MADISON, Wis. — CUNA Mutual Group, the insurer of the vast majority of CU plastic card programs and the target of some criticism for often raising the premium and deductible on that insurance, is emphasizing the message that such programs are worth having despite the costs.
Two speakers at the insurers' recent Discovery Conference, Lisa Brandt from CUNA Mutual and Kent Ailes from the $1.7 billion Arizona Federal Credit Union, sought to reassure CU executives that cards should remain part of their CU's portfolio of products and services and that the losses need to be kept in perspective.
“Many card issuers are fretting over the rapid rise in fraud losses, yet missing the bigger picture. Despite the dramatic increases, these losses are sustainable and not extraordinary compared to the rest of the card-issuing industry,” Brandt told Discovery conference attendees.
Treat a plastic card program and the associated risks in a similar way to those of any other product offering, she said. “Understand where plastic cards fit into your credit union's financial plan and its mission to serve the membership. By using basis points as a key metric rather than fraud dollar amounts, you can more fully understand the success of your card program.”
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