CUANM Newsletter
March 2, 2021
Inside this issue
  Ransomware Attacks Continue as Predominant Cyber Issue  
 

Ransomware developers and affiliates have been telling victims they must pay the ransom or stolen data and internal company secrets will be publicly released. Unfortunately, not everyone has been a believer. Six and seven-figure demands have become routine among ransomware attacks with the average ransom payment in quarter two of 2020 reaching $178,254, a 60% leap from the $111,605 average in quarter one according to the Coveware Quarterly Ransomware Report.
"Credit unions need to be looking out for ransomware techniques. These cyber attacks have no boundaries and are truly a global issue," reports Carlos Molina, Senior Risk Consultant at CUNA Mutual Group. "Ransomware has grown in frequency and severity significantly. The average ransom payments have climbed exponentially in the last few years."
Ransomware payments in 2019 were three times as large as 2018 payments and four times as many extortion demands  were paid in 2019 versus 2018, according to incidents reported to Beazley. In fact, ransomware claims increased 239% and the total cost of ransomware payments has increased by 228% from 2018 to 2019.2  
According to Derek Laczniak, Director of Cyber Liability at M3 Insurance, "Ransomware developers threatened to release stolen data in the past. However, now with the actual release of confidential information, credit unions need to treat these attacks more like data breaches. Business interruption from these events has become a regular occurrence leaving both reputational and financial impacts."
How does Ransomware work?
Ransomware is a malicious software that restricts access to an infected machine, usually by systematically encrypting files on the system's hard drive. Then the cyber-criminal demands payment of a ransom in exchange for the key or keys to decrypt the data. Ransomware can be devastating.
The most identified infection points used to deploy ransomware:
  • Phishing emails
  • Corrupt attachments
  • Weak or poorly secured remote desktop protocols (RDP)
  • Unpatched system vulnerabilities and untimely anti-virus updates
  • Extensive reuse of passwords
  • Lack of multi-factor authentication
Molina points out more criminal effort is being placed towards remaining undetected on a breached network. The time that exists between the first execution of malware and its discovery inside the network is commonly referred to as dwell time. "Increased dwell time provides threat actors with opportunities to escalate hijacked privileges while searching for data caches of sensitive information that can be exploited," said Molina. The average dwell time is 43 days for ransomware according to an Infocyte report.3
There has also been a significant increase in criminals who purchase ransomware kits on the dark web, launch attacks in the hope of getting some payment, and care little about the data restoration experience of their victims.
"Ransomware code on a reseller distribution network is a very lucrative business for cybercriminals. The availability of free, do-it-yourself ransomware-as-a-service (RaaS) kits, and cheap attack ingredients has pushed the barrier to entry extremely low and deep technical expertise is no longer really needed." according to M3's Laczniak. "It is also possible that the increase of RaaS usage is related to the economic impact of the pandemic driving more financially-stressed individuals towards a career in cybercrime."
"There's no foolproof way of preventing ransomware attacks from occurring; however, all too often ransomware can be avoided with the right IT security and risk management procedures," adds Molina. "Proactive prevention is the most effective for credit unions."
Key Prevention Tips
  • Keep all systems including hardware, mobile devices, operating systems, software, cloud locations, and content management systems (CMS), patched and up to date. If possible, a centralized patch management system should be used.
  • Activate two-factor / multi-factor authentication (2FA/MFA) on all systems - including managed service provider software platforms, administrator systems, and end-user systems wherever possible.
  • Backup data regularly and verify the integrity - ensure backups are not connected to the computer or networks that are being backed up (i.e. securing backups in the cloud or physically storing offline).
  • Apply the principles of least privilege and network segmentation in which an end user should be given only the privileges necessary to completes tasks related to their role in the credit union. If an employee does not need an access right, the employee should not have that access right.
  • Provide frequent social engineering and phishing training to employees so they are your first line-of-defense. Reminders to not to open suspicious emails, not click on links or open attachments contained in such emails, and to be cautious before visiting unknown websites should be made regularly.
  • Vet and monitor third parties that have remote access to the credit union network and connections to third parties. Ensure they are diligent with cybersecurity best practices.
  • Credit unions who may facilitate ransomware payments for commercial or consumer members should familiarize themselves with FinCEN's Advisory (October 1, 2020) and list of 10 financial red flag indicators to assist in detecting, preventing, and reporting suspicious transactions associated with ransomware attacks.
Security experts are reporting a potential increase in ransomware attacks for the foreseeable future. Molina emphasizes, "As ransomware tools and deployment methods advance, criminal groups will continue to launch more targeted attack campaigns resulting in increased paid ransom demands and more negative impact to credit unions' reputation and bottom-line."
Need More Info?
To learn more about ransomware, cyber risks, and insurance, go to the Protection Resource Center at cunamutual.com/prc for additional resources and RISK Alerts or contact a Risk Consultant at 800.637.2676 or riskconsultant@cunamutual.com.
Beazley cyber insurance policyholders can also access additional resources at www.beazleybreachsolutions.com (User ID / Password required). In addition, Beazley offers many loss mitigation services at a discount for credit unions.
 
