or template will likely not be a good fit for most credit unions. Every organization is unique – staffing varies, and the level of risk tolerance is different. The sheer number of variables between credit unions is often not aligned with a “one-size-fits-all” model or approach.

When big banks suffer data breaches and a loss of clients due to data privacy violations, they can simply move into different markets, target new demographics and add marketing dollars. Credit unions don’t always have that luxury or flexibility.

Consumer trust is directly tied to transparency, security and communication. As data breaches become more commonplace and highly publicized, consumers are paying closer attention. If a credit union has and communicates a strong commitment to data privacy and can support it with action, it can stay ahead of the competition.

Compliance doesn’t need to be complicated, but credit unions must act now to be vigilant about data privacy, mitigate risk and safeguard members’ data.