Gigi Hyland: 'Challenging' Times for Credit UnionsNCUA Board Member Discusses State of Credit Unions, Top Threats
"Overall, credit unions remain healthy and strong," Hyland says in a new podcast interview with Tom Field, editorial director for Information Security Media Group. "But just like with other types of financial institutions and businesses in general we see in the paper day in and day out, our nation's credit unions are really finding the current economic environment pretty challenging. The financial statistics that we gather every quarter really reflect, I think, the collective difficulties that our nation's credit unions are experiencing."
Over the past three years, Hyland says the aggregate net worth ratio for all federally insured credit unions dropped, from 11.51 percent to 9.91 percent. Add to that net-worth-ratio decrease the doubling of delinquency and loan charge-off ratios, as well as the fluctuation between negative and marginal profit levels, and it's easy to see that credit unions -- like other financial institutions -- have some rocky roads ahead of them.
"They have not been immune to the effects of the economic climate," Hyland said.
Partially as a result of tough economic times, credit unions have suffered increased incidents of insider crime, Hyland says. She lists the top five information security threats facing credit unions:
- Employee theft of data;
- Employee misuse of data;
- Debit and credit-card processor issues, ala the Heartland Payment Systems breach;
- External hacks, where an outside party gains access to a credit union's system;
- Third-party risks from service providers.
Hyland also discusses how credit unions are complying with the Identity Theft Red Flags Rule, as well as what she expects to see in terms of regulatory reform from pending federal legislation.
For more details, please listen to the recorded interview.