1Coveware, "Ransomware Attacks Fracture Between Enterprise and Ransomware-as-a-Service in Q2 as Demands Increase", August 3, 2020, 2Beazley, "Beazley's 360° approach to ransomware protection" 2018 - 2019, 3Infocyte, "2019 Mid-Market Threat and Incident Response Report", Q2, 2019
 
CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Insurance products offered to financial institutions and their affiliates are underwritten by CUMIS Insurance Society, Inc. or CUMIS Specialty Insurance Company, members of the CUNA Mutual Group. Some coverages may not be available in all states. If a coverage is not available from one of our member companies, CUNA Mutual Insurance Agency, Inc., our insurance producer affiliate, may assist us in placing coverage with other insurance carriers in order to serve our customers' needs. CUMIS Specialty Insurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market. Cyber policies are underwritten by Beazley Insurance Group or other nonaffiliated admitted carriers. © CUNA Mutual Group, 2021. 
 

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  We Are Stronger Together: CUNA's Advocacy  
 
By John Cassidy, CUNA Mutual Group

 
As soon as the COVID-19 pandemic began, CUNA Mutual Group quickly took action to ensure we were there to support the credit union system, members and the greater communities we collectively serve.
We established Stronger Together to provide relevant information and resources for our partners, while making a number of meaningful product changes such as increasing on premise cash limits for credit unions while waiving fees and providing premium payment flexibility to ensure members could keep their coverage without interruption.
In addition to the product changes, we focused on five key areas to support our customers and communities through the pandemic.
  1. Advocating for Credit Unions: Our Corporate & Legislative Affairs team amplified credit union system advocacy efforts with members of Congress, adding our voice to help advance the credit union agenda, support efforts to increase funding for Community Development Financial Institutions (CDFI) and supported efforts to add a second round of funding for the Paycheck Protection Program (PPP) and credit union access as PPP lenders.
  2. System Collaboration: We committed an additional $1 million of our $3 million total contribution to CUNA's Open Your Eyes to a Credit Union awareness initiative, provided more than $200,000 in additional financial support of state foundations and National Credit Union Foundation and partnered with Inclusiv on the CDFI awareness and certification campaign for credit unions
  3. Delivering Relevant Expertise: We hosted a record 2,440 attendees at our annual virtual Discovery Conference, provided regular economic and market updates from our chief economist and chief market strategist, and offered access to our experts across multiple business lines to help credit unions adapt and prepare for the future.
  4. CUNA Mutual Group Foundation: In a year of adversity like no other-when the needs of our communities were greater than ever-our employees answered the call, contributing more than $200,000 toward COVID-19 relief in the Spring and more than $500,000 this Fall toward education, economic security and emergency aid. And, with a dollar-for-dollar match from our CUNA Mutual Group Foundation, our communities will receive more than $1M as they work to support those in need.
  5. Diversity, Equity & Inclusion: As we continue to advance our own DEI strategy, we helped launch the CU DEI Collective as a Founding member. We expanded our partnership with the African American Credit Union Coalition (AACUC) and the Network of Latino Credit Unions and Professionals (NLCUP) and shared our company's stance on social justice.
While most vendor relationships are primarily transactional, we consistently demonstrate that we are far are more than just a vendor. We help credit unions navigate through challenging times and thrive when times are good. We'll be there to make a difference in the lives of your current and future members, in partnership with all of you. We are Stronger Together.
Learn more at cunamutual.com/strongertogether.
John Cassidy is Senior Sales Market Manager, Credit Union System Relations for CUNA Mutual Group, the leading provider of insurance and financial services to credit unions and their members. Contact him at john.cassidy@cunamutual.com.
CUNA Mutual Group is the marketing name for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries and affiliates. Corporate headquarters are located in Madison, Wis. 
 

