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News Now

Washington
CUSO rule is focus of NCUA June agenda
ALEXANDRIA, Va. (6/15/12)--Proposed credit union service organization (CUSO) regulatory changes drew a substantial number of comments from credit unions when they were released last year, and a final version of the CUSO changes will be the lone item on the agenda when the National Credit Union Administration (NCUA) holds its open board meeting on June 21.

Under the proposal, CUSOs and their subsidiaries would be required to directly file their financial statements with the NCUA, and to forward those reports to state supervisors.

The NCUA currently has the authority to inspect the financials and records of some CUSOs, but the majority of financial information on CUSOs is provided by natural person credit unions that obtain services from the CUSOs.

The agency has noted that this is an inefficient system, and said enhancing the monitoring of CUSOs would protect consumers, credit unions and the National Credit Union Share Insurance Fund (NCUSIF).

The Credit Union National Association (CUNA) filed an extensive comment letter on the proposal, noting that while some CUSOs have had issues, CUSOs as a whole do not pose a systemic risk to the credit union system or overall concerns to the NCUSIF.

CUNA has asked the agency to substantially modify the CUSO proposal before making it final, and CUNA regulatory staff and President/CEO Bill Cheney have met many times with the NCUA to discuss this issue.

CUNA has stressed that the CUSO proposal would introduce unnecessary limitations on credit union activities and add to the already large regulatory burdens faced by credit unions.

Overall, CUNA has urged a more targeted approach than that outlined in the CUSO proposal.

NCUA Chairman Debbie Matz in recent Listening Sessions, as her regional conversations with credit unions are called, said the agency has examined ways that the CUSO proposal could be scaled back.

The closed portion of the Thursday NCUA meeting will feature discussion of personnel issues and supervisory activities.

For the full NCUA agenda, use the resource link.
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