| (a) Definitions. The following words and terms, when
used in this chapter, shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Card Activation - process of sending new plastic
cards from the issuer to the legitimate cardholder in an "inactive"
mode and making the card usable. Upon receiving the card, the legitimate
cardholder must call or log on to the issuer/processor's website and
go through a member verification process before the card is "activated".
(2) Card Security Code - a set of unique numbers encoded
on the magnetic strip of plastic cards used to combat counterfeit
fraud.
(3) Neural Network - a computer program that monitors
usage patterns of an account and typical fraud patterns. The program
analyzes activity to determine fraud risk scores to detect potentially
fraudulent activity.
(4) Plastic Cards - includes credit cards, debit cards,
automated teller machine (ATM) or specific network cards; and predetermined
stored value and smart cards with micro-processor chips.
(b) Credit cards. A credit union may issue credit cards
in accordance with the credit union's written policies, which shall
include at a minimum:
(1) Credit policies to set individual limits for credit
card accounts:
(2) A process for reviewing each member's payment and/or
credit history periodically for the purpose of determining risk; and
(3) The credit underwriting standards for each type
of card program offered.
(c) Program Review.
(1) A credit union shall review, on at least an annual
basis, its plastic card program with particular emphasis on:
(A) The amount of losses caused by theft and fraud;
(B) The loss prevention measures (and their adequacy)
currently employed by the credit union;
(C) The availability and possible implementation of
other loss prevention measures such as card activation, card security
codes, neural networks, and other evolving technology; and
(D) A cost benefit analysis of supplemental insurance
coverage for theft and fraud related losses.
(2) The review shall be documented in writing, with
any approved changes to the plastic card program being entered into
the minutes of the board meeting.
|
| Source Note: The provisions of this §91.712 adopted to be effective August 9, 1999, 24 TexReg 6023; amended to be effective August 10, 2003, 28 TexReg 6268; amended to be effective November 9, 2006, 31 TexReg 9020; amended to be effective November 5, 2018, 43 TexReg 7343 |
