The Home Depot Breach: How North East Texas Credit Union Met the Challenge

BY LAURA ENOCK

Data breaches make for difficult times for credit unions. There is a need to remind members of the severity of the security breach, advise them on steps to take for better protecting themselves, and reassure them that their money is still safe with the credit union. All the while, you know it’s your organization that will have to bear most of the costs connected to any data breach. Credit unions need to keep their financial future secure in order to protect their members.

With disasters like Target and, more recently, Home Depot in the news, and the possibility of more security problems in the future, how to respond to data breaches needs to be a topic of conversation occurring among the leadership team at every credit union. Having to weigh the competing concerns of member satisfaction and institutional financial security with incomplete information is a very difficult challenge to address.

This was the position that North East Texas Credit Union (NETCU) encountered after the Home Depot breach. It knew some of its debit card numbers were at risk. It didn’t know how long it would be before Home Depot released the list of compromised numbers. NETCU faced significant risk of fraud and the knowledge that it would be liable for around 80 percent of the losses incurred as a result of that fraud.

Inaction in a situation like this was not an option. After the events of the Target data breach, NETCU knew it could not withstand another round of fraud losses like it had previously experienced. It knew its membership could not afford the loss and inconvenience of more fraudulent charges.

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CU Business Magazine Cover @2014

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By Michelle Thornton

Nearly 20 years old, the global Europay, MasterCard and Visa (EMV) standard has been adopted for debit and credit payments in many parts of the world.

The United States will begin to officially jump on board the EMV bandwagon on October 1, 2015. That is when the four payment card networks – Visa, MasterCard, Discover and American Express – institute a liability shift for domestic and cross-border counterfeit card-present point of sale (POS) transactions.

With this driving factor, EMV adoption in the USA is finally and seriously on its way, yet there is still much work ahead.

Due to the complex nature of EMV, all stakeholders in the payment chain will need to make changes to support the standard. This includes terminal manufacturers, merchant acquirers, merchants, electronic funds transfer (EFT) processors, networks, issuers, card manufacturers, card personalization bureaus and core data processors. Each of these entities must code to the specifications for every EMV payment application in order to continue to support the payment ecosystem as it is today. 

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