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  New Mexico Credit Unions Make Headlines  
 
Many New Mexico credit unions are making the news! 

Del Norte Credit Union announced its first launch of a new branch south of Santa Fe. The new branch will open this spring in the Rio Rancho location vacated by Century Bank at 3634 Rio Rancho Blvd. 

Los Alamos Schools, Del Norte, Zia Credit Union:
Three Los Alamos credit unions were featured by Chip Filson in his creditunions.com article about coming together to create a community park.
You can read that article here.  

Nusenda FCU employees did some big time fundraising to assist local businesses and those hurting from the pandemic, including essential workers.

In response to the food crisis many children are facing in NM, Sandia Area Federal Credit Union stepped up and will double the impact of gifts made to the FACE the Hunger Challenge. SAFCU and their partner, Storehouse New Mexico, seek to increase community awareness and to raise funds -- funds that helped to provide nearly 2 million meals last year.
 
Congratulations to all our credit unions in the news! If your credit unions is in the news, send us a link or clipping to share. We always are proud of the great accomplishments of all our New Mexico credit unions.
 

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  GAP Coverage Class Action Suits See Uptick  
 

A number of class action suits regarding GAP coverage (Guaranteed Auto Protection) have been filed across the country and in the west - including in Colorado and New Mexico. 

Consequently, New Mexico credit unions should review their policy and procedure as well as disclosures to ensure compliance with the law and honoring their member obligations.

CUNA Mutual Group, an issuer of GAP coverage for many credit unions is also addressing this issue. They will hold a free online conference on the subject, March 11 starting at 10:30 am MST. 

Credit Union officials are urged to register for the online conference.
 

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  Bank On Burque: Access to Safe and Affordable Accounts  
  The City of Albuquerque and the FDIC invite you to a virtual roundtable on March 9, 2021 from 10:00 am to 11:30 am MT.  
REGISTER NOW!
We will introduce financial institutions to Bank On Burque, a new coalition to help unbanked families have access to low-cost bank accounts.
 
•    Learn how many Burque households currently use banking and financial services 
 
•    Hear about the CFE Fund's National Account Standards 
 
•    Understand what steps financial institutions can take to offer a low-cost account 
 
•    Hear how financial institutions can partner with the City of Albuquerque and community-based organizations on a service delivery model that encourages economic inclusion for un-banked families. 
REGISTER NOW!
 

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  WCMS 2021 Session Set for July 7-29  
 
Western CUNA Management School is set to resume in 2021 after their 2020 session was forced to postpone last summer's session due to the COVID-19 pandemic. This year's WCMS will offer live sessions - virtually.  Instead of the customary two-week, in person sessions at Pomona College, classes will convene virtually two days a week from July 7 through July 29.

"The 61st session of WCMS will proceed this summer," Dr. Mike Steinberger
Dean and Chief Academic Officer, WCMS said. "Our commitment to providing MBA-level education, nurturing passion for the credit union mission and rich opportunities for student-to-student interaction remains central to the 2021 WCMS session." 

Live classes will be at 10:30AM -12:30PM PDT and 2:00PM - 4:00PM PDT on Wednesdays and Thursdays in July (7/8, 14/15, 21/22, 28/29). The live classes will be highly interactive and include a wide selection of student breakout groups to interact with the class material and peers. To prepare students for the live class days, students will be required to watch pre-recorded, on-demand faculty lectures where they introduce the concepts that will be explored further in the live sessions. 
 
