RALEIGH, N.C. – In recognition of the growing menace of identity theft, cyberfraud, and both internal and external scams, the North Carolina Credit Union League is taking some unprecedented steps to tighten links with law enforcement and improve credit union coordination through formation of a Risk Management Council. The Council, believed to be the first of its kind among state Leagues and may be copied on a national scale, held its first meeting in January and installed as its chairman an ex-top cop in the Rochester N.Y. police department and now a top security executive at Coastal FCU here. He is Robert Goldfinger, director of risk management at Coastal and the retired former commander of criminal investigations in Rochester before joining the Raleigh CU. "The issue of fraud and how credit unions work together to share information and confront this challenge" remains the mission of the Council, explained Goldfinger. The problem in North Carolina and elsewhere, he said, has been "building for years" but centers on the lack of communication among CU security management – particularly within smaller institutions – in knowing where to turn to seek help, get direction or provide assistance to law enforcement. The types of fraud existing today "are enormous and there are so many vulnerabilities" it is hard for some credit union executives to know where to seek help first-from local police, FBI, sheriff's, U.S. Justice Department, state attorneys general etc., he said. The Council will attempt, he said, to help CUs "on all different kinds of fraud whether it be credit card, ID theft or, internal or external fraud." Goldfinger said he planned to discuss the North Carolina League Council as he moderated a nationwide Webcast panel April 7 dealing with ID theft, "and cyber crime fraud" sponsored by NAFCU as part of its audioconference series. Goldfinger was joined on the NAFCU Webcast by top law enforcement executives representing Justice, the U.S Postal Service and the FBI. Heading up the enforcement panel was James Candelmo, assistant U.S. Attorney for the Eastern District of North Carolina and head of the Federal Anti-Terrorism Task Force of N.C. who praised the League for its "forward looking action" in forming the Risk Council. "Credit unions, which have a long history of dealing directly with their members, don't often get noticed for what they do in navigating compliance and now they have done something long overdue in the financial community in building a relationship with law enforcement," explained Candelmo. Banks, said Candelmo, "get all the attention" in combating fraud but "here credit unions have taken the lead by pooling resources," a development which deserves commendation. The whole concept of a Risk Council "is simply gangbusters," he said. Large banks, he said, have a tendency to "neglect the individual customer" and they are now "paying the price" mentioning problems or concerns dealing with the USA Patriot Act. But CUs, he said, "know their customers." Whether a centralized Risk Council might be implemented by CUNA on a national scale was unclear, but CUNA Mutual in Madison, Wis. said there has been "some preliminary discussion" about a nationwide risk group. "However, there has been no plan created nor has there been a formal decision made to proceed," said a statement by James O'Dell, senior manager of CU Protection/Risk Management for CUNA Mutual. The statement added that "the players that might comprise" such a council have yet to be identified and thus it is "premature to announce that such a council was being formed" considering there are simply "too many unknowns." Meanwhile, the North Carolina League noted that Candelmo was a speaker at its first meeting Jan. 23. Just how often the Council will meet was not spelled out, but the League said the goal of the group is to "ensure that North Carolina credit unions have a timely communication mechanism with their peers regarding real or potential fraud." In addition to Goldfinger, other members of the Council include, Karen Daeke, vice president-security, State Employees CU; Michaell Bragg, vice president of branch operations, Sharonview FCU, Charlotte, N.C.; Frank Davis, security officer, Marine FCU, Jacksonville, Fla.; Jan Duggins, senior account analyst, Piedmont Aviation CU, Winston Salem, N.C.; and Jimmy Womack, vice president-operations Carolinas Telco FCU, Charlotte. l Davis of Marine FCU said the Council is already proving useful to his CU in tracking down telemarketing scams that have hit on the elderly in Jacksonville. "We were able to warn other credit unions to be on the lookout for individuals who are peddling a fraudulent medical discount membership packet," said Davis. Goldfinger said apart from "change of address" fraud to steal accounts related to ID theft, CUs in the state have also witnessed various forms of mortgage fraud known as "flipping properties" through inflating appraisals and overvaluing homes. "It's kind of a Ponzi scheme we've come across," he said. Kim Bohannon, the League's assistant vice president for regulatory and compliance and a staff liaison for the Council, noted that the ID Theft Data Clearinghouse last year received 5,537 complaints from North Carolina victims with credit card fraud the "number one type of identity theft." The top five cities for ID theft in the state were: Charlotte, Raleigh, Greensboro, Durham and Fayetteville and she noted, according to national statistics, North Carolina ranks 15th in the number of victims of identity theft per 100,000 population, -

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