NCUA's Hyland on Top Fraud Threats

Banking Regulator Discusses Institutions' Biggest Risks
Payment card fraud. ACH and wire transfers. ATM skimming. And especially insider crimes. These are among today's top information security threats to institutions, says banking regulator Gigi Hyland in an exclusive interview.In fact, an audit of credit union failures turned up a surprising statistic, says Hyland, board member of the National Credit Union Administration. "In terms of actual losses, we recently completed a review of 27 of the credit union failures between May of 2004 and April 2010, and in 13 of the 27 cases, fraud was the cause of the failure and the losses."

Often, that fraud was in the form of a rogue insider, she says. "Some scary stuff and some concerning stuff," Hyland says. "We continue to ask credit unions to do as much as they can to make sure they have appropriate internal controls to try to avert the risk of fraud as much as possible."

In addition to fraud, Hyland discusses:

  • The state of credit unions in 2011;
  • How Dodd-Frank and other regulatory reforms impact security and risk management;
  • How pending FFIEC guidance on authentication and online banking will help institutions improve security and fight fraud.

Hyland was sworn in as a Board member of the National Credit Union Administration (NCUA) on November 18, 2005 for a six-year term. Prior to joining the NCUA Board, her career spanned 14 years serving the credit union community as an attorney and advocate.

During her tenure, Hyland has spearheaded a number of key initiatives. She recently hosted and moderated a two-day Symposium to celebrate the 75th Anniversary of the Federal Credit Union Act. The Symposium provided a forum for robust and frank conversation about credit unions' unique business model and its future sustainability. In December 2008, Hyland launched a supplemental capital initiative to review and formulate the agency's policy position on this critical issue. In 2007, she served as Chair of NCUA's Outreach Task Force and helped author the Task Force's report. The Task Force was created to provide a better understanding of and evaluation of the NCUA's outreach efforts, credit union service documentation requirements, and executive compensation disclosure. That same year, she facilitated a summit to discuss payday lending alternatives and credit unions' involvement in the Volunteer Income Tax Assistance (VITA) program. An innovator and strategic thinker, Hyland initiated the use of webinar technology at NCUA and has fostered direct communication with examiners and regional offices at the agency to assure alignment of policy decisions and examination practice.

Hyland serves as NCUA's representative on the NeighborWorks America Board of Directors. She also serves as the Board's liaison to the World Council of Credit Unions (WOCCU), other international organizations and the Export/Import Bank. Hyland's term expires August 2, 2011.

From 2003-2005, she served as Senior Vice President, General Counsel for Empire Corporate Federal Credit Union in Albany, New York. While at Empire, she represented the corporate by serving as a board member of the National Cooperative Business Association. From 1997-2002, she served concurrently as Vice President, Corporate Credit Union Relations of the Credit Union National Association, Inc. and Executive Director for the Association of Corporate Credit Unions. Hyland is a Credit Union Development Educator and received the DE Volunteer of the Year Award for Advocacy in March 2006. She began her career as an attorney at the family firm of Hyland & Hyland.

A graduate of the College of William and Mary with a B.A. in comparative literature, Hyland also earned her J.D. from George Mason University School of Law and an Advanced Diploma in International Law from McGeorge School of Law.




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