The curriculum includes opportunities for students to network outside of their class interactions between classes each day.  The commitment to live classes, pre-recorded on-demand faculty lectures and required student team projects, along with interaction events, provides twenty hours a week during the four week session.
 
The program is designed identically to the in-person program and students will have the opportunity to earn honors through testing. Testing will be conducted online on Thursday July 29 from 2:00PM to 4:00PM PDT, followed by the Graduation Ceremony at 6:30PM PDT.
 
Due to the changes in the structure of the sessions, WCMS staff urges students to take note of the required in-person interactive class dates. Enrollees can go to the WCMS website to find answers and to submit any questions.
 

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  One-Size Strategies Don't Fit All Situations  
 

Customized overdraft approach offers tailor-made solutions
By: Mark Roe
, Executive Vice President of National Sales

The past year has highlighted the vital role community financial institutions play in helping businesses thrive and consumers maintain their financial well-being. It has also taught us a great deal about the industry's ability to overcome difficult obstacles in order to provide valuable services and advice to keep account holders and employees safe, maintain effective work environments and keep communities up and running. 

Throughout all of the uncertainty, credit unions have implemented solutions to address both their specific circumstances and their members' changing financial needs. The ability to recognize evolving conditions and make adjustments along the way reinforces our industry's resiliency and the people who make it work.

There's too much at stake for one-size-fits-all solutions
As we look ahead to 2021, credit unions will continue to face operational challenges, increased demands for technology and ongoing performance concerns due to the impact of the coronavirus. Likewise, many consumers will continue to experience uncertainties due to job loss or underemployment that threatens their financial security and increases their need for safe, reasonably priced products and services to address short-term liquidity needs. 

With so many unknowns ahead, not implementing tailored solutions to fit your institution's situation-or the needs of your members-can be costly in terms of operational efficiency, profitability, compliance certainty, and service quality. 

Find the perfect fit
For example, a customizable overdraft strategy can improve your overall results-based on your credit union's specific operational and performance goals-with the following resources and support: 
• Proven program management consulting maps out an effective plan to increase revenue potential, minimize charge-offs, maintain consistent member communication and achieve continuous program improvement.
• In-depth employee education-that addresses your staffing situation-reinforces consistent program understanding, strengthens employee confidence and improves service quality.
• Reliable compliance expertise-along with periodic updates and advice-reduces regulatory uncertainty and legal risk.
• Fully disclosed, consumer-friendly processes and procedures strengthen member loyalty.

Build trust with clear, consistent disclosure
At the same time, a fully disclosed solution-supported by effective messaging and transparent processes-empowers members to better manage their finances. Armed with more information, they are aware of the option to access overdraft coverage for necessary expenses and unexpected purchases when dealing with occasional economic challenges. Plus, the right messaging and communications recommendations provide support to program users in the following ways: 
• Initial program explanation introduces members to the benefits and responsibilities of using the program option. 
• Ongoing communication re-educates them regarding how the program works, explains the service's value, describes the difference between available vs. actual balance, and offers other useful information and account management tips.
• Disclosed overdraft limits-that are reviewed periodically for adjustment-fit individual members' situations and provide valuable peace of mind.
• Periodic account activity notifications address specific circumstances and reinforce your institution's commitment to better service. 

Tailor your solution with an eye on planned growth
Credit unions will continue to experience uncertainties that add stress to staff time and resources. Some of the most common issues include addressing sustainable revenue generation, increased competition, business activity restrictions, the pandemic's ongoing economic impact and changing member needs. 

Utilizing the recommendations and support provided by a professional overdraft consultant to implement and maintain customized program policies and procedures can reduce the burden on your staff. It is also an effective way to boost employee confidence, increase performance, strengthen compliance certainty, provide opportunities to create member loyalty, and significantly increase your growth potential. 

ABOUT JMFA
JMFA is one of the most trusted names in the industry. Whether it's recovering lost revenue, uncovering new savings with vendor contract negotiations, creating more value, serving members better or delivering a 100% compliant overdraft service-JMFA can help you deliver measurable results with proven solutions. To learn more, please contact your local representative or call us at (800) 809-2307.


 

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