Texas Administrative Code
Title 7 - BANKING AND SECURITIES
Part 6 - CREDIT UNION DEPARTMENT
Chapter 91 - CHARTERING, OPERATIONS, MERGERS, LIQUIDATIONS
Subchapter G - LENDING POWERS
Section 91.712 - Plastic Cards
Universal Citation: 7 TX Admin Code ยง 91.712
Current through Reg. 49, No. 38; September 20, 2024
(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